ROME — In a blow to former prime minister Silvio Berlusconi’s Mediaset, Italy’s parliament on Thursday passed a bill to sell-off digital TV frequencies, reversing previous rules under which Mediaset was poised to get these frequencies for free, and opening up the Italian TV market to new players.

Meanwhile, in a clear sign that the Italo market is already evolving, local broadcaster Switchover Media, which currently operates DTT kiddie channels K2 and Frisbee, has announced it is expanding into generalist TV with two more DTT channels, to be headed by former Fox Italy Entertainment topper Fabrizio Salini. Further details are still under wraps.

The current Italo government, headed by technocrat Mario Monti, claims the DTT auction could bring at least $2 billion into the country’s ailing state coffers. Sale has been fiercely opposed by the center-right force headed by Berlusconi, who resigned in November.

Mediaset chairman Fedele Confalonieri has called the government’s decision “punitive” and said he is unsure about his company’s participation in the auction for six digital frequencies, each carrying six channels.

Other existing local players, including Rupert Murdoch’s Sky Italia, Telecom Italia Media and pubcaster RAI have yet to reveal their plans for the auction.

According to Italo press reports, Mediaset and RAI, which are Italy’s two top TV players, may be able to access more DTT bandwidth even without taking part in the sale by getting permission to use frequencies they already own, now limited to mobile TV.

The new Italo DTT auction is also open to foreign players.