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Ofcom Drops UK Investigation into Open Broadband ISP TV Service YouView

Posted: 19th Oct, 2010 By: MarkJ
uk youview user interfaceuk youview broadband internet tvThe communications regulator, Ofcom UK, has today officially dropped Sky Broadband (BSkyB), Virgin Media and IPVision's (+10 other parties) competition complaints against YouView (Project Canvas) and confirmed that it will not open an investigation under the Competition Act. The regulator stated that it would be too "premature to open an investigation" at such an early stage of YouView’s development.

YouView claims to have developed an "open technical standard" for bringing subscription free broadband ISP based internet TV services ( e.g. iPlayer , 4oD , ITV Player ) directly into homes via special £100-£200 Set-Top-Boxes (STBs). It is a Joint Venture between the BBC , ITV , BT , TalkTalk , Channel 4, five and Arqiva.

However several big rivals, most prominently including Sky and Virgin Media, felt that the platform would be anti-competitive. Indeed they did make some very valid points (here and here), which have been simplified below.
The complainants raised a number of concerns, including that:
* Project Canvas partners are incentivised to withhold content from competing platforms;
* Technical standards produced by Project Canvas had not been developed openly and were not made available for use by those outside the joint venture
* Use of the Project Canvas brand (YouView) is tied to the specified user interface/ electronic programming guide; and
* It is likely to restrict competition between TV platforms.
However Ofcom concluded that the impact of YouView on content syndication is "difficult to determine with any confidence" at this point due to a lack of evidence. It found that YouView's partners had also made a number of technical standards available to the industry already and didn't consider them to be insufficient.

Furthermore the regulator felt that any risk of consumer harm over how YouView appears to impose its own User Interface (UI) upon anybody who wants to use it was not yet sufficient enough to warrant an investigation.
Ofcom - It would be premature to open an investigation because:
* IPTV is still an emerging sector, and the impact of YouView on the market will not be known with any confidence for some time;
* It is likely that YouView will bring benefits to viewers and consumers. Any potential harm to competition would need to be offset against these benefits; and
* Whether or not YouView and its partners will harm competition in the ways alleged will depend upon how this emerging market develops and how they act, particularly in relation to providing access to content and issuing technical standards.
The regulator might not have started an investigation, although it did recognise some significant concerns with the platform and warned YouView to watch its step.. or else. Well perhaps it was something a little less dramatic, but you get the picture.

Ofcom’s Chief Executive, Ed Richards, said:

"Ofcom’s view is that consumers’ interests will not be served by opening an investigation. It would be premature at the current stage of YouView’s development given the absence of a clear risk of consumer harm.

But if evidence does emerge in the future that YouView causes harm to the interests of viewers and consumers we may reconsider whether to investigate."

To sum up, Ofcom recognised that there were potential problems but it could not yet intervene until YouView has actually been given a chance to work. This may or may not end up in future competition concerns and similar complaints being raised again, although we predict that it will probably be awhile before that happens, if at all.

We suspect that Virgin and Sky will be less than thrilled at Ofcom's conclusion. However YouView will need to watch its step too, with the regulator sending a clear warning about what might happen if the platform abuses its position. The first YouView services, most likely from TalkTalk and BT Vision, are set to launch during the first half of 2011 (next year).
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