Italy: Digital Terrestrial Broadcasting Regulation Impedes Market Access

Last Updated: 9 February 2006
Article by Francesco Portolano

The Digital Terrestrial Broadcasting Regulation (435/01/CONS), issued by the Italian Communications Authority, distinguishes between broadcasters, content providers and service providers. The regulation sets out the requirements with which each class of television operator must comply in order to obtain the relevant approval (authorization or licence) from the Ministry of Communications.

However, the requirements for becoming a digital terrestrial television content provider set forth by the regulation may create a potential obstacle to market access.

'Broadcaster' and 'Content Provider'

A broadcaster has

"the right to install, operate and provide an electronic communications network and facilities for the broadcasting, multiplexing, distribution and diffusion of the frequency resources allowing the broadcasting of diffusion blocks to users."

A content provider, on the other hand, has "editorial responsibility for the arrangement of the programmes scheduled for television...broadcasting".

While in the analogue television system operators are integrated vertically and carry out a large range of activities (eg, management of the broadcasting network, creation of content and sale of advertising space), the Digital Terrestrial Broadcasting Regulation requires operators to specialize and concentrate on either the management of the broadcasting network or the creation of content.

This separation is not new to the television sector: satellite broadcasters are similarly divided into 'carriers' and 'editors' of the various channels (this division first occurred in practice and was subsequently reflected in legislation).

The introduction of such separation in the digital terrestrial system should therefore not come as a surprise, since this system will progressively come to resemble the existing satellite system from a structural and systematic point of view. In particular, the key features shared by digital terrestrial television and satellite should include, in the medium term:

  • a large number of channels;

  • sophisticated systems for the consultation of programme schedules (eg, electronic programme guides);

  • the availability of free and encrypted channels;

  • the possibility to subscribe to different carriers; and

  • interactivity (on a larger scale in digital terrestrial television than satellite).

The comparison between satellite television and digital television may help to clarify why the Digital Terrestrial Broadcasting Regulation requirements for content providers can be viewed, at least in part, as in conflict with their role and function.

Requirements for Content Providers

The specific requirements which may present a potential barrier to the development of digital terrestrial television are (i) that the applicant be incorporated as a company or cooperative with fully paid-up corporate capital of at least €6.2 million, and (ii)that the applicant have at least 20 employees.

Minimum corporate capital requirement
The reasoning behind the minimum corporate capital requirement is unclear.

First, it may be assumed that some of the obvious candidates to become digital terrestrial television content providers are operators that currently provide content for satellite platforms. Research suggests that only a small number of these content providers have a corporate capital of at least €6.2 million. Notwithstanding this, however, satellite content does not appear to be limited, poor or undifferentiated; rather, even in the limited Italian satellite market the channels on offer exhibit the opposite characteristics, such as quality and variety.

Other future potential content providers are those currently classed as 'independent producers'. Again, very few of these have corporate capital of at least €6.2 million. There is thus a risk that the majority of independent producers will be excluded from acting as digital content providers. Arguably, this is not merely impractical, but is also in breach of the protection granted to independent producers by the European Union (eg, certain programme quotas reserved for independent producers). In addition, it is clear that many independent producers, even those with 'limited' corporate capital, can contribute to the diversification of programme content, create quality products, be economically profitable and so on.

Therefore, such a high corporate capital requirement may have a detrimental effect on the possible future content providers' market.

In addition, the requirement does not seem justified from an economic point of view. This is illustrated by the different characteristics of broadcasters and content providers.

A broadcaster, which is responsible for the realization, management, maintenance and development of a network infrastructure, must make substantial and continuous capital investments and support high fixed costs. In this case it seems reasonable to require a corporate capital that indicates adequate financial stability (assuming that corporate capital is in fact an indicator of an operator's stability and reliability).

A content provider, on the other hand, will normally operate with lower fixed costs and greater flexibility. For example, the primary investment would be in television studios, recording equipment and so on; whereas most of the costs will be variable (eg, actors' fees). Given also that content providers may choose to provide schedules for less than 24 hours a day, it is evident that the necessary capital resources do not justify such a high corporate capital.

Moreover, the assumption that corporate capital is a good indicator of an operator's stability is not necessarily correct. From an economic and accounting point of view, the factors for determining economic viability are rather more complex (eg, net equity and income perspectives). It is only from a purely legal (and formal) perspective that the corporate capital represents a guarantee for creditors. Even this limited function of the corporate capital is becoming less relevant, due to the development of legislation and case law in recent years.

Finally, the corporate capital requirement appears inappropriate in light of the fact that an identical requirement applies in the analogue television sector to entities seeking a government licence for analogue broadcasting, a much more capital-intensive activity.

Personnel requirement
It is also likely that content providers will find it difficult to meet the 20-employee requirement.

The nature of the relationship between content providers and their personnel may often legitimately consist principally of professional collaborations, consulting agreements and one-show engagements. For example, a content provider may engage an actor to play in a set number of episodes of a fiction series.

Further, in recent years Italian law has elaborated and even provided incentives for alternative models of work and professional collaboration, with a substantial reduction in the preference for employment relationships in the strict sense. Therefore, a requirement establishing the exclusive necessity of 'employees' may conflict with these legal developments.


It thus appears that the requirements which the Digital Terrestrial Broadcasting Regulation sets forth in relation to corporate capital and number of employees are inadequate and not proportionate to the scope of the regulation itself. Their rigidity may limit the possible number of entrants to the digital television market.

The possibly unjustified severity of these requirements may represent a barrier to market access for content providers. This may result in a scarcity of content providers, which may cause a dearth of content across the numerous digital channels. The legislation should arguably facilitate a large market of potential content providers, to ensure the plurality and diversity of programmes.

Alternative Proposal

It is arguably possible to establish alternative requirements for content providers which reflect the present state of technological convergence and legislative development, while at the same time according with the purpose of the regulation - that is, to ensure the stability and reliability of content providers.

It may be reasonable to require a corporate capital equal to a percentage of the total investment forecasted in the company's business plan. This criterion is not new to the communications sector: it has already been successfully adopted for some types of telecommunications operators. This would calibrate the corporate capital requirement to the different plans of interested companies intending to become content providers.

Meanwhile, the 20-employee requirement could be modified to include in the head-count all personnel, rather than just employees in the strict sense, including consultants hired on a continuous basis and the like.


The objectives of the Digital Terrestrial Broadcasting Regulation may be achieved by formulating the same requirements in a slightly different way. This would remove some arguably unnecessary barriers to market access for prospective content providers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.