Telekom, Vebacom Join In Digital Pact

The broad outlines of the ownership structure for Europe’s digital TV decoder alliance began to take shape Dec. 12 when Deutsche Telekom announced that it and Vebacom would jointly hold a 51% majority stake in the venture called Multimedia Betriebsgesellschaft (MMBG) that is poised to set the European standard for set-top boxes.

The move comes days after Germany’s Kirch Group dropped its plans to bring its own digital decoder onto the market and said it would join the rival MMBG alliance led by Telekom, Vebacom, Bertelsmann and France’s Canal Plus.

Telekom said that the single decoder standard would provide open access to all suppliers. Vebacom, a unit of Veba AG, owns Germany’s largest private cable network.

The MMBG alliance is widely expected to set the standard for the technology that viewers throughout Europe will use in the future to receive digital pay-per-view programs through cable or via satellite.

Equal shares

Further details about the ownership structure are to be resolved later, but it is expected that Bertelsmann and Kirch will obtain equal shares in MMBG of probably just under 10% each, industry sources say.

Other shareholders will include European broadcast group CLT, German pubcasters ARD and ZDF as well as commercial web RTL. Austria’s ORF and Swiss TV may also soon join the alliance.

While the so-called Mediabox developed by the MMGB consortium will be the basis of the new digital standard, it is likely that certain elements of Kirch’s so-called “d-Box” will be incorporated in the final standard.

All the technical specifications for the new decoder system will be worked out later, says Nikolaus Formanek, a spokesman for Bertelsmann’s European TV and film operations.

Bertelsmann, Telekom and Kirch had been at loggerheads for months over whether the digital pay TV decoder developed by Bertelsmann and Canal Plus or a competing system developed by Kirch would be used as the technology platform for digital broadcasting.

Behind the skirmish over the decoder is the larger fight over the enormous fees that are expected for licensing the decoder’s conditional access system to program suppliers. The conditional access system will make it possible for paying customers to unscramble encrypted shows.

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