Ofcom To Look At Sky’s Pay-TV Picnic

Ofcom has begun a consultation into Sky’s plans to launch a pay-TV service on the digital terrestrial television platform Freeview.

The pay-TV service, which Sky unveiled on Monday under the name Picnic, would see Sky News, Sky Sports News and Sky Three replaced on Freeview with Sky Sports 1 and, in the evening, Sky One (including an hour of Sky News content) and Sky Movies SD1.

Sky would use the remainder of its capacity to retail two further channels from third party providers in the daytime: a factual channel and a children’s channel (see Sky Announces Details Of Proposed New Service).

Ofcom has asked for people’s views on three broad options, which range from “consenting to the proposal unconditionally” to “not consenting to the proposal at this time”.

The regulator said that Sky’s proposal “would increase the choice and availability of retail pay TV services on the DTT platform. Consumers would be presented with an increase in choice of sports, movies, factual, children’s and general entertainment programming.

“However, it would also have an impact on competition for pay TV services on DTT and possibly across other digital TV platforms.

“For example, if as a result of Sky’s position in the wholesale provision of sports and movies channels, Sky were to emerge as the main retailer of pay TV services not only on the satellite platform but also on DTT, other providers of pay TV services may find it more difficult to enter the market”.

Ofcom will also ask for views on whether additional conditions should be imposed on Sky’s plans to reduce the risk of competition problems.

The possible types of conditions ofcom has identified for consultation include the wholesale provision of key content to other retailers, conditions which involve technical interoperability of pay TV services and set-top boxes, and limiting Sky’s ability to retail channels directly on the DTT platform.

The closing date for responses to the consultation is 14 December 2007.

Commenting on today’s announcement, a BT spokesperson said: “Sky’s DTT plans raise significant issues for the UK TV market and in particular for the development of Freeview and competition in Pay TV.

“We support Ofcom’s decision to examine the potential impact of these proposals on consumers and their approach to consult widely and consider the application carefully. We will set out our views more fully in response to the consultation.”

Ofcom: 020 7981 3040 www.ofcom.org.uk Sky: 08702 40 40 40 www.sky.com