EC: Bulgaria Has 2 Mos to Escape Court over DTT Mux Deals

Business | March 23, 2012, Friday // 06:45|  views

Bulgaria has awarded the licenses for its multiplexes to only two companies - Latvia's Hannu Pro (four) and Slovakia's Towercom (two).File photo by Trud daily

The European Commission has issued a final warning to Bulgaria over the controversial tenders for the operation of what will be the country's DTT multiplexes.

The EU executive body told Bulgaria on Thursday that it will face the EU highest court unless it informs it of the measures taken to address the breach of EU Law within two months.

It demanded that the country ensures open and non-discriminatory access to digital terrestrial broadcasting infrastructure market.

Bulgaria has awarded the licenses for its multiplexes to only two companies - Latvia's Hannu Pro (four) and Slovakia's Towercom (two).

The Commission considers that Bulgaria did not comply with the requirements of the Competition Directive when it assigned in 2009 the five spectrum lots available for digital terrestrial broadcasting via two contest procedures, limiting without justification the number of undertakings that could enter the market concerned.

According to Brussels the selection criteria of the contest procedures were disproportionate and therefore not in line with the requirements of the Competition, Authorisation and Framework Directives.

Applicants were not allowed to have links with content providers (TV channels operators), including operators active only outside Bulgaria, or with broadcasting network operators, the EU executive body said.

Bulgaria now has two months to inform the Commission of the measures taken to address the breach of EU Law and allow effective entry into the Bulgarian digital terrestrial broadcasting infrastructure.

If the national authorities do not reply satisfactorily within two months, the Commission said it may refer the matter to the Court of Justice.

Bulgaria's transport ministry declined comment, saying they still have not been informed officially of the European Commission decision.


Second Warning

The European Commission decision takes the form of a reasoned opinion, the second step in infringement proceedings under Article 258 of the TFEU.

Brussels launched the infringement procedure in May 2011 following conflicting requirements for the eligible bidders in the mux contests, which drove away Austria's Oesterreichischer Rundfunksender GmbH & Co KG (ORS).

The requirements in fact made possible a near monopoly on the mux market as all companies which were granted licences are linked in one way or another to Tsvetan Vassilev, majority owner of Bulgaria's Corporate Commercial Bank.

At first it was not clear who stands behind the foreign investors Towercom and Hannu Pro, but soon the names of Tsvetan Vassilev, head of Bulgaria's Corporate Commercial Bank and Irena Krasteva, a media mogul, believed to be funded by the bank and ethnic Turkish leader Ahmed Dogan, popped up in all deals.

Should the case go to the Luxembourg court and the judges rule against Bulgaria, the country will be forced to pay hefty fines, worth up to EUR 200.000 per day.


New Tender


In a bid to prevent legal action by the European Commission, Bulgaria decided at the end of December to hold a tender for yet another multiplex, its seventh.

The government has boasted that the new amendments will allow companies such as Austria's ORS, which have TV channels outside Bulgaria, to participate in the new DTT contest.

On Thursday the Commission welcomed Bulgaria's recent announcement of the launch of a tender procedure for the assignment of this spectrum.

The Commission expects Bulgaria to publish the conditions of the tender as soon as possible, so that potential new entrants can prepare their applications, be selected and enter the market before the date set for the analogue switch off, 1 September 2013.

The Commission says it will monitor that the tender conditions are in line with the Directives and allow effective entry into the digital terrestrial broadcasting infrastructure market.

Local experts however say that the new procedure is a mere attempt to throw dust in the eyes of Brussels officials.

The seventh multiplex will be just a collection of frequencies and its holder - in a much more disadvantaged position than Hannu Pro and Towercom, which have already grabbed the lion's share of the market, according to them.

Bulgaria's communications watchdog is obliged to prepare the package of documents for the new tender on September 1, 2013 under legal amendments that parliament hurriedly adopted in the last days of 2011.

This is also the deadline for the analogue switch-off in the country.

Until then the government is expected to splurge BGN 150 M on freeing frequencies currently held by the military.

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Tags: Bulgaria, Slovakia, Latvia, Austria, European Union Court of Justice, NURTS, Alexander Tsvetkov, Transport Minister, analogue switch-off, Technicolor, Thomson Broadcast, BNR, BNT, Irena Krasteva, BTC, Bulgarian Telecommunications Company, Vivacom, Mancelord Limited, Gintars Kavacis, Towercom, Hannu Pro, Communications Regulation Commission (CRC), Bromak, Communications Regulation Commission, European Commission, Corporate Commercial Bank, Oesterreichischer Rundfunksender, Competition Protection Commission, DTT, multiplexes, Brussels, Oesterreichischer Rundfunksender, ORS


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