Ofcom sits on pay TV
Posted by scott on May 13th, 2008Ofcom has published all of the non-confidential responses to its consultation on its market investigation into pay TV in the UK, following receipt of a number of late responses (one of which was from Sky). Ofcom recognised that there are issues raised by the Sky/NGW proposal to replace Sky’s free channels on Freeview with pay TV channels that will inform the market investigation and vice versa. Engagement with stakeholders has confirmed that the issues regarding the Sky/NGW proposal, such as access to premium content, need to be considered alongside the wider market investigation.Ofcom therefore intends to publish a further consultation document on each subject simultaneously by the end of summer 2008.
I think the most interesting thing here is how slow Ofcom have gone on this. It was back in March 2007 when Ofcom said it would look at the Pay TV market - as Sky says, from a complaint made by BT, Setanta, Top Up TV and (of course) Virgin Media. It took Ofcom until January THIS year to consult on it (Sky/NGW proposal was consulted on in Oct 07), and now it is putting off until the end of summer issuing further consultations, pretty much guaranteeing that no action will be taken, one way or the other, until the start of 2009. I actually think that Ofcom is hoping that if it drags thing out long enough that any possible case against Sky might evaporate.
Sky’s attempts to play the victim here, don’t really wash with me either. This is not to say I don’t think they make some valid points, but as with Virgin Media in their battle with Sky over carriage rights, it all sounds just a little to self righteous and arrogant to me. Ofcom certainly do not have it in for Sky, our friend at Rapture TV would certainly attest to that. Whether or not there is a case really rests on the level of importance given the Sky’s power in the wholesale market.
The Association of Licensed Multiple Retailers submission, in regard to pay sports coverage via Sky is interesting. They say: “For this segment of the market, premium sports are exclusively available through one platform and one provider… There is no choice of platform available to commercial subscribers because of BSkyB’s policy on wholesale pricing for commercial services - and in particular premium sports broadcasting - to competing platforms. Subeconomic pricing has seen the exit of cable competitors from the commercial market. Moreover, Setanta Sports is only available to commercial subscribers as a buy-through from Sky’s basic tier service. We believe that this is only the case for commercial subscribers, but the pub and club agreement makes clear that sourcing Setanta via another route will be in breach of the contract.”
This kind of thing is likely to catch Ofcom’s eye more than whinges from Virgin et al. That all said, at the end of the day I actually feel Tiscali get it right when they say in their response “It is vitally important that Ofcom’s focus remains on the facts of the UK market and what might need to be done to protect and advance the interests of competition and thus the consumer, rather than commercial and public conflicts between large companies.”
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