EU waves remote at Liberty Global's Dutch telly takeover

Liberty Global must sell its Dutch premium pay-TV movie channel Film1 if it wants to take over cable telly operator Ziggo, Brussels' antitrust chief has warned.

Since the planned buyout will bring together the first and second largest cable television networks in The Netherlands, the European Union’s competition commissioner Joaquín Almunia has placed certain conditions on the deal going ahead.

The two companies operate in different geographic areas in The Netherlands, so cable TV customers won't be affected.

But the planned deal would have merged the only two linear premium pay-TV film channels in The Netherlands, Film1 and HBO Nederland, hence the order to John Malone-run Liberty Global to sell Film1 to a third party.

The second, more complex, problem the commission found with the takeover was that the joined cable network would have covered around 90 per cent of the country and between 60 per cent and 70 per cent of Dutch pay-TV subscriptions.

With over the top (OTT) service providers relying on this network while simultaneously competing with paid TV, Liberty Global has been required to make yet more concessions with the EU to secure the deal.

Liberty Global currently has contracts in place that restrict TV broadcasters' ability to offer OTT services, by making its terms of carriage of TV channels over its network conditional. In order for the merger to go ahead, Liberty Global has agreed to get rid of these clauses and not to reintroduce them for at least eight years.

The cable giant also promised to maintain adequate interconnection capacity through at least three uncongested routes into its internet network in The Netherlands, at least one of which with a large transit provider.

The merger has been in the pipeline since March, but these competition concerns led to an in-depth probe of the deal being opened in May. ®