The Cartel Office has put an end to the broadcasting chain's efforts to broadcast its programs in encrypted form via satellite and thus be able to charge viewers fees. The TV group must therefore abandon its encryption plans for digital satellite television. The decision also has repercussions in Switzerland. The Cartel Office had considered the similar plans of RTL and ProSiebenSat.1 to be a prohibited cartel agreement and threatened to issue a warning. As RTL had already concluded a contract with the satellite SES Astra, ProSiebenSat.1 wanted to wait for the decision of the cartel watchdog. The broadcasting group has now suspended its project so that the proceedings against RTL and ProSiebenSat.1 can be discontinued. Should the business model be resumed, the proceedings will be continued. An RTL spokesperson said that there was no clear decision and therefore no planning security because the proceedings had been terminated for formal and not substantive reasons. However, a ProSiebenSat.1 spokesperson said that not all encryption plans had been shelved as a result. In any case, it is an unfortunate decision for the TV chain, which is currently in sales negotiations.
Bypassing competition The main point of criticism from the Cartel Office was that both broadcasting groups "would have tapped into an additional source of revenue relatively risk-free, bypassing competition". To this end, the satellite operator was to charge a monthly fee, "from which a significant proportion of the revenue would have accrued to the two broadcasting groups". The public broadcasters ARD and ZDF want to prevent their programs from being encrypted for satellite reception. The private broadcasters, on the other hand, want to use encryption to ensure that the use of transmission rights is geographically limited.
Consequences for Switzerland? In Switzerland, cable network operators justify their controversial basic encryption with the argument that they would no longer be able to show encrypted television channels without basic encryption. They argue with the international trend that cable network operators must assure broadcasters that they will only make available to customers those programs for which they have paid. The case of RTL and ProSiebenSat.1 was seen as a milestone on the way to pay-TV.
As a result of the decision by the Cartel Office, the main argument seems to have been dropped and a ban on basic encryption, as demanded by consumer protection, for example, is no longer unrealistic. As Patrik Durcey, Deputy Director of the Swiss Competition Commission (ComCo), told SDA, compelling reasons are needed to justify the encryption of basic programming when switching from analogue to digital television. A procedure for basic encryption is pending with the Competition Commission, but is currently suspended. However, the Competition Commission does not want to rush ahead and wait to see whether the issue of basic encryption will also be resolved with the ongoing revision of the Radio and Television Act (RTVA). The corresponding ordinance is on the Federal Council's agenda for January 2007.