Ofcom still unsure on Sky probe

So is Sky unfairly trampling on its pay-TV competitors or not? Ofcom’s latest pronouncement suggests that they're not entirely sure...

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Last Updated: 31 Aug 2010

In a classic display of fence-sitting, the regulator has published its findings on the industry – and said that it needs more input from those in the market before deciding whether to extend its investigation.

Perhaps in an attempt to spread some Christmas cheer, it’s not bowing to rivals’ demands to clip Sky’s wings – or at least not yet. Instead it’s hedging its bets: it thinks that pay-TV has delivered ‘significant benefits’ to its 11m subscribers, but accepted that there were some ‘warning signs… such as areas where consumer choice may be limited.

Ofcom was forced into an investigation by a complaint about Sky from the likes of BT, Virgin Media and Setanta Sport, who ran to teacher alleging that the big boy was bullying them. They suggested that Sky was preventing competition by cornering the market for premium content and then charging exorbitant amounts for others to re-show it. They want a Competition Commission enquiry, to force Sky to play nicely.

Naturally Sky doesn’t agree, and made a submission to Ofcom saying as much. It (quite reasonably) pointed out that if it was restricting competition, Setanta wouldn’t have been able to take over some of the rights to the football Premiership this season.

Ofcom hasn’t accepted all their arguments, however, judging by today’s report. It thinks there may be unfair barriers to entry for premium content, and said it’s also worried about providers (i.e. Sky) forcing people to buy a basic package in order to acquire premium services.

Or then again, maybe it’s all good. They’re not really sure.

You can probably guess what will happen during the new consultation period, which will last until the end of February. BSkyB will continue to insist that it’s doing nothing wrong and is in fact delivering an invaluable service to consumers, while all its rivals will continue to insist that it’s still flushing their heads down the toilet and stealing their lunch money…

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