OFT to review Project Canvas

The Office of Fair Trading is set to review Project Canvas, the internet TV service backed by ITV, BBC, BT, Five, Channel 4 and TalkTalk.

The project, which aims to bring VoD content to digital viewers via Freeview and Freesat, will be examined formally for the first time, giving its critics including Sky and Virgin Media a chance to submit their concerns to the regulatory body.

The BBC Trust gave the project a provisional green light in December last year following an in-depth review into the proposed venture.  However, it set out some conditions on the BBC’s participation in the project.

At the time, Diane Coyle, chair of the Trust’s Strategic Approvals Committee, said: “After careful consideration, the Trust has provisionally concluded that Canvas is likely to benefit licence fee payers. We believe Canvas could be an important part of the way in which the BBC delivers its services in the future.”

However, critics have consistently argued that Ofcom should have conducted a market impact assessment of the proposed service, so they will be pleased to get a chance to make a submission to the OFT.

The competition body is expected to launch a consultation requesting views on Project Canvas from the industry this week.

The review will last for several weeks, according to reports, before the OFT decides whether to clear Canvas of reaching the merger threshold for a formal competition investigation, ask the partners to propose remedies to address concerns voiced by critics, or refer the project to the Competition Commission.

To qualify for an OFT investigation, Project Canvas’ UK turnover forecast must be £70 million a year or hold more than a 25% share of a nascent UK VoD market as defined by the regulator.