Telefónica Faces DTS Acquisition Probe

The Spanish regulator CNMC has filed disciplinary proceedings against Telefónica for a possible breach of commitments in the acquisition of DTS in April 2015.

In a statement, it says that this is the result of surveillance work it carried out into the takeover of DTS (the former Sogecable) when the telco bought a 56% stake owned by the Prisa group. It adds that on April 22, 2015 it authorised the deal conditional on Telefónica fulfilling a series of commitments related to the pay-TV market. These included the wholesale commercialisation of an annual offer of contentconsisting of premium channels; the replicability of the products with these channels; and the non-discriminatory access of its internet customers to pay-TV content by OTT operators.

In the case of pay channels, Telefónica was required to have a wholesale offer so that its competitors can access their pay channels with premium content (premiere films, national and international sports competitions, etc.) and market them through their own pay-TV platforms. To calculate the payment of the competitors for access to the football and motor channels of the wholesale offer, Telefónica takes into account the so-called guaranteed minimum cost (CMG).

CNMC says that Telefónica wrongly calculated the distribution of the fixed costs of the Movistar Partidazo channel of its wholesale offer of pay-TV channels in the 2016/2017 season.

Although Telefónica acknowledged its error later in September 2018, the contracting operators of this channel had to bear higher costs than those that corresponded to them.

CNMC concludes that initiating the proceedings, which will take a maximum of three months, does not prejudge the final result of its investigation.―Broadband TV News