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Clouds over merger

Cablers want court to halt digital TV combo

MADRID — Spain’s cable operators filed appeals with the country’s Supreme Court on Monday, calling for the suspension of Sogecable and Telefonica’s just-confirmed pay TV mega-merger, claiming it threatens the industry’s viability.

Telcos ONO and Spain’s Assn. of Cable Operatorsfear a single digital platform would mean higher prices for movie or soccer program deals with cable operators.

Under the Jan. 29 deal, Sogecable’s Canal Satellite Digital will swallow up Telefonica’s Via Digital to create Europe’s third-largest pay TV player (as yet unnamed) after the U.K.’s BSkyB and France’s Canal Plus. Sogecable’s platform already controls 75% of the local pay TV market.

Looming legal trouble

The appeals add a further layer of legal cloud to the merger.

Sogecable and Telefonica have appealed to the Supreme Court against five of the 34 antitrust conditions imposed Nov. 29 by the Spanish government, including a four-year price freeze on a single platform.

Broadcaster Telecinco also is trooping to the Supreme Court, alleging the merger creates a potential TV monopoly in Spain.

The court should rule on a merger suspension in a couple of months. A final judgment, however, could take a couple of years.

Sogecable shares fell 8% in trading Tuesday.

(Emiliano de Pablos contributed to this report.)

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