The European Commission has decided that German plans to finance part of the fees commercial broadcasters pay for the transmission of their channels on the DTT network in the German Land of North Rhine-Westphalia are not compatible with EC state aid rules. The Commission fully supports the transition from analogue to digital broadcasting. However, the proposed measures fail to identify properly the problem that requires state aid, and to choose appropriate and non-discriminatory means of funding.
Competition Commissioner Neelie Kroes commented: “The transition to digital broadcasting has many advantages for consumers and innovation. However, State support must target specific issues where the market does not provide solutions and must not be discriminatory, in particular between terrestrial, cable and satellite transmission.”
In the German Land of North Rhine-Westphalia, DTT was launched in May 2004. The Land’s media authority intended to grant commercial broadcasters present on the DVB-T platform subsidies to finance part of the transmission fees paid to the operator of the DVB-T network. The total amount of subsidy envisaged was €6.8 million over five years. The German authorities notified the subsidies to the Commission in January 2005.
The investigation led the Commission to conclude that the subsidies envisaged in North Rhine-Westphalia were not in line with EC Treaty state aid rules. The planned funding is not an appropriate means to address specific problems in relation to digitalisation and is not necessary to realise the switchover. The German authorities did not demonstrate that the financing would be apt to trigger a change in the commercial broadcasters’ behaviour: the “incentive effect”. Furthermore, the planned state support disregards the principle of technology neutrality and only supports transmission over the digital terrestrial platform. Thereby distorting competition between terrestrial, cable and satellite transmission.
In July 2006, the Commission also opened an investigation into a similar measure in the Land of Bavaria. According to the Commission aid amounts below €200,000 to one undertaking over three years are not considered as state aid.
