Ofcom Unveils UK Pay-TV Probe Findings

19 December 2007

LONDON: In a skilled display of fence straddling, communications regulator Ofcom has delivered preliminary findings from its probe into the UK's pay-TV industry.

On one hand, says the watchdog, the market appears to have delivered "significant benefits" to its eleven million customers since its debut in the early 1990s.

On the other hand, the emergence of new platforms, new content providers and the increasing importance of convergence, has flagged concerns that consumer choice could be limited.

The investigation is a response to lobbying by pay-TV providers BT, Setanta, Top Up TV and Virgin Media over alleged anti-competitive practices by satellite TV monopoly BSkyB.

They complain that News Corporation-controlled Sky has "leading market positions" in each tier of the pay-TV supply chain: content acquisition and the supply and distribution of channels.

Ofcom was asked to consider a referral to the Competition Commission but Sky has stoutly defended its position and dismissed the allegations.

Apart from the specifics of the debate over the satellite company's conduct, Ofcom believes possible causes for future concern might be:

  • Whether vertically-integrated firms have the incentive to make their premium content, such as sports and movies, available to other retailers and other platform operators;

  • The ability of firms to compete effectively at the wholesale level for premium content;

  • The enforcement of buy-through (the practice of requiring consumers to purchase a basic package before they are allowed to buy a premium service) at the retail level.
The next step in the investigation is a consultation period during which interested parties are invited to comment on Ofcom's findings to date.

The closing date for responses is 26 February 2008. The full consultation document Pay TV Market Investigation can be found by clicking here.

Data sourced from Ofcom; additional content by WARC staff