Search the website

Merger of DMT and Elettronica Industriale. Antitrust applies measures to ensure competition in the market for television infrastructures


PRESS RELEASE


PRESS RELEASE

Merger of DMT and Elettronica Industriale. Antitrust applies measures to ensure competition in the market for television infrastructures

Equal, transparent and non-discriminatory access to be guaranteed for all petitioners, as requested by operators in the sector. DMT subject to restrictions on investing - current prices may not be raised and access must be provided to all applicants under the same conditions applied to the parent company. Compliance with the compulsory restrictions to be monitored closely by the Authority. Failure to enact the measures will trigger the non-compliance procedure provided for by law, which foresees fines in the range of 1% to 10% of total sales.

In a meeting on 14th December 2011, the Antitrust Authority authorized Elettronica Industriale's (Mediaset group) acquisition of control over DMT, but conditioned the transaction with strong measures designed to sterilize any anti-competitive consequences. Digital Multimedia Technologies is the largest independent Italian operator in the infrastructure sector for television, radio and telecommunications networks, while Elettronica Industriale works with the construction, maintenance and management of the networks used to broadcast most of Mediaset Group's televised services. The transaction, therefore, could generate exclusionary effects in the market for televised broadcasting services via digital terrestrial networks and the market for televised advertising. For this reason, the College made a unanimous ruling to condition the merger with strong restrictions designed to ensure access to the infrastructures for new firms on the basis of equal, transparent and non-discriminatory conditions, as requested by the sector operators heard during the course of the inquiry that began last October. This element plus the governance obligations being imposed on the new firm will suffice to safeguard the functionality of competitive dynamics in downstream markets.

The conditional authorization measure took account of the opinion of the Autorità per le Comunicazioni, which was informed of the decision scheme on November 05th. The College decided to monitor compliance with the measures very closely: the first report is due within six months. Failure to implement the measures will trigger non-compliance procedures as provided by law, entailing fines of no less than 1% and no more than 10% of total sales.

The following measures are being imposed:

1) DMT and its subsidiaries and other associates must offer equal, transparent and non-discriminatory conditions to any national television operators who request access to its digital terrestrial networks. More specifically, DMT shall permit co-possession and sharing of the infrastructures that television broadcasters require to reach final users via digital terrestrial networks.

2) DMT must provide access to the infrastructures even when additional investments would be required to upgrade and/or enlarge the stations. Under these circumstances, the new entity shall make the necessary investments from its own commercial perspective as an independent tower company.

3) DMT must offer equal, transparent and non-discriminatory conditions in its offer of broadcasting system management services, including the installation of broadcasting systems and preventive and corrective maintenance, and use appropriate penalties to guarantee dedicated service levels. Network operators may otherwise perform broadcasting system management services directly or via third parties expressly designated by them. When granting access to clients and their service providers for this purpose, DMT must utilize procedures and methods that guarantee uninterrupted third-party service and protect all infrastructural equipment and installations.

4) DMT shall publish a list that indicates the access point locations and base prices for hosting services and basic secondary services, as well as contract conditions and the general terms and technical rules for the service provision in question. For hosting and secondary services, the price list must be based on

equitable, cost-oriented economic conditions, which must in any case be no worse than those that DMT currently applies to its own clients under equivalent circumstances.

5) For any third-party subject who requests access to and related services on the broadcasting infrastructures for purposes of installing and managing a national broadcasting network using the digital terrestrial network, DMT shall prepare an offer based on publicly listed prices that is disaggregated in terms of the economic and technical conditions for the services in question.

6) DMT shall handle third-party requests and the provision of infrastructure access and usage services by applying the same conditions and procedures it applies, under equivalent conditions, to the firms it is directly associated with or controlled by. When providing information to third parties, DMT shall use the same procedures it applies to the firms it is directly associated with or controlled by.

7) EI and/or DMT shall commit to providing and maintaining record-keeping systems to track, during the entire duration of the commitments, all of the access requests received from different television operators, the outcomes of these requests and any related explanations. This documentation must be preserved for two years following the date on which the access request is formalized.

8) Should tower company and network operator activities ever be performed by a single firm at some point in the future, EI and DMT commit to preparing and maintaining separate accounting records for the tower company's activities in order to facilitate continued verification of internal/external equity of treatment.

9) The executive board of the new entity may not appoint any members who have ties to the firms that control DMT or that are subject to joint supervision, nor may it appoint any executives who work as contractors or employees of the aforementioned firms or who have any other ownership or professional interest that would compromise their independence.

10) When published, EI and/or DMT must provide the Authority with the information required by the Consob Rules that regulate transactions with related parties. This measure is another tool that the Authority uses to make it easier to confirm that the same non-discriminatory conditions for infrastructure access that are applied inside the group are applied to third-party firms as well.

11) The transferee of the aforementioned infrastructures must continue to be listed in a regulated market. This ensures the contendibility of corporate control of the infrastructural property itself.

12) Within six months, EI and/or DMT shall provide the Authority with a detailed report on the commercial, economic and technical methods being used to implement these commitments.

13) Any disputes that arise concerning the economic terms and conditions of the new entity's offer may be submitted to the conciliation service of the Camera Arbitrale of Milan.

Rome, 14th December 2011