Sky’s New DTT Proposal Could Damage Freeview

Communications regulator Ofcom has launched a consultation on Sky’s proposals for a pay-TV service on digital terrestrial television, expressing concerns that the service might “unacceptably diminish the appeal” of Freeview.

Sky needs Ofcom’s approval for the launch of a subscription service, which would sit alongside Freeview channels and require a new kind of set-top box for viewers (see New Sky Service To Lure Consumers From Free TV).

The broadcaster’s plans could be a measure to limit the appeal of Setanta’s paid-for sports offering, which will bring live Premiership football back to DTT from August. It will offer a subscription channel on Freeview, meaning that any home with a set-top box will be able to receive the channel for a monthly fee (see Setanta Sports To Offer Channel On Freeview).

Sky’s planned service will offer live football and other sports, as well as movies, entertainment and news. It would replace the company’s current free-to-air offering of Sky News, Sky Sports News and Sky Three.

Ofcom said it would examine the impact of Sky’s plan to use MPEG4 compression technology via new set-top boxes to squeeze out space for extra programming.

While such a change could provide potential benefits, Ofcom will also assess the “potential detriment associated with a reduction in the number of channels received by existing set-top boxes or digital televisions”.

It also flagged up the risk that existing set-top boxes or digital televisions might be “incompatible with multiplexes broadcast using a combination of MPEG2 and MPEG4 coding”.

Ofcom is also concerned that Sky’s plans could affect consumer confidence in the digital switchover process.

The regulator said it would examine whether any change in the channel line-up on digital terrestrial TV might “unacceptably diminish the appeal of the channels to a variety of tastes and interests, and whether a reduction in the current range of free-to-air channels would be compensated for by the proposed introduction of the new pay television channels”.

Its final concern is to ensure fair and effective competition for digital TV licences for the benefit of consumers.

BSkyB: 020 7705 3000 www.sky.com Ofcom: 020 7981 3040 www.ofcom.org.uk