Television

 

Legal battle looms as Ofcom prepares to force Sky to sell channels

 

LONDON - Ofcom is likely to force satellite broadcaster BSkyB to sell its sports and film channels at a wholesale fixed price to its rivals within the month.

Legal battle could be in the offing
Legal battle could be in the offing

Industry sources expect the satellite broadcaster to receive a ‘wholesale must-offer’ obligation that would force Sky to make its premium content available to all interested parties, including Virgin Media and BT Vision.

If passed, the cost of watching live football, rugby, boxing and cricket on TV is set to fall in the UK, as it would bring an end to Sky’s dominant position, built since 1989 under Rupert Murdoch.

At present, most operators are unable to agree terms with Sky over its premium content, and those that have, most notably Virgin Media, have complained that they are charged rates which make it impossible for them to compete effectively.

The media regulator confirmed it does intend to publish the findings of its pay-TV investigation in March, but refused to be drawn on any speculation.

Any decision has come too late for Setanta, whose British business collapsed last June following a six-month struggle to raise cash.

The TV operator, which counted Premier League football matches among its offering, was among the original broadcasters to request Ofcom to lead an investigation into the pay-TV industry back in July 2007, alongside BT, Top TV Europe and Virgin Media.

But Ofcom’s ruling is still eagerly awaited by broadcasters operating in the satellite and cable sector.

Other interested parties in this month’s decision include sports and film rights holders whose businesses rely in significant part on fees received for their rights from pay-TV operators.

However, any ruling this month could still fail to provide any immediate action. Alex Haffner, senior associate at competition law firm Denton Wilde Sapte, warns a resolution could still be some two years away.

He said: "The next stage in the battle will inevitably be legal appeals with Sky seeking first to have the Ofcom decision suspended pending a full appeal on the merits of the decision."

Haffner, who has previously acted for rights holders FA Premier League and ECB, in addition to broadcasters ITV Digital and BBC, warned a typical Competition Appeal Tribunal takes between 1-2 years to complete.

He added: "Passions are running high on both sides of the fence. The way Ofcom writes this month’s decision will be key to whether it can effectively neutralise the current arguments."

Sky was unavailable to comment.

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All Comments

martin media - 09 March 2010

"At present, most operators are unable to agree terms with Sky over its premium content."

I think you'll find that BT Vision, Top UP, Talk Talk TV and other smaller operators HAVE agreed terms with Sky for Sky's premium content. I think you need to call Sky asap...before they call you.

 
Arif Durrani

Arif Durrani - 09 March 2010

Oh, that's alright BT Vision, Top UP and Talk Talk TV have agreed terms - and let's not forget Virgin Media has too - so no problem at all then. Waste of everyone's time Martin? Most are unhappy and plenty have failed.

 

martin media - 10 March 2010

1) Please explain what your position is. In the above comment you say "BT Vision, Top UP and Talk Talk TV have agreed terms". But in your story you say "most operators are unable to agree terms with Sky over its premium content". If you do believe that "most operators are unable to agree terms with Sky over its premium content" then please can you tell Virgin Media and Talk Talk TV to stop promoting Sky's premium content! Its an outrage by them http://www.talktalk.co.uk/products/tvextra/sports.html http://allyours.virginmedia.com/html/tv/sky-sports-channels.html

 

Alex Lane - 10 March 2010

To be fair to Sky, Setanta's failure had nothing to do with its premium pricing practices. The Premier League rights auction was, and remains, a fudge, that enables one broadcaster to obtain an overwhelming majority of games and leaves a tiny rump of low-value games that cannot be retailed at a profit.

 

Alan Clinch - 10 March 2010

Only Talk Talk have agreed terms, the article is correct.

 

martin media - 11 March 2010

"Only Talk Talk have agreed terms". So I was dreaming when I was watching Sky Sports on Virgin Media last night? http://allyours.virginmedia.com/html/tv/sky-sports-channels.html

 

Alan Clinch - 11 March 2010

Virgin has access to Sky Sports and Movies at a set price as set by the rate card. There is no agreement with Sky and if Sky was allowed the price would no doubt be a lot higher.

The article does state that Virgin has an agreement anyway so i'm not even sure what your point was to start with.

 

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