Brussels puts the DTT aid policy in Spain in check

The Commission considers that Spain's support for private broadcasters violates European Union rules.

The European Commission has concluded that the Spanish compensation scheme for private terrestrial broadcasters for simulcasting during terrestrial television signal digitalisation infringes EU state aid rules. Since no aid has been granted yet, recovery will not be required.

Margrethe Vestager, Commissioner responsible for competition policy, has pointed out that "this measure constitutes a selective advantage for broadcasters and operators of terrestrial platforms with respect to other available technologies. The aid goes against the principle of technological neutrality and is neither necessary nor proportionate. Spain has already completed the switch to digital frequency without state aid having been granted. Therefore, recovery will not be required."

The transition from analogue to digital broadcasting freed up radio frequency spectrum previously used for television broadcasting (the so-called digital dividend). In this context, Spain imposed an obligation on broadcasters to simultaneously transmit analogue and digital signals during the transitional period, in order to avoid disruptions to the service for viewers.

In 2011, the Spanish authorities notified their intention to compensate the additional costs incurred by television broadcasters to comply with this simulcasting obligation. In April 2012, the Commission launched an in-depth investigation procedure into state aid. In the course of the investigation, the Kingdom of Spain withdrew the part of the notification relating to public broadcasters, as they had already been compensated for their role as providers of a public service. The investigation continued to focus exclusively on private broadcasters. Today's decision only affects the latter.

EU state aid rules allow Member States to support the reallocation of radio spectrum and mitigate its impact on operators. In particular, Member States can offer compensation for costs that operators would not be able to bear themselves, in the case of a proven market failure, if migration were not necessary. To avoid undue distortion of competition, such measures must be necessary to achieve the assigned objective. The aid granted must be proportionate to the objectives and the measure must be technologically neutral, that is, the subsidy must be open to all operators.

DTT versus satellite, cable or IPTV

The Commission's investigation confirmed that Spain's support for the transition from analogue to digital television was only offered to digital terrestrial television (DTT) broadcasters to the detriment of other platforms, such as satellite, cable or television through the Internet Protocol (IPTV). Spain did not adequately justify the reasons why the application of the principle of technological neutrality would not be justified in this case. Any exception to this principle should be duly justified on the basis, for example, of a prior independent study, with corresponding market consultation, demonstrating the effectiveness of the DTT platform compared to alternative platforms.

Spain was also unable to demonstrate that public aid for the reallocation of frequencies was necessary to guarantee the correct transition from analogue to digital broadcasting. On the contrary, the Commission found that private broadcasting companies would have guaranteed simultaneous broadcasting in any case, in order not to lose viewers. Furthermore, Spain did not provide any evidence, such as an independent cost study, to demonstrate that the aid was proportionate.

The Commission therefore concluded that the measure selectively favored broadcasters and operators of terrestrial platforms to the detriment of broadcasters and operators of alternative platforms and therefore distorted competition in the single market. Since no aid has been granted yet, recovery will not be required.

Spain has now completed the change of frequency and private broadcasters have guaranteed and financed the simulcast on their own initiative without any state aid being needed or allocated.

Background

To respond to the significant growth in demand for wireless broadband services in the European Union, the Commission proposed legislation in February 2016 aimed at strengthening these services with high-quality radio frequencies. The proposal provides for better coordination of spectrum management at European level and calls on all Member States to reallocate the 700 MHz spectral band, currently used for television broadcasting, to wireless broadband by June 2020. This would improve wireless Internet access for all Europeans, help develop cross-border applications and facilitate the deployment of 5G.

Several Member States have established state aid measures in the framework of digital conversion. In particular, socially disadvantaged households were given help to purchase the new decoders. In cases where the principles of technological neutrality, necessity and proportionality were respected, the Commission was able to approve such measures.

In 2011, Spain notified the State Aid Control Commission of two measures relating to digital conversion. The first of them is the subject of today's decision. The second contemplated subsidies to residents of communities of owners to allow them to adapt the existing digital terrestrial television infrastructure or to move to another platform. The Commission concluded that the measure complies with state aid rules as it ensures continuity of television coverage for households and allows them to use the platform of their choice.

La versión no confidencial de la decisión se publicará con el número de asunto SA32619 en el Registro de Ayudas Estatales del sitio web de la DG Competencia una vez se hayan resuelto las cuestiones de confidencialidad.La lista de las nuevas decisiones sobre ayudas estatales publicadas en Internet y en el Diario Oficial figura en el boletín semanal en línea State Aid Weekly e-News.