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Ofcom Delays Force Sky to Suspend Picnic Broadband Plans

Posted: 13th Sep, 2008 By: MarkJ
BSkyB (Sky Broadband) has officially suspended the introduction of its much delayed Picnic service (related news), which would have combined a new set of Freeview based pay-TV channels with a broadband and phone service. In a statement the operator put the blame squarely at Ofcom's feet, something the regulator strongly refutes:

Sky Statement: "The blunt truth is that Ofcom has spent 18 months looking at our proposals and there is no end in sight. The Picnic team have done everything they can to prepare for launch and there's nothing left to be achieved until Ofcom makes its mind up."

However Ofcom has been quick to issue a statement of its own (here), which is rare enough in itself but also points to several seemingly deliberate attempts by Sky to extend its investigation process:

Ofcom Statement: The Picnic proposal raises complex issues, and is likely to have a significant effect on the future development of the PayTV market as a whole. As all parties are aware, Ofcom will very shortly issue a further consultation document. Any decision to suspend the project is entirely a business matter for BSkyB.

Ofcom rejects the implications of BSkyB’s comments today and would highlight the following facts:

  1. Having announced Picnic in a press statement in February 2007, BSkyB took two months to submit the necessary application and a further two months to provide sufficient information to enable Ofcom to publish a consultation document on the matter.

  2. When Ofcom consulted on both the Picnic proposal and the PayTV Market Investigation, several stakeholders, including BSkyB, responded late to these submissions.

  3. BSkyB submitted its response on the PayTV Market Investigation over six weeks after the 26 February 2008 deadline.

  4. We have received a number of supplementary submissions from stakeholders after deadline dates which we are bound to consider. The most recent one from BSkyB arrived as late as 13 August 2008.
BSkyB has raised a series of procedural points throughout this period, including a repeated concern that we are spending insufficient time considering its arguments.

The result is that Sky will shortly begin redeploying as many of the Picnic team as possible to other parts of the business, which could affect between 30 and 60 people depending on whom you speak with.

Thankfully all may not be lost, with Sky being keen to stress that it continued to believe in the Picnic product and pledging to review the package once there's some certainty surrounding its situation.
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