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IRIS 2007-2:6/6

European Commission

Swedish Operator Teracom Received no State Aid

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Katerina Maniadaki

Institute for Information Law (IViR), University of Amsterdam

The European Commission has found that the Swedish state-owned terrestrial network operator Teracom did not receive illegal subsidies under the EC state aid provisions in connection with the development of the digital terrestrial television platform in Sweden. The complaints filed with the Commission alleged in the first place, that Teracom received excessive transmission fee payments from the public service broadcaster SVT in return for transmission services. However, the Commission concluded that the fee payments at issue did not exceed market rates and therefore did not amount to an undue advantage for Teracom. In the second place, the Commission found that a state credit guarantee contested by the complainants was not issued and no unconditional and legally binding promise had been made to Teracom to that effect. Lastly, the third complaint referring to a capital injection to Teracom was dismissed on the grounds that the Commission could not establish that the injection was not made on conditions that would have been acceptable to a private investor operating under normal market conditions.

However, the Commission decided in October 2006 to refer Sweden to the European Court of Justice for failing to change its national rules granting Boxer TV-Access AB (a company jointly owned by Teracom and 3i) a monopoly to provide access control services - i.e. services involving the encryption and decryption of TV signals, the provision of decoder, set-top boxes, smart cards and other devices-in Sweden’s digital terrestrial broadcasting network. According to the Commission, such failure runs counter to Sweden’s obligation to ensure that any company is entitled to operate networks for radio and TV broadcasting and to provide transmission and broadcasting services as provided for by the Directive 2002/77/EC on competition in the markets for electronic communication networks and services.

“Commission decides Swedish digital terrestrial platform operator Teracom received no aid”, press release of 21 December 2006, IP/06/1869 EN