BSkyB criticises handling of Project Canvas
BSkyB has criticised the BBC Trust’s decision not to conduct a full market impact review of Project Canvas and said the proposed service is “likely to qualify” for an OFT investigation.
BSkyB argued that the BBC’s proposals for the joint broadband TV venture with ITV and BT are not clear enough for a proper consultation, which is also likely to come under scrutiny from the Office of Fair Trading as a “relevant merger situation”, according to the satellite broadcaster.
The Murdoch-owned company attacked the BBC Trust’s decision not to submit Project Canvas to a full public value test, which would be carried out by media regulator Ofcom.
A public value test would involve Ofcom conducting a market impact assessment of the proposed service’s affect on its commercial rivals, which would include BSkyB.
It has also called on the BBC Trust to assess the likely risk of the venture, which aims to bring catchup services from the PC to the TV via Freeview and Freesat, breaking the European Union state aid rules before decided whether to go ahead with it or not.
In its submission to the BBC Trust’s consultation on Project Canvas, BSkyB, said: “The trust should subject the proposals to the highest level of scrutiny, in as transparent a way as possible, including submitting the proposals to a full public value test or equivalently robust procedure, with a market impact assessment conducted by Ofcom.
“As a relatively new body, facing scepticism in some quarters as to its independence from the body it regulates, it is especially important for the Trust to demonstrate its ability to regulate the BBC’s proposed activitives … in a rigorous and impartial manner.”
Sky also argued that the BBC has not “adequately demonstrated” that there is unsatisfied consumer demand to warrant the project, and said that if it goes ahead it will position the BBC as a “market maker”, which could distort competition from its commercial rivals in the on-demand market.
“In the circumstances, if the trust continues with its current process, the trust risks reaching a decision based on a set of inchoate proposals whose impact on the public interest, of which the trust is the guardian, has not been properly gauged. This could ultimately call into question the reasonableness and validity of the trust’s decision,” Sky added.
Last month, Ofcom warned that Project Canvas could face a competition investigation, similar to the one that scrutinised and subsequently blocked the VoD venture between BBC Worldwide, ITV and Channel 4, Project Kangaroo (see Competition Commission “stops” Kangaroo).
In its submission to the BBC Trust, Ofcom’s Peter Phillips, said: “We understand that issues relating to the compliance of Canvas with all relevant competition obligations will be considered within the trust’s assessment, including those arising from arrangements specific to the BBC and also those arising as a result of competition, merger and state aid law.
“In that regard we recognise that there may be a future role for the OFT and/or Ofcom to assess the arrangement under relevant merger or competition law.
Phillips added: “While the benefits of Canvas are potentially significant we would encourage the BBC to continue to ensure its content is made available on a wide range of platforms. In other words, it is important that comercially-led propositions which seek to compete with Canvas should not be unfairly prevented from accessing BBC content,” (see Project Canvas could face competition investigation).
Ofcom’s response came just days after ISBA backed Project Canvas, saying it would be “an important commercial counterbalance” to the BBC’s iPlayer service (see ISBA endorses BBC’s Project Canvas).