Italy halts free TV frequency licenses

Rome-- Italy, in a move that reps a blow for Mediaset, the TV empire of former premier Silvio Berlusconi, has frozen plans to license new digital TV frequencies for free.The recently installed Italo government, headed by technocrat Mario Monti, on Friday decided to suspend "for 90 days" a so-called "beauty contest" tender to award new DTT frequencies, which had previously decided by the Berlusconi government.That tender, under which frequencies were assigned for free, but only to broadcasters committed to massive investments, had come under attack by critics claiming it favored incumbents, including Mediaset.Mediaset, which is Italy's top commercial broadcaster, in a statament blasted the decision, defending the "beauty contest" as "absolutely legitimate" and vowed to take action to keep the old rules. But Industry minister Corrado Passera indicated Friday that the government, under pressure to raise cash, is now likely to scrap it. "The beauty contest was chosen in an economical and social context different from the current one," he said. "At a time when the government is asking sacrifices from its citizens - and since TV frequencies are a scarce and precious resource - we are taking some time to find solutions that are more coherent with the growth, equity and austerity plan of this government." In September, Italy's previous government said 10 companies, including Rupert Murdoch's Sky Italia, had applied for one frequency band in the contest. But Sky Italia pulled out last month, citing a convoluted process that favored existing players. Italo merchant bank Mediobanca has estimated that if the government decides to auction the DTT licenses it could raise up to $2 billion. Contact Nick Vivarelli at nvivarelli@gmail.com