Ofcom Launches Pay TV Investigation

Ofcom is to investigate the Pay TV market following a submission from BT, Setanta, Top Up TV and Virgin Media.

Following the assessment, Ofcom will decide whether to make a market reference to the Competition Commission.

The investigation of Pay TV will cover subscription and video-on-demand television services on all platforms, including cable, DTT, satellite and TV over DSL.

The submission by Virgin Media et al follows the announcement of Sky’s plan to take its basic channels off Freeview and replace them with pay-to-view channels, and the removal of the basic Sky channels from the Virgin Media cable platform (see Sky Under Pressure From Advertisers And Broadcasters).

In response to the Ofcom announcement, a Sky spokesman said: “The marketplace for entertainment and communications services is fiercely competitive and changing fast. From the BBC to Google, BT to Apple and Vodafone to Virgin Media amongst many others, customers have never had a broader set of businesses competing for their time and custom.

“We note the references in Ofcom’s statement to Sky’s proposed pay-TV service on the DTT platform and the dispute with Virgin Media regarding the availability of Sky’s basic channels.

“BT, Top Up TV and Setanta all have a commercial interest in preventing Sky from increasing customer choice by developing a new pay-TV service on the DTT platform.”

He added: “Recent events have also drawn attention to the fact that cable is a closed network with substantial protections. In any market investigation, we’d expect Ofcom to look at the physical and legal barriers and business practices that shield Virgin Media from true competition and prevent consumers from enjoying lower prices in broadband and telephony and greater innovation and choice in television.”

Ofcom: 020 7981 3040 www.ofcom.org.uk