Television
REGULATORY FRAMEWORK FOR TELEVISION ACTIVITIES
On May 3, 2004, the new law governing the Italian television broadcasting system, known as "Regulatory principles regarding the layout of the radio-television system and RAI" the contents of which have been widely reported in the media, entered into effect.
Pursuant to law No. 43 of February 24, 2004, converting legislative decree No. 352 of December 24, 2003 containing "Urgent provisions concerning procedures and deadlines for the definite termination of the transitory regime introduced under law No. 249 of July 31, 1997", the Communications Regulator completed, before the mandatory deadline of April 30, 2004, its examination of the state of dissemination of digital terrestrial technology and the state of evolution of program offerings broadcast using DTT technology. Overall, the Communications Regulator found that the conditions required under law (actual coverage of 50% of the population, availability of decoders at affordable prices on the market, offerings of programs broadcast using DTT technology, other than the programs broadcast over analogue networks), were met.
With regards to the digital trial phase, on June 15, 2004, MTV Italia and La7 Televisioni (formerly TV Internazionale) obtained an extension of the authorization to participate in the experimentation, issued on February 25, 2003, for their plant using analogue technology on the basis of the application submitted to the Ministry of Communications on March 24, 2004.
In order to enhance its digital network whose coverage is significantly above 50% of the population, La7 Televisioni S.p.A. is also looking into the possibility of entering into agreements with producers of television content and for the supply of broadcasting capacity.
The AGCOM resolution No. 253/04/CONS, bearing the "Provision guaranteeing access of the suppliers of especially valuable content to the networks for terrestrial digital television", has also clarified that for the purposes of complying with the requirement of company separation, the license of network operator can be requested for subsidiaries, associates or parent companies, pursuant to Art. 2359 of the Italian Civil Code, reiterating the principle according to which parties applying for a license as network operator are obliged to implement the corporate separation between network operator and content supplier at the time of submitting the application.
On September 1, 2004, La7 Televisioni S.p.A. conferred the business segment focusing on technical television broadcasting services on its subsidiary, Telecom Italia Media Broadcasting S.r.l., so as to comply with the corporate separation required under law.
As part of its experimentation in the area of digital terrestrial broadcasting, on January 22, 2005, La7 Televisioni S.p.A. began providing pay-per-view services. Specifically, in the areas covered by La7's digital terrestrial signal, the service allows individual events to be watched by inserting a smart card in a digital terrestrial receiver. The smart card is associated with a credit that can be used to view the events the customer chooses from among those included into the La7 Cartapiù offer.
With resolution 136/05/CONS “Measures for protecting pluralism pursuant to Law 112 of March 3, 2004”, the Italian communications authority (AGCOM) verified that the television market and related sources of financing were characterized by a duopolistic structure made up of RAI S.p.A. and RTI S.p.A. and its subsidiary Publitalia '80 S.p.A. In light of these conclusions, AGCOM deemed it necessary to introduce a number of measures aimed at protecting other companies operating in the same market as those, including La7 and MTV (digitalization of analog networks by March 2006, reserving 40% of broadcasting capacity for independent content providers until implementation of the plan for the allocation of digital frequencies is complete, specific obligations regarding advertising on digital channels and advertising brokers).
All the activities required for the corporate separation imposed under law for setting up the network operator, are currently under preparation.