On May 13th 2002, the Competition Authority authorized the acquisition of STREAM by CANAL /TELEPIÙ, on the basis of certain conditions aimed at easing entry by new competitors in the pay-Tv market, the development of alternative means of transmission, as well as guaranteeing the protection of consumers.

The merger will bring about the disappearance from the market of STREAM, TELEPIÙ’s only current competitor.

This circumstance brought the Competition Authority to the realization that in order to authorize the merger, considering the specificities of the sector and the situation of the pay-Tv market in Italy, it was necessary to counter the market power of the dominant operator by adopting specific measures, the majority of which had already been proposed by TELEPIÙ.

These measures, in relation to which TELEPIÙ’s full compliance is necessary in order to obtain the authorization, can be summarized as follows:

a) with regards to football, CANAL+ and TELEPIÙ will not be able to stipulate contracts with a duration greater than two years for the pay television rights for satellite transmissions for the First and Second Division Championships, the Champions League, the UEFA Cup and the National Cup. Furthermore, TELEPIÙ and CANAL+ will have to insert a clause that grants the parties the possibility to rescind from their contracts on an annual basis. This condition should represent a guarantee for teams’ ability to plan, in particular the smaller ones, which are less protected from the newly created operator.

b) with regards to the current STREAM and TELEPIÙ contracts for football DTH Tv rights relating to the First and Second Division Championship games, TELEPIÙ must grant the teams, starting with the 2003/04 season and for the following seasons, the unilateral right to rescind form their contracts, without levying fines or penalties of any kind;

c) still with regards to the football contracts, TELEPIÙ must give up, for the current contracts, and not acquire for the future contracts, all exclusive rights, holdbacks, negative exclusivity rights or similar forms of protection relating to the utilization of such rights on all transmission platforms other than DTH, including, but not limited to, cable, digital terrestrial television (DTT), UMTS and Internet;

d) with regards to Tv rights for movies, TELEPIÙ must grant all of the majors, with which it currently has exclusive pay-Tv output deals, the unilateral right to rescind from their contracts, with a 6 months advance notice, with a proportional reduction of the payments, without however levying fines or penalties of any kind;

e) with regards to the all current contracts with the major movie production houses, TELEPIÙ, with a communication to be sent within 60 days from the decision adopted by the Competition Authority, must unilaterally give up:

-        the exclusive pay Tv output rights currently held on transmission platforms other than DTH;

-        the exclusive Tv pay per view, video on demand e/o near video on demand rights, as well as all holdbacks, negative exclusivity rights or similar forms of protection relating to the utilization of such rights by third parties on all transmission platforms;

f) in relation to the future contracts with the major movie production houses, TELEPIÙ will not be able to stipulate Pay Tv output deals on any transmission platform with a duration greater than one year and will not be able to acquire exclusive rights, holdbacks, negative exclusivity rights or similar forms of protection relating to the utilization of such rights on all transmission platforms other than DTH;

g) with regards to other transmission platforms, TELEPIÙ will not be able to operate (or request the relative authorizations) in digital terrestrial transmissions, either in the experimental phase or as a network operator; to this end TELEPIÙ must proceed to the sale of PRIMA TV and EUROPA TV, at market conditions, within a predetermined time period. If within this period TELEPIÙ has not stipulated a binding contract for the sale of PRIMA TV and EUROPA TV, a fiduciary will be given an irrevocable mandate to sell the above mentioned undertakings;

h) TELEPIÙ will have to grant to other operators the possibility of distributing its premium program packages on platforms other than DTH, as well as allowing third parties to access its own satellite platform on the basis of cost oriented, transparent and non discriminatory conditions.

i) with regards to the tutelage of subscribers, TELEPIÙ will have to ensure subscribers with an adequate protection in the fruition of its television services. TELEPIÙ has proposed to grant a particular care in handling STREAM’s current subscribers, guaranteeing a non discriminatory transition without additional costs. The tutelage of subscribers and the access to the satellite platform will be the subject of specific care and vigilance by the Italian Communications Authority, on the basis of its competences.

j) all of the measures indicated above are valid until December 31st, 2010, except for condition g).

Rome, 13 May  2002