EC nixes German DTV subsidies

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BRUSSELS -- The European Commission on Wednesday blocked plans by German state authorities to subsidize digital television broadcasts, saying they discriminated against satellite and cable.

The regional government in the state of North Rhine-Westphalia had planned to spend €6.8 million ($9.7 million) over five years to finance part of the broadcast fees commercial operators paid to provide digital terrestrial services, or DVB-T.

EU Competition Commissioner Neelie Kroes said that though she wanted to encourage the transition to digital TV, this particular aid was unfair.

"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," she said.

The move comes after persistent clashes between the commission -- the EU's antitrust enforcer -- and German authorities over aid to broadcasters.

In April, the German government was forced to scrap its aid for public broadcasters ARD and ZDF after the commission threatened court action and fines. And two years ago, the EC ordered state authorities in Berlin-Brandenburg to reclaim €4 million in aid for similar DVB-T services after it also was ruled illegal.

The state media authority for Nord Rhine-Westphalia said Wednesday that the EC decision threatens the German roll-out of DVB-T.

"Without this financial support, commercial broadcasters will have no chance of competing with tax-funded public broadcasters (in DVB-T)," said Norbert Schneider, director of NRW's media authority.

A media authority spokesman called the ruling "contradictory" because the European Commission approved the much higher state subsidies used to support Germany's cable infrastructure.

Scott Roxborough in Berlin contributed to this report.
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