Sky slams pay-TV investigation

by Danielle Long, Campaign 23-Mar-07

Broadcaster rejects grounds for Ofcom investigation into competitive nature of pay-TV market.

Sky has hit out at Ofcom's decision to investigate the pay-TV market,
saying it "fundamentally disagrees" with claims that the market is not
dynamic and competitive.

Ofcom launched the investigation after it received a joint submission

from BT, Virgin Media, Top Up TV and the Irish-owned broadcaster

Setanta, which raised concerns about the competitive nature of the
pay-TV industry.

Ofcom announced it would investigate the entire pay- TV market, which
includes subscription and video-on- demand television services on cable,
digital terrestrial, satellite and TV over DSL.

The regulator intends to obtain market information from pay-TV
broadcasters to determine if the case should be referred to the
Competition Commission under the Enterprise Act 2002, which deals with
unfair competition and cartel operations, or under the 1998 Competition
Act.

A Sky spokesman said: "We fundamentally disagree with the view that the
pay-TV marketplace is not competitive and dynamic. This is an
investigation into the pay-TV market in its entirety and includes Virgin
just as much as Sky. Ofcom ought to look at how Virgin has a monopoly on
its own cable platform."

However, the investigation has been welcomed by both broadcasters and
the National Consumer Council, which called on Ofcom to step in over the
collapse of the Virgin Media and Sky carriage deal.

A BT spokesman Giles Deards said broadcasters had issued a joint
submission to Ofcom in January, well before the carriage deals
collapsed.

He said: "Our broad observations were that Sky has a very significant
influence over business at a wholesale level and that effects what
retailers do."

A Virgin Media statement said: "This investigation is an opportunity for
Ofcom to ensure that fair and effective competition is introduced into
the UK's pay-TV market for the benefit of consumers."