Ofcom Wraps Pay-TV Market Investigation

LONDON: In a move that is being criticized by the likes of the Premier League and the English Cricket Board, Ofcom has ruled that Sky must offer its flagship sports channels to other platforms at a wholesale price set by the regulator.

Ofcom has set a wholesale price of £10.63 for each of Sky Sports 1 and 2, when sold on a standalone basis—a 23.4 percent reduction on the current wholesale price to cable operators. The wholesale price the sports bundle has been reduced by 10.5 percent to £17.14.

Ofcom has also announced that it has conditionally approved Sky and Arqiva’s request to offer pay-TV services on DTT. However, approval of the Picnic service is subject to Sky implementing a wholesale deal under the supply obligation for Sky Sports 1 and 2. If Sky decides to offer movie channels on DTT, those too must be offered to other digital terrestrial TV operators. Further, Sky must offer to wholesale HD versions of Sky Sports 1 and 2.

Ofcom says the new rulings will deliver significant benefits to consumers, including that key sports, such as Premier League football matches, will be available to around 10 million Freeview-only homes receiving TV through an aerial, and via other TV platforms. Ofcom estimates that, as a result of these decisions, there could be around 1.5 to 2 million additional consumers of premium TV channels by 2015. Ofcom also foresees new interactive and on-demand services and a wider range of TV package options.

Ofcom went on to say that Sky is exploiting its market power in the wholesale provision of premium channels. "This prevents fair and effective competition, reduces consumer choice and holds back innovation and investment by Sky’s rivals," the regulator said. "Today’s decisions are therefore designed to ensure fair and effective competition which should lead to greater investment, innovation and choice for consumers.