Spain faces court action on pay-TV

Date: 04/09/1997

By Peter Chapman

THE European Commission is poised to launch legal action against Spain if it does not officially overturn a law on digital television decoders which officials claim is contrary to EU internal market rules.

Internal Market Commissioner Mario Monti wants quick action from Madrid's development ministry to fulfil an informal promise made last week to modify the law which imposes technical standards for digital TV decoders.

That pledge followed a July ultimatum from the Commission to change the law or face a legal challenge in the European Court of Justice.

Canal Satellite Digital, led by France's Canal Plus, argued that the Spanish law imposed standards which made the 'simulcrypt' scrambling system used in its set-top boxes for pay-television illegal. It claimed the law unfairly favoured the system used by rival Via Digital venture led by telecoms operator Telefónica and state broadcaster RTVE.

Commission officials will meet their Spanish counterparts “shortly” to discuss the latters' promise to change the law and avert the threat of legal action, a spokeswoman for Monti said this week.

“They answered on 29 August - but not with a legal statement. They announced that they are going to change it, but we are waiting for them to do this,” she said. “The timing is now quite urgent. We need to have contact with the Spanish to know what their commitment is and how long we still have to wait.”

If the case does reach the courts, the Commission is likely to ask for immediate interim measures to prevent Spanish law from taking effect ahead of a final judgement which could take up to two years.

But an official warned that until the dispute was resolved, chaos would reign in the fledgling digital TV market in Spain. “There is a lot of uncertainty in the market because of this. It's holding up major chain stores selling decoders. The government has indicated to them that there might be sanctions if they stock illegal decoders.”