The European Commission has pronounced funding granted by Germany
in relation to digital terrestrial TV to constitute illegal state aid.
In its decision, the Commission has taken the opportunity to issue
directions for member states on acceptable ways to offer financial
support to a switchover to digital broadcasting.

In the case, subsidies in the region of euro four million were held
to be distorting competition, and must now be paid back by its

The guidelines offered in the decision aim to provide legal
certainty for member states about how they can support development in a
competition law compliant manner. Whilst the watchdog supports a
changeover to digital broadcasting and regards state intervention, in
certain circumstances, as unavoidable to achieve this, it is still the
responsibility of member states to show that the schemes they propose
are necessary and proportionate. Proposed funding measures need to
focus on specific cases of market failure and require to be based on
objective criteria.

Proposals to which the Commission will tend to approve include the following:

  • Financial support for the roll-out of a transmission network in
    regions where, without it, there would be insufficient TV coverage;
  • Subsidies to public service broadcasters as compensation for
    broadcasting through all transmission platforms to reach the whole
    population, provided this is included in the public service mandate;
  • Discounts to consumers buying digital decoders, provided that they
    are technically neutral, in particular if they support the use of open
    standards for interactivity; and
  • Reimbursement to broadcasters who are forced to terminate analogue
    transmission ahead of the licences running out, provided this takes
    account of granted digital transmission capacity.

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