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The Danish Competition Authority approves the creation of Broadcast Service Danmark a full-function joint venture

07. July 2008

Journalnr. 4/0107-0201-0010/MES//JEM

On 7 July 2008 the Danish Competition Authority DCA by authorization from the Danish Competition Council approved the creation of Broadcast Service Danmark A/S (BSD) a full-function joint venture between the two national public broadcasters Danish Broadcasting Corporation (DR) and TV 2/Danmark A/S (TV 2).

BSD has been functioning as a joint venture without full-functionality between DR and TV 2 since 2001, when DR and TV 2 bought the highest Danish telemasts (most of them at 150 – 300 meters) for terrestrial distribution of radio and TV signals. BSD provides all the necessary terrestrial transmission services; leasing of space for antennas and equipment, construction, maintenance, operating and technical support services.

Until now BSD has about only been servicing DR and TV 2, but the political decision to digitalize the terrestrial distribution in Denmark will change the terrestrial distribution dramatically with distribution of at least 30 commercial TV-channels. The Swedish company Boxer TV (Boxer) has been chosen as gatekeeper with the responsibility to build and manage the new network. For this Boxer will need access to the telemasts. On account of BSD’s experience and knowledge of aerial networks and the telemasts BSD is foreseen to play an important role in the project. Through this BSD will expand it’s business activities with third parties to a degree that it attains full-functionality. This means that the operation must be approved by the DCA since the turnover of BSD, DR and TV 2 meet the thresholds contained in the Danish Competition Act.

The joint venture raised some competition concerns because of the characteristics of the relevant market (each telemast being an essential facility) and that BSD has a dominant position. To eliminate these concerns DR, TV 2 and BSD offered a set of commitments which imply;

  • specific principles for submission of accounts in order to ensure equal and non discriminative treatment of DR, TV 2 and third parties regarding BSD’s prices and conditions
  • right for third parties to use antennas and equipment on the telemasts and in buildings connected to the telemasts on equal and non discriminative conditions - whether or not BSD is used for maintenance, operating and technical support services in relation to third parties own equipment
  • right for third parties to install their own antennas and equipment on the telemasts and in buildings connected to the telemasts unless there is objective reasons not to accept it, which includes freedom to choose a company for maintenance, operating and technical support services on the same conditions that apply to BSD
  • change of control clause which entitles third parties to denounce the contracts with BSD within a year due to changes of control of BSD – but at the same time entitles third parties to continue existing contracts in spite of changed ownership of BSD.

The DCA concluded that these commitments ensure that the joint venture will not significantly impede effective competition, in particular due to the creation or strengthening of a dominant position.

For further information please contact head of division Hans Kierkegaard (72 26 81 13) or chief special advisor Vibeke Ulf Dumrath (72 26 80 87).