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Ofcom opens consultation on Sky's Freeview plans

LONDON - Ofcom has started its long-anticipated consultation on Sky's plans to replace its free-to-air channels on the digital terrestrial television platform with pay-TV channels.

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Viewers owning a DTT set-top box can currently watch Sky News, Sky Sports News and Sky Three on Freeview.

However, Sky wants to replace these channels with Sky Sports 1 and, in the evening, Sky One, and Sky Movies SD1. The broadcaster would use its remaining bandwidth to retail two further channels (a factual and children's channel) to third-party providers.

On Monday, Sky revealed plans to launch a new umbrella brand, Picnic, that covers DTT, broadband and telephony, subject to approval from Ofcom.

The Picnic proposition will also allow Sky to sell its broadband offering as a standalone option, with customers able to choose one, two or all three of the services.

Before Sky, and National Grid Wireless, can go ahead with the plans, they require the green light from Ofcom. The regulator said that Sky's plans raise various issues, particularly the impact the move would have on competition and consumer interest, and has launched the consultation to garner opinion.

While the Sky proposal would increase the choice and availability of pay-TV to consumers, by making it available on the DTT platform, the regulator acknowledged that it would also have an impact on competition for pay-TV services on DTT and possibly across other digital TV platforms.

For example, if Sky were to become the main seller of pay-TV on DTT, in addition to it already dominating the satellite platform, it may make it harder for other service providers to enter the market.

"This may not be in the long term interest of consumers," Ofcom said. "Ofcom wants to ensure that consumers have the benefit of innovation and new services on digital TV while ensuring fair and effective competition in pay TV, both on DTT and more widely. Such an outcome would maximise benefits for consumers now and in the future."

Ofcom said it is not making specific recommendations, but wants to canvass opinion on three options: unconditional consent to the proposal; consent, but with conditions in place to stem potential competition problems; or no consent to the proposal at this time.

Responding to the publication of the consultation, a Sky spokesman said: "Picnic will increase competition in TV, broadband and phone services and bring viewers a better choice of channels through their aerial. We believe these plans are a positive step for the DTT platform and we look forward to responding to Ofcom's consultation in due course."

The closing date for the responses to the consultation is December 14. The full consultation document is available at www.ofcom.org.uk.

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