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Spain sets RTVE budget

State and private sector fund giant pubcaster

Spain’s lower house has approved a law setting an annual budget of up to E1.2 billion ($1.7 billion) for giant pubcaster Radio Television Espanola in 2010 and 2011, after the government nix on advertising comes into effect.

RTVE will be financed by the state and private-sector levies, following the Gallic model rather than the British one, which is totally state financed.

Under the new law, thought to be a shoo-in when it goes before the upper house shortly, telcos will contribute 0.9% of their annual revenues, pay TV operators 1.5% and free-to-air broadcasters 3%, up to a total combined ceiling of $1 billion.

The government would contribute the remainer of the budget, putting taxpayers on the hook for at least $700 million.

Deputy prime minister Maria Teresa Fernandez de la Vega took the industry by surprise when she announced on May 5 that the government would end advertising on RTVE, probably from January — although a firm date has yet to be set.

Given Spain’s dive in TV ad revenue, RTVE will probably emerge from the ban better off. Its budget ceiling for the next two years is about 10% up on this year’s total.

Local telcos have already said they’ll fight the new levy all the way to the highest European courts.

Gallic telcos also fought government-enforced levies to finance pubcaster France Televisions — including France Telecom which is 25% owned by the state. But the levies, introduced last January, were approved.

In Spain, where dominant telco Telefonica is privatized, they will have a tougher time overturning the new regulation.

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