BSkyB to fight Ofcom’s wholesale proposals

UK pay-TV operator BSkyB has said it will use “all available legal avenues to challenge” Ofcom’s proposals to intervene with subscription video-on-demand movie rights and the next round of English Premiere League broadcast rights.

In the second stage of its consultation into whether Sky is limiting competition in the pay-TV market, the communications regulator has called for the pay-TV operator to wholesale its premium content to its competitors. Ofcom said in a statement that it believes Sky “has market power in the wholesale supply of channels containing this attractive content, and that it is acting on an incentive to limit the distribution of these channels to rival TV platforms”.

It continued: “As a result, Ofcom believes consumers face a restricted choice of channels and platforms in the short term. In the longer term, new platforms based on innovative distribution technologies may be prevented from developing without access to this content.”

Ofcom didn’t specify at what price Sky should wholesale its premium content, but said that it was proposing a “wholesale must-offer obligation, containing a range of regulated prices”. In addition, Ofcom said “specific targeted interventions” might be necessary in relation to subscription VOD movie rights and to the next FA Premier League auction of live broadcast rights.

Sky reacted angrily to Ofcom’s comments, stating that it disagreed “fundamentally with Ofcom’s approach, analysis and conclusions”. In a statement, the pay-TV giant said: “In light of Ofcom’s determination to pursue its preferred outcome, we will use all available legal avenues to challenge this unwarranted intervention.”

Ofcom said Sky’s wholesale revenues would increase under its proposals because the channels would become more widely available.