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UK Competition Tribunal Tells Sky to Sell TV Sport at a Fair Price to BT

Wednesday, November 5th, 2014 (4:23 pm) - Score 1,043

After four long years of squabbling the Competition Appeal Tribunal (CAT) has today issued an interim ruling that upholds Ofcom’s original 2010 decision against BSkyB (Sky Broadband), which required the media giant to ensure that their Sky Sports channels are made available to BT’s broadband based YouView TV (IPTV) platform.

The case originally started in 2010 after the telecoms regulator imposed an obligation upon Sky that required the TV operator to offer wholesale access (‘Wholesale Must Offer’) to its Sky Sports 1 and Sky Sports 2 channels and at prices set by the regulator. At the time Sky was deemed to have significant market power in the wholesale provision of premium channels.

The case eventually went to the Competition Appeal Tribunal (CAT), which surprised some by ruling that Sky’s prices for the premium content were already fair and thus overruling Ofcom’s decision. Ofcom then complained that CAT’s ruling had failed to correctly consider the regulators findings concerning competition in the market and the case ended up before the Court of Appeal, which earlier this year sided with Ofcom and sent the case all the way back to the CAT (here).

Ed Richards, Ofcom’s Chief Executive, said:

After more than four years of litigation and legal challenges, Ofcom’s 2010 pay TV decision continues to serve the interests of UK consumers and this ruling is consistent with our original decision.

Today’s ruling paves the way for more top sports to be available on another TV service and supports competition and innovation in the communications sector as we originally intended. Ofcom is now focused on reviewing the ‘wholesale must offer’ remedy in light of developments in pay TV.”

The ruling also follows last week’s Supreme Court decision, which effectively rejected Sky’s request to challenge Ofcom’s powers to impose their aforementioned remedy. However, much has changed since Ofcom’s original decision in 2010 and the UK Pay TV market is now a lot more competitive and dynamic, which means that Ofcom will need to publish a new consultation on the ‘Wholesale Must Offer’ situation in the “coming months“.

The new consultation will need to take account of all the recent changes and might well end up being more flexible than the original 2010 decision, especially in light of BT’s big push into the market for premium sports content with their BTSport channels (this is also given for free to BT’s own broadband subscribers). It’s just possible that Sky might also end up benefitting.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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12 Responses
  1. Avatar DTMark says:

    “Wholesale Must Offer”

    It’s becoming more Orwellian by the day.

    Sainsbury’s have SMP around here, and actually sell the stuff we depend on – you know, like food. Where are the price controls? They’re getting away with murder.

    What all this ought to teach the entrepreneurs we need to build and run our networks and service is: don’t.

  2. Avatar Raindrops says:

    Typical of this country to take so long to reach a decision, right or wrong on anything.

    All Sky will do now is move the premium content which every normal person subs to Sky for off Sky Sports 1 and Sky Sports 2, shove it on say Sky Sports 3 and Sky Sports 4 and then let BT and whoever else wants them have Sky Sport 1 and 2 for a bargain price complete with crappy content…….. To a degree they have already foreseen this and took action before the decision by introducing Sky Sports 5 for all the Euro footie

    LOL congrats to BT though you are now going to buy or have the right to buy 2 more channels full of crap. You can now shove another £1 on the line rentals off you retail folk to pay for your legal fight to bring more crap to them.

    1. Avatar fastman2 says:

      not seen anything about cost

    2. Avatar Ignitionnet says:

      Given BT Group have so far spent about £1.5 billion on football rights, about the same as the CapEx on NGA for the entire 2/3rds commercial rollout give or take 10%, I’m sure a reasonable accommodation that will keep BT and Sky happy can be found.

      The Sheeple seem quite happy to pay whatever they are asked to if you dangle football in front of them so BT Group filling their boots would be wise.

      It can easily be subsidised to an extent from other revenues as another option.

    3. Avatar Onephat says:

      I don’t think they can do that. I believe of on warned them not to move content from 1 and 2 on to 3 and 4. I think that’s why bt offer ss5 as champions league football was moved from 1 and thus sky have to offer it to bt or fall foul of ofcom.

    4. Avatar Raindrops says:

      Then Sky will just introduce new channels or total rebrand, perhaps a sky sports football, sky sports cricket and so on, just as they did with F1, funny that eh cricket and F1 rights 2 other things BT claimed they would fight to get before BT Sports came into existence and 2 things they have failed to get.

  3. Avatar NGA for all says:

    Ofcom should be applauded for attempting to create a wholesale market and prevent capital being diverted from networks to the car dealerships favoured by our footballers.

    4 years in the courts, this is exhausting. 7 years to get a judgement on ethernet priicng. This is not the law but abusing the legal process to sustain a monopoly position.

    There must some means of inserting a compulsory arbitration process where the arguements can be had and conclusions reached more quickly.

    1. Avatar Ignitionnet says:

      I doubt this will achieve anything of the sort sadly, NGA. BT have had Sky Sports 1 and 2 on their Vision platform since 2010. Hasn’t stopped them spending £1.5 billion on footie.

      If you were hoping for this to change the ‘feared’ aggressive bidding for more football rights, one analyst putting the cost of this at £1 billion per year by 2017 rather than the current £246 billion per year, I suspect you’ll be disappointed.

      22 blokes on a pitch kicking an inflated bit of leather and rubber sells.

    2. Avatar Ignitionnet says:

      http://www.thisismoney.co.uk/money/markets/article-2806996/MARKET-REPORT-BT-Group-suffers-bad-result-Morgan-Stanley-downgrades-stock-rating.html

      As BT transition to a Pay-TV operator it provides an argument for separation of Retail from the rest of the group. Without this there is no incentive at all for Openreach to do anything other than what is necessary to further their Retail unit’s aims.

      Virgin Media’s USP is their network hence they have to invest to some degree. Openreach have incumbency on their side, and their main customer is an internal one, whose main customer is an internal one.

      Even in the perfect current system Retail have overwhelmingly the loudest voice with Wholesale, Wholesale still have the loudest voice with Openreach; LLU OLOs just want to keep selling cheap, slow ADSL on unbundled loops.

      Forcing the unbundling of the fibre between BT’s exchanges alongside leaving BT Group no Retail operation stands a chance of improving things.

      It worked pretty well in Japan.

    3. Avatar DTMark says:

      This isn’t creating any market in the sense of free markets. I find it extraordinary that anyone would think that effectively commandeering private resources which give one company a USP and forcing said company to wholesale them is a good idea.

      Televised sport, perhaps even television, does not come even close to passing any “basic human need” test to be able to justify that.

      Logically, having set up all the infra, the depots, the warehouses – the supply chain – to get their goods to the store in Alton, Sainsburys (the only supermarket) should then be forced to white-label and wholesale their food to local grocers in the area at a fair price, which would then mean that they were able to cut a profit off the back of someone else’s ongoing labour and endeavours.

      That might even pass the “basic human need” test but it’s still equally ridiculous.

      Finally, a “fair price” would be that agreed between the parties; a free market. There is no other way that I can see to determine a “fair” price other than that price discovery mechanism.

    4. Avatar NGA for all says:

      @DT Mark I was clutching at straws somewhat. With £1bn a year for BT to stay in sport this was a very inadequate way to suggest that network investment needs to be ring finced and not let to the discetion of BT Group. Even introduced now, it would have a very positive effect how the gov cash of £1.2bn + £500m was spent.

  4. Avatar adslmax says:

    Waste of time in court!

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