Report on ONO Midco, SAU and its subsidiaries as of December 31 ...

programs and content in order to inform and entertain the general public and to broadcast commercial communications. The
provider of audiovisual communication services is the individual or legal entity having effective control (editorial direction) over
the selection of programs, content and their organization (either in a chronological schedule, in the case of television broadcasts,
or in a catalogue, in the case of on-demand audiovisual communication services). These definitions are of utmost importance
because electronic communications operators broadcasting television channels or providing on-demand audiovisual services over
which they do not hold editorial responsibility will not be considered audiovisual communication providers pursuant to the
General Law on Audiovisual Communication with respect to the relevant television channels or catalogues.
The General Law on Audiovisual Communication establishes the right to provide audiovisual communication services.
Service providers only have to notify the relevant authority of their intention to provide services prior to the start of the activity.
As an exception in the case of services rendered through hertzian terrestrial waves, the relevant operator needs to obtain from the
MIET an audiovisual license which will include the corresponding frequency right. Notifications and audiovisual licenses will be
recorded at the State Registry for Audiovisual Communication Services Providers, incorporated in June 2010 by the CMT as a
temporary measure, until the effective incorporation of the State Council for Audiovisual Media (the entity in charge of running it
in accordance with the General Law on Audiovisual Communication).
According to the interim regime of the General Law on Audiovisual Communication, former administrative
authorizations allowing the provision of cable radio and television services have been extinguished. Former title-holders are to be
duly registered ex officio by the CMT at the State Registry for Audiovisual Communication Service Providers.
The General Law on Audiovisual Communication has been recently implemented by Royal Decree 1624/2011 on
certain aspects of television commercial communication (self-promotion, telepromotion and sponsorship).
Cableuropa was granted authorization to provide cable radio and television services under the former cable television
regulatory framework superseded by the General Law on Audiovisual Communication. Cableuropa is also authorized to provide
pay-per-view, nearly VoD and VoD services which are currently considered audiovisual communication services pursuant to the
new EU audiovisual framework and the General Law on Audiovisual Communication (although prior to its coming into force,
they were considered electronic communication services provided under the General Law on Telecommunications). At present,
Cableuropa is registered at the State Registry for Audiovisual Communication Services Providers as a nationwide television
broadcaster with respect to the channels over which it holds editorial responsibility (television, nearly VoD and pay-per-view
channels) and as a nationwide on-demand audiovisual service provider (VoD services over which it holds editorial responsibility).
Ownership Restrictions
The General Law on Audiovisual Communication sets forth the following ownership restrictions on operators
providing national television audiovisual communication services:
• Individuals or legal entities are forbidden from holding a significant stake (that is, holding directly or indirectly
5% of the share capital or 30% of the voting rights, or a lower percentage if such percentage is to be used to
appoint, in the 24 months following the acquisition, a number of members to the board of directors representing
more than half of the total) in more than one operator providing television audiovisual communication services of
national scope, if the average audience of the television channels broadcast by the audiovisual communication
service providers concerned exceeded 27% of the total audience in the past 12 consecutive months;
• Stake participation and voting rights of non-EEA individuals or legal entities in television audiovisual
communication services providers are subject to the reciprocity principle. In the event of an increase in the
existing participation by said non-EEA individuals or legal entities in a television audiovisual communication
service provider after the entering into force of the General Law on Audiovisual Communication, such increase
cannot exceed 50%; and
• Individuals and legal entities are not allowed to acquire a significant stake or voting rights in more than one
provider of television audiovisual communication services:
• when national providers in aggregate hold rights to use the spectrum exceeding the technical capacity
corresponding to two multiplex channels;
• when regional providers in aggregate hold rights to use the spectrum exceeding the technical capacity
corresponding to one multiplex channel; and
• no individuals or legal entities holding a stake in a national provider of television audiovisual
communication services are entitled to acquire a significant stake or voting rights in another provider of the
same service, if the acquisition prevents the existence of at least three different private providers of national
television audiovisual communication services, because otherwise pluralism of information is not
guaranteed.
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