OFT To Review BSkyB’s Position In Pay-TV Market

The Office of Fair Trading (OFT) is to hold a review of BSkyB’s position in the pay-TV market as a broadcaster and channel provider, it announced today. The competition watchdog is to assess whether Sky’s position is too dominant and whether undertakings made by Sky in 1996 to ensure fair competition between the satellite broadcaster and the then smaller cable companies still apply today.

The review has been prompted by recent consolidation within the cable industry which has seen the number of major cable companies reduced to three, two of which, Cable & Wireless Communications (CWC) and NTL, are awaiting merger clearance from the Competition Commission (see Cable & Wireless Communications “Disappointed” By Stephen Byers Move). The third major presence in the cable world is Telewest Communications which has itself recently agreed a merger deal with television channel producer Flextech (see Telewest/Flextech Merger Plans Revealed).

John Bridgeman, director general of Fair Trading, says: “The UK has a unique position in digital broadcasting and the TV industry is rapidly evolving. We have to be sure that competition is healthy and responsive to developments. Our approach is from the perspective that regulation should be kept to the minimum necessary to promote competition. We will be consulting widely with the aim of establishing the appropriate level of regulation.”

As part of the informal undertakings set out in 1996, BSkyB agreed to provide channels to cable operators for onward broadcast. Under this arrangement Sky is required not to bundle certain channels and to publish a ratecard showing its wholesale prices for cable companies, with a discount structure that has been pre-agreed with the director of Fair Trading.

Office Of Fair Trading: 020 7211 8000 BSkyB: 020 7705 3000