April 16, 2012 / 8:26 PM / in 7 years

Italy to auction digital TV frequencies

ROME, April 16 (Reuters) - Italian Prime Minister Mario Monti’s government said on Monday an auction of digital television frequencies will be called within 120 days, reversing a plan by the previous administration to give them away.

After a three-hour Cabinet meeting, the government said the auction would be created by amending a decree already being discussed by parliament.

“The government wants to gain economically from the precious resource of the frequencies while aiming to consolidate the TV industry and develop the telecommunications sector,” the government said in a statement.

Monti announced earlier this year that he would abandon a so-called “beauty contest” to assign the frequencies free of charge, which had been former premier and media owner Silvio Berlusconi’s plan.

The previous process for assigning frequencies drew heavy criticism for favouring big established broadcasters, including the former prime minister’s own Mediaset group.

It was also attacked for overlooking potential revenue for Italy’s cash-strapped state treasury after an auction of fourth-generation mobile telephone frequencies last year raised almost 4 billion euros. One estimate puts revenue from the frequency auction at more than 1 billion euros.

Some of the frequency rights will be auctioned for a shorter period than others and could be assigned to telecoms operators rather than TV networks, the statement said.

It will be up to the communications authority to set the parameters of the auction with an eye to “guaranteeing competition,” the government said.

Separately, the government passed a bill that will streamline some aspects of the tax process and reinforces rules put in place to fight tax evasion.

In the government statement, there was no mention of a fund to collect extra revenue from the fight against tax evasion to be used to cut taxes in the future.

Industry Minister Corrado Passera said on Sunday that the government planned to create such a fund without saying how the extra revenue would be used. (Reporting By Steve Scherer; editing by Andre Grenon)

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