The Spanish government approved in June 2019 a package of €150 million in state-aid to facilitate digital terrestrial television (DTT) migration for the second time in the country. The money will go to local communities to finance the retuning of TV antennas as DTT broadcasters will relinquish frequencies in the 694-790 MHz UHF band for 5G services. Spaniards must retune their antennas, as all DTT channels must move to frequencies below 694 MHz by June 2020. The spectrum between 694 and 790 MHz, the so-called 700 MHz, will be auctioned to mobile broadband operators, by the end of 2020 to facilitate the launch of 5G services in Spain.
Meanwhile, the Italian Ministry of Economic Development has issued a list of guidelines for the provision of subsidies to buy TV sets and DTT set-top boxes compatible with the DVB-T2 HEVC standard. The pay-out of €151 million in subsidies commence in November 2019. The guidelines propose that Italian residents on social benefits receive a refund or rebate of €50 per household, for the purchase of a single device by December 31st, 2022 or until the allocated resources are exhausted. The aid will be granted on the principle of technological neutrality. The Italian government has committed to ceasing all DVB-T DTT transmissions and switching to DVB-T2 by June 2022.
The European Commission has decided that the state-aid schemes of Spain and Italy are in line with EU state-aid rules and subsequently granted its approval.
For many governments, subsidies are a very practical and effective tool to support policy initiatives and planning at a state or regional level. Subsidies have been widely used to support policies dealing with the adoption of new technologies, learning of new skills or implementing new practices. One such government policy greatly assisted by state subsides is the transition from analogue to DTT broadcasting. Subsides have facilitated the adoption of DTT equipment and accelerated the uptake of DTT services among TV viewers. The transition to DTT is a very demanding project which must be completed by a set time-frame and decided by the governments. In some European countries where the bulk of TV infrastructure is based on cable networks, such as Benelux, Germany and the Nordics - DTT migration is relatively straightforward and does not require many resources. By contrast, in countries where the dominant TV platform is terrestrial, like in Spain and Italy, the whole migration process is lengthy and laborious, especially if subsidies are not on offer.
State subsidies fall into two broad categories:
EU legislation aside, governments are still under an obligation to justify the allocation of state subsidies given they are largely tax-payer’s funded. However, governments have an added incentive to migrate broadcasts from analogue to digital: an increase in revenues from the funds raised at spectrum auctions. Many governments claim no tax-payer’s funds were used for subsidizing their switchover to DTT as the money came from auctioning the UHF spectrum that was released from shutting off their analogue terrestrial TV transmissions. These spectrum auctions brought in significant revenues across Europe notably its Big-5 countries: Spain - €1.3 billion, France - €2.59 billion, UK - €2.7 billion, Italy - €2.96 billion and Germany - €3.57 billion, according to IHS Markit.
Spain and Italy have given subsidies to boost the DTT adoption in their respective countries. However, the two countries have been found guilty of violating the relevant EU state aid legislation.
The new set of subsidies that the Spanish and the Italian governments have introduced are in accordance with EU legislation and it’s expected they will greatly assist the transition to DVB-T2 technology.