Sky Italia says the current Italian scheme to allocate new digital frequencies is flawed and biased in favour of the two major network incumbents, public broadcaster RAI and Silvio Berlusconi’s Mediaset.

Sky Italia has now faced Italy’s new Prime Minister Mario Monti with having to make a decision whether to change the rules – and in doing so risk alienating the political support of Berlusconi’s parliamentary muscle.

Sky Italia, in a statement, said the current system was simply a ‘beauty contest’, which was established by Berlusconi and favoured his Mediaset operation. “Sky has therefore decided to withdraw its application, hoping that this difficult decision will encourage new discussions between all operators and the new government, and a deep review of rules aimed at redefining the Italian television market in terms of competition,” said Sky’s statement.

Sky Italia is not alone in grumbling. RAI, and others, have also complained that the process is skewed.

Five digital frequencies are up for grabs, and could raise up to €1.5 billion in fresh revenues were they to be auctioned off. Italy’s opposition parties are calling for an auction to be held.

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