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Ofcom commences review of the wholesale must-offer on Sky Sports 1 and 2
1andrew1
Posts: 4,088 Forum Member
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Extracts from Ofcom press release:
Ofcom has today outlined plans to review the ‘wholesale must-offer’ obligation placed on BSkyB in relation to its Sky Sports 1 and 2 channels.
As part of the Pay TV Review Statement of March 2010, Ofcom committed to review the wholesale must-offer remedy it placed on BSkyB. Following the February 2014 decision by the Court of Appeal confirming Ofcom’s power to impose the wholesale must-offer, Ofcom will now undertake a review of the obligation. We note that the Supreme Court is considering an application from Sky for permission to appeal the Court of Appeal’s judgment.
Ofcom is separately considering a complaint from BT under the Competition Act 1998 which alleges that Sky has abused a dominant position in relation to negotiations over the supply of Sky Sports 1 and 2 for BT’s YouView platform.
See http://stakeholders.ofcom.org.uk/broadcasting/reviews-investigations/pay-tv/pay-tv-wholesale/
Ofcom has today outlined plans to review the ‘wholesale must-offer’ obligation placed on BSkyB in relation to its Sky Sports 1 and 2 channels.
As part of the Pay TV Review Statement of March 2010, Ofcom committed to review the wholesale must-offer remedy it placed on BSkyB. Following the February 2014 decision by the Court of Appeal confirming Ofcom’s power to impose the wholesale must-offer, Ofcom will now undertake a review of the obligation. We note that the Supreme Court is considering an application from Sky for permission to appeal the Court of Appeal’s judgment.
Ofcom is separately considering a complaint from BT under the Competition Act 1998 which alleges that Sky has abused a dominant position in relation to negotiations over the supply of Sky Sports 1 and 2 for BT’s YouView platform.
See http://stakeholders.ofcom.org.uk/broadcasting/reviews-investigations/pay-tv/pay-tv-wholesale/
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Comments
The gift that keeps on giving...:D
Stew
I'm sure that's the kind of argument that Sky will be using.
Pot and kettle arguments all the time...
In fact, it's left it 4 years - presumably because of the ongoing case at the Competition Appeal Tribunal and the ongoing legal action at the Court of Appeal.
Of course it's somewhat comical to think that nothing that has happened at the Competition Appeal Tribunal or the Court of Appeal during those 4 years has actually had any practical impact at all - the "wholesale must offer" obligation came into effect in 2010 and has remained in effect ever since.
The only slight twist is that (as agreed right at the start at the CAT in 2010) VM, BT etc are continuing to pay the Sky rate card wholesale price, with Sky only receiving the OFCOM regulated wholesale price and the difference going into an Escrow account. But the amount of money at stake there is actually quite small - from memory approx 18 months ago the total in the Escrow account was a bit under £30m.
Just think of the money spent in legal fees!
However OFCOM reviews often take quite some time and there will be a lot of work for them to do reviewing the current position - so it makes sense for them to start now and get all the groundwork done.
If the PL auction then materially changes the current position they can then reflect that in their final decision.
In fact if Sky has to do a wholesale must offer on its Sports 1 and 2 on all platforms BT should be forced to do the same wholesale must offer thing with its 1 and 2 sports channels and in HD ether way too!
You may need to develop a sense of humour then ;-)
I was simply making the perfectly valid point that BT are acting somewhat hypocritically by complaining about Sky's dominant position in one area in which they compete whilst defending its own dominant position against Sky (and others) in another using the reverse argument. For the record Sky does exactly the same - I wasn't taking sides. I'm not naïve so I'm not surprised that companies act like this. That's why we have regulators.
However it is fair to point out when a company is acting in a two faced sort of way.
That idea smacks too much of common sense
Also works dangerously in favour of the consumer...
and why should that bother Ofcom so much? I thought they were supposed to help the consumer?
Are they only out to help BT by forcing the wholesale of Sky sports 1 and 2? if so they are not being very competitive are they?
Is it time for a new fairer regulator?
Except that BT are hamstrung with must offer type regulation all over the place. Where did openreach come from?
Split content and platform - for everyone - it has to be done or this will go on forever.
if you can't beat them, sue them. Seems to be working for Apple...
If BT obtains most Premiership rights then who knows, BT may have to wholesale BT Sport 1 & 2.
The obligation was imposed because Sky is the dominant sports rights owner and dominant pay TV paltform. Just because another company starts a TV platform and sets up a sports channel does not mean that it meets the wholesaling obligations.
You could argue that beINSport may step in to the gap and offer great coverage on all platforms. But that company is dependent on subsidy from the Qatar government which cannot be certain in the long term.
Nobody is beating Apple though!
By the same token there is a need to ensure a level playing field. The difference with the BT/Sky scenario is that both run platforms and have pay sport channels whereas BT's predecessors were channel only operations and the other platforms don't have competing channels.
Just as allowing Sky to wholesale BT Sport might have the affect you say, by the same token Sky may have valid concerns that if BT had access to Sky Sports for You View they would offer it in such a way (and they have the financial resources to afford to do so) as to damage Sky's own business model - offering at a significant discount as against the wholesale price or whatever.
As you mentioned earlier both are defending their own commercial interests. At the very least I think there may need to be rules against predatory pricing tactics eg if there is a must offer requirement you can't offer the channels to your own customers at less than the wholesale price or less than the wholesale price plus x%.
I think they should also be allowed to offer their own channels directly to the other's customers (as BT do now) on the other's platform on whatever basis they want. That might deal with the concern you raise as you would still be able to watch BT Sport on Sky - either at a lower cost tied to BT Broadband (as I do) or as part of your normal Sky subscription (without BT Broadband but at a higher price).
I also think that if BT want to be able to wholesale Sky Sports the same should apply in return. They are a significant competitor and shouldn't be able to have it both ways.
I totally agree!
More.. http://advanced-television.com/2014/11/05/tribunal-upholds-ofcom-pay-tv-ruling/