ANACOM determines by draft decision to revoke license of PT for paid DTT

On 16 December, ICP-ANACOM - Autoridade Nacional de Comunicações was presented with a request from PT Comunicações to repeal the acts allocating the rights of use of frequencies associated with Multiplexers B to F. Having given consideration to this request, and guided by the criteria that the public interest must remain safeguarded, the regulator decided on the draft decision to repeal said acts.

In adopting this draft decision, ANACOM took various circumstances into account:

- The main reason for proceeding with the introduction of DTT - by means of the Free To Air operation supported by Mux A, which rights of use of frequencies are not covered by this decision - is to conclude the analogue-digital transition of television programme services of free, unrestricted access and to proceed with the switch-off of analogue terrestrial television broadcasting by 26 April 2012, with the minimum possible socio-economic impact;

- The provision of frequencies for the operation of Pay TV, supported on Muxes B to F, which rights of use PTC wishes to return, was intended to promote competition, particularly in the subscription television market, providing the end user with a wider offer of networks and services;

- The model adopted, which separated the FTA and paid operations, allowed the switch-off of analogue terrestrial to be less dependent on the success of a paid operation, enabling the market itself to set out which offers would complement or be integrated with each other. It was, moreover, possible to make the allocation of rights of use of all frequencies to a single entity, and also possible for tenderers to submit, with respect to the tender on FTA operation, a variant scenario which reflected the synergies arising from the development of a joint operation, as occurred;

- There have been significant developments in the market for subscription television which, being indicative of increased competition, reduce the competitive importance of the terrestrial platform. Between the time when the format of the tender was defined (early 2008), the date for submission of applications and the current request of PTC, the pay TV market has evolved and now incorporates a wider range of offers, particularly in lower value segments.

In this same period Portugal Telecom has developed its own Pay TV service on different platforms (FTTH, DTH and xDSL), contributing to this situation.

Between early 2008 and last September, the market for subscription television grew by more than 22%.

- The repeal of the act of granting the rights of use of frequencies that are associated with Muxes B to F, at the request of the PTC, does not jeopardise the objective of public interest at its origin, which was to increase competition in networks and services and contribute to the promotion of DTT, facilitating migration;

- For reasons beyond the control of the public entities involved in the introduction of DTT, none of the major factors driving the analogue-digital transition have materialized: the existence of a 5th channel on Mux A; high definition broadcasting of the current open signal channels in non-simultaneous mode, and the synergies that could exist at an operational level and in terms of promoting the service if the FTA operation and paid operation were deployed at the same time, a situation prevented as a result of the legal proceedings brought by Airplus. This lack of incentive for migration jeopardises an appropriate process and the intended success, in the light of the public interest at stake;

- The increasing proximity of the date stipulated for the switch-off provides good reason for setting out, as rapidly as possible, new ways of encouraging the voluntary migration deemed critical to the success of the analogue-digital transition;

- The repeal requested by PTC makes it possible for part of the 790-862 MHz frequency sub-band to be released, paving the way for its possible use in Portugal for other electronic communications services, in line with the rest of Europe;

- The cancellation of the operation of Pay TV, as a result of the repeal requested by PTC does not affect the terms and conditions of the right of use of frequencies associated with Mux A, in particular with respect to its link to the variant scenario presented by PTC in the winning proposal, whereby the price of providing the service to television operators set out in this proposal is maintained;

- With the public interest safeguarded, even where compliance with the obligations linked to Muxes B to F is not required, the guarantee bond, the objective of which was to enforce compliance, loses its purpose and may be released, especially given that there was no occurrence of non-compliance.

The draft decision of the regulator, which will be under public consultation for 20 working days, further provides that the repeal does not involve forfeiture of the guarantee bond and shall be retroactive in effect from the date of the adoption of the pre-decision.

The position of the ERC was heard and taken into consideration in the present process.