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November 10, 1994


By CBR Staff Writer

The European Commission yesterday excavated a bonecrushing pot-hole in the German Infobahn when it refused to grant approval for that Media Service GmbH pay-television and interactive television services joint venture between state-owned Deutsche Bundespost Telekom – which also operates most of the cable television networks in Germany, media conglomerate Bertelsmann AG and the Bavarian media mogul Leo Kirch, saying that the proposed venture, as structured, would harm competition. The landmark ruling casts grave doubt on the proposed Sprint Corp alliance with Telekom and France Telecom being approved by Brussels while the two state phone companies retain a monopoly on telecommunications infrastructure. The Commission said the companies had come up with changes to their proposal at a late stage but these were considered insufficient to allay competition fears since they were either conditional or declarations of intent and not structural undertakings. The Commission said it is committed to seeing future multimedia markets open to competition, and that the venture, which was to provide decoders and to manage subscriptions and accounts, would create a dominant position in the the pay-TV market for administrative and technical services and in the German-speaking world, and would also strengthen the dominant position of Telekom in the market for cable infrastructure. Telekom howled that the decision would delay Germany’s introduction of new television technology, and suggested that the services it planned to offer would not now be available to pay-television newcomers – a strange assertion given that German company Siemens AG has this week joined forces with Sun Microsystems Inc and Scientific-Atlanta Inc to offer a one-stop shop for just such cable equipment and services (CI No 2,539).

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