BSkyB Under OFT Scrutiny

The Office of Fair Trading is conducting preliminary inquiries into BSkyB’s position in the UK satellite and cable market. The office wrote to nine cable companies last month asking whether they had had problems obtaining programmes from BSkyB or other suppliers. It is particularly concerned with BSkyB’s charges to cable operators.

Many cable operators buy BSkyB’s channels to supply them to subscribers, but the cost of doing so means they have started to buy programming for their cable-only channels. This includes bidding for sporting rights, such as the 1996 Cricket World Cup, which has been bought exclusively by cable. It is likely that both sides will be keen to prevent a bidding war breaking out between cable and satellite.

If the OFT finds that there have been problems, it will launch a full investigation.

It has also emerged that several cable companies, including Telecommunications Inc, the largest US cable operator, have approached BSkyB with regard to taking a stake. The attraction of such a link, between a cable operator and BSkyB would be to secure access to BSkyB channels, and avoid bidding wars for programming.

It is thought unlikely that the cable companies will be successful however, because the main shareholders of BSkyB; News Corporation, Pearson and Granada are thought to be unwilling to reduce their holdings.

BSkyB: 071 705 3000