Prodi gov't eyes merged TV infrastructure

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ROME -- The latest television sector reform plan touted by the Italian government would merge the infrastructure used by Italy's three national broadcasters into a single company, with the goal of increasing competition in the sector dominated by state-run RAI and Silvio Berlusconi's Mediaset.

The plan was made public Wednesday by Mario Barbi, a senior political advisor to Italian Prime Minister Romano Prodi, who gave the general outline of the plan in parliament.

A source close to Prodi's office said that the plan could gain traction because it would be an inexpensive way to remove a barrier to entry for would-be broadcasters that don't have the infrastructure to broadcast their signal nationally.

"One change like this one would solve several problems at once," the source said.

The plan would turn RAI, Mediaset and Telecom Italia Media's La 7 network into pure content producers that would distribute their programming across the frequencies operated by the new combined infrastructure entity.

New content producers would be able to gain access to the market by contracting with the combined infrastructure company.

The source said that a study by a group of investment banks estimates that the new company would have annual revenue in the range of €400 million ($544 million) and profits of about €150 million ($204 million).

Barbi told that parliament's joint culture and transportation committee that the "radical separation of ownership between the network operator and the content producer" was a way to avoid abuses of any one broadcaster's dominant position.

The latest plan comes as parliament and European regulators are already considering the so-called Gentiloni reform that would cap any broadcaster's share of the overall advertising market at 45% -- a plan also billed as a way to limit abuse of dominant position.

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