Italy Scraps Plans to Give Away TV Frequencies in Controversial 'Beauty Contest'

2:06 PM PST 12/19/2011 by Eric J. Lyman
Jacob Raule/Getty Images

Amid speculation that an auction might be set up next year, former prime minister Silvio Berlusconi says, "This subject just leaves me cold."

ROME – Italy said Monday it will scrap previous plans to give away digital television frequencies and said it uncertain whether it will even award the frequencies to broadcasters.

The plan to give away the frequencies based on a process referred to in the Italian press as a “beauty contest” was put in place by billionaire media tycoon Silvio Berlusconi, who was Italy’s prime minister until he stepped down amid scandal on Nov. 12. The “beauty contest” format awards the frequencies based on how a specific broadcaster plans to use the frequencies.

Already, News Corp subsidiary Sky-Italia said it would not participate in the process because it unfairly favored incumbent operators like state broadcaster RAI and Berlusconi’s Mediaset.

Corrado Passera, Italy’s new minister of industry, said that giving away the frequencies was unacceptable at a time when the government is raising taxes and slashing spending in order to reduce fears that the country could fall victim to Europe’s debt crisis.

“It is not tolerate that while we ask for sacrifices from Italians that we would assign the frequencies for free,” Passera said, according to the Italian press, which estimated that selling the frequencies could add as much as €5 billion ($6.5 billion) to state coffers.

But Berlusconi said last week he would not be interested in participating in an auction of the frequency if it comes to that.

“This subject just leaves me cold,” Berlusconi said Thursday, amid speculation that an auction might be set up next year. “I am completely uninterested. With the incredible number of frequencies today there will be little competition to take them. It will be difficult to imagine anyone making a serious offer.”

Passera, meanwhile, stopped short of saying the frequencies would be auctioned to television broadcasters, hinting that they might raise more money and be better used by cellular telephone companies, which could add capacity to their data transfer networks with the same frequencies. He said a decision on the fate of the frequencies would be made in the coming weeks.

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