On March 15 2002 the Ministry of Cultural and Religious Affairs lodged a consultation document asking for comments on a proposed set of terms and conditions for a digital terrestrial transmission network in Norway by April 12 2002. Several comments were received. The network in question is primarily intended for broadcasting purposes. However, it is also proposed that it make spare capacity available for other telecommunications purposes. The consultation will be followed by an invitation to tender for, initially, one licence to establish and operate a digital terrestrial transmission network.

The letter asking interested parties to give their comments was brief, and below the standard expected from a consultation of this complexity and importance. It should therefore be read in conjunction with the previous White Paper - St meld 46 (1998-99) - which sums up the factual background and the governement's intentions for the roll-out of a digital terrestrial transmission network in Norway. Important aspects of this include ensuring the future positions of the Norwegian public broadcasters and securing nationwide coverage of digital transmissions. Another important source of information is a report made for the Ministry of Transport and Communication by the Norwegian Post and Telecommunications Authority and the Mass Media Authority.

One particular point that is not addressed by the ministry is that the network will be included in the forthcoming regulatory amendments to the European Union/European Economic Area information society regulations. This must be taken into account by those wishing to apply for the licence, since it will presumably significantly change the rights and obligations which are currently regulated in the non-convergent regulations.

The consultation process followed a long discussion about establishing a digital terrestrial network for broadcasting purposes in Norway. Several of the comments received point out that there is no need or desire for such a transmission network alongside other transmission platforms, such as cable and satellite distribution. Others - among them the public broadcasters in Norway, NRK and TV2 - claim the opposite. NRK and TV2 have already established a joint venture, Norges Televisjon AS, for the purpose of applying for the licence.

The consultation document proposes that all the capacity presently available shall be awarded to just one licence holder. One-third of the transmission capacity shall be offered nationwide. It will be compulsory to transmit programmes made by the public broadcasters and to reserve transmission capacity for local broadcasters.

According to the ministry's proposal it will be permissible to offer spare capacity for telecommunications purposes other than broadcasting distribution.

It is made clear that no state subsidies will be given. Although this should go without saying it has raised much concern, particularly from parties that expect to compete with the digital terrestrial network. With reference to other countries where a digital terrestrial network has been established (eg, Sweden) and to circumstances such as NRK being financed through licence fees, the question arises as to what safeguards will be put in place to prevent state subsidies from being awarded, and what will happen if the transmission network runs into financial trouble?

The question of state subsidies has also been raised as regards the ministry's suggestions not to charge licence fees, and the fact that the tender will be a 'beauty contest' rather than an auction: other radio-based transmission networks have had to either pay licence fees or be subject to auctions. From the Norwegian Competition Authority's perspective this discrimination is regarded as potentially anti-competitive. Another concern, shared by the Post and Telecommunications Authority, is that beauty contests are not the most efficient way to use scarce state resources.

Finally it is proposed by the ministry that in order to ensure that transmitted programmes fall within Norwegian jurisdiction, all licence applicants must be established legal entities in Norway. This point is also highly controversial. Not only does it put the terrestrial digital network in a less favourable competitive position than other technological platforms, but it could also be in breach of Norway's obligations under the European Economic Area Treaty. The seriousness of this argument is underlined by the fact that it has been pointed out by both the Competition Authority and the Post and Telecommunications Authority.

For further information on this topic please contact Arve Føyen or Tor Stokke at Simonsen Føyen Advokatfirma DA by telephone (+47 21 95 55 00) or by fax (+47 21 95 55 01) or by email ([email protected] or [email protected]).