UPDATE 3-EU clears Sky Italia bid for Italian TV frequency

* News Corp wants terrestrial television in Italy

* Murdoch to compete with Berlusconi’s broadcaster

* Berlusconi govt, Mediaset attack EU Commission move

(Adds Italy govt reaction)

By Justyna Pawlak

BRUSSELS, July 20 (BestGrowthStock) – The European Commission gave
Rupert Murdoch’s Sky Italia the go-ahead on Tuesday to compete
for a digital terrestrial television frequency in Italy, a move
opposed by rival Prime Minister Silvio Berlusconi’s Mediaset.

Mediaset (MS.MI: ) along with state-owned RAI and small
broadcasters have been opposed to Sky Italia taking part in
Italy’s last sale of digital terrestrial television assets,
saying the market is still not big enough to support further
competition.

Sky Italia welcomed the ruling which Chief Executive Tom
Mockridge said in a statement “confirmed the Italian TV market
has undergone significant changes in the last few years.”

The decision was quickly slammed by Berlusconi’s government
as “severe and unjustified” while the media mogul’s Mediaset
said it would appeal in court against the move.

The Commission said Sky Italia, News Corp’s (NWSA.O: )
satellite unit, could bid on condition that it uses the
frequency for free-to-air television only and not for pay TV
until 2015 — four years later than under a current deal.

News Corp, owner of the Fox broadcast and cable networks,
the Twentieth Century Fox movie studios and newspapers including
The Wall Street Journal and The Sun, agreed in 2003 not to move
into the pay-TV market until the end of 2011.

Mediaset said it was “totally disconcerted” by the
Commission’s decision. It said the conditions which had led to
the restrictions being imposed remained valid.

“This decision authorises a monopolist in satellite and pay
television…to operate in the free-to-air market and gives the
company free rein to acquire frequency assets that are already
insufficient for existing operators,” it said.

Berlusconi’s government attacked the decision.

“This change is severe and unjustified, taken abstractly and
without minimum consideration of its explosive impact on the
Italian market,” Paolo Romani, a deputy minister who holds the
communications portfolio, said in a statement.

A spokeswoman for the Commission, the EU executive,
dismissed media reports suggesting the Italian prime minister
had written a letter at the last minute to lobby against Sky
Italia’s participation.

“I absolutely find no evidence of this,” she said.

Stock Investing

(Additional reporting by James Mackenzie in Rome; editing by
Samia Nakhoul and Elaine Hardcastle)

UPDATE 3-EU clears Sky Italia bid for Italian TV frequency