iesy Repository GmbH - Irish Stock Exchange

The Amendment provides that provisions in the state media laws dealing with the allocation of analog transmission
capacities are only admissible as far as they are necessary to achieve clearly defined objectives of public interest (especially if
such provisions are necessary to safeguard a pluralistic media order, which provides for a diversity of opinions). This
provision within the Amendment has been inserted because the existing “must-carry” regulation probably infringes the New
Framework. As a consequence of the Amendment, all states must now review their state media laws in order to verify if they
are in line with the Amendment. The Amendment will, therefore, most likely result in a less strict allocation regime in the
future with respect to analog transmission, in particular in such states as Hesse that currently do not grant any discretion to
the cable network operator with regard to the allocation of analog programs. It remains to be seen to what extent the states
change their media laws and how the redrafted state media laws will comply with the Amendment or the existing New
Framework.
The specific criteria for the channel allocation are detailed in the respective state media laws. Generally, programs will
be given preference by the state media authorities if they are deemed to contribute to the diversity of opinions in the
respective state so that the state’s mix of channels and programs reflects a range of political, religious, cultural, social and
ethnic views.
In Hesse, as well as in other states, state media authorities allocate channels to programs using the following criteria:
• programs of the respective state’s public broadcasters and open channel programs;
• programs of private broadcasters licensed in the respective state;
• programs receivable via terrestrial antenna;
• general interest programs of private broadcasters;
• special interest programs of private broadcasters; and
• other programs and media services.
In North Rhine-Westphalia the state media authority allocates on average 33 to 36 analog ish channels according to the
following criteria:
• programs of the respective state’s public broadcasters and open channel programs (currently 8 channels);
• For 17 additional channels the channels are allocated according to the principle of the diversity of opinion taking,
however, the following criteria into consideration:
• priority for programs receivable via terrestrial antenna;
• up to two of these channels shall be allocated to programs distributed at a regional, local or state-wide
level;
• for areas close to a border one channel shall be allocated to a program which is terrestrially receivable
across the border in that area;
• one of these channels is reserved for a teleshopping program;
• the LfM North Rhine-Westphalia can further allocate two channels to foreign language programs, if the
programs are determined to a group of foreign inhabitants which represent an important part of the total
population in the distribution area; and
• the LfM North Rhine-Westphalia is entitled to time-share (partagieren) programs or to rotate programs in
cycles.
As a consequence, each of ish’s approximately 4.1 million basic cable subscribers receives a standard programming
package consisting of an average of 33 channels chosen largely by the state media authority. However, out of these channels,
ish has discretion over 8 channels, which are used to maximize attractiveness of content and revenue sharing opportunities.
In states where the state media law grants preference to channels that are terrestrially receivable within the state
(including Hesse and North Rhine-Westphalia), the introduction of DVB-T in several metropolitan areas in Germany (in
Hesse within the Rhine-Main region and in North Rhine-Westphalia in the regions of Cologne/Bonn and Düsseldorf/Ruhr)
might also affect the allocation of analog cable capacities. In Hesse, the roll-out of DVB-T for the Rhine-Main region began
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