UPDATE 1-Mediaset, RAI to be barred from Italy frequency auction-EU source

Wed Nov 7, 2012 10:18am EST

By Massimiliano Di Giorgio

ROME Nov 7 (Reuters) - Italy's biggest commercial broadcaster Mediaset and state-owned RAI will be barred from taking part in an upcoming auction for Italian television frequencies, a European Commission source said on Wednesday.

"A few weeks ago Italian authorities notified us a proposal on auction rules ... participation is limited to operators who have less than five multiplex. Therefore Mediaset and RAI are excluded," the source told Reuters.

Mediaset, owned by former prime minister Silvio Berlusconi, and RAI each own five so-called multiplex, group of channels transmitted on digital bandwidth.

All other TV players in Italy own less than five multiplex. The auction is estimated to fetch 1.1-1.2 billion euros.

The source, who spoke on condition of anonymity, said the Commission was in contact with Italy's communications regulator about the auction rules and that Brussels' was expected to give its verdict by end-November.

Industry Minister Corrado Passera said in October that the auction would be held by December.

Earlier this year, Mario Monti's government scrapped plans by predecessor Berlusconi to assign the frequencies through a beauty contest, which critics said would have favoured Mediaset and RAI.

Besides Mediaset and RAI, Telecom Italia Media, Sky Italia, Hutchison Whampoa's local telecoms operator 3, Europa Way, Prima Tv and Canale Italia had all lined up for the beauty contest before it was cancelled.

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