BSkyB, Ofcom at Odds Over Sports

By Kevin Hilton

Satellite broadcaster British Sky Broadcasting and Ofcom clashed again after the U.K. regulator continued its consultation on pay TV Friday, looking specifically at what it sees as the “restricted distribution of premium sports and movie channels” run by Sky.

Although the Ofcom statement made no mention of the recent collapse of Setanta Sports in Great Britain, its view that Sky has a great proportion of the big sporting competitions must have been hardened by ESPN arranging to show its newly acquired Premier League coverage through the broadcaster in the United Kingdom.

By Sky having what it calls “market power in the wholesale supply of channels” showing premium sport, Ofcom feels that consumers will have a limited selection of channels and platforms in the near future. In the longer term, Ofcom foresees new media outlets being “prevented from developing without access to this content.”

Ofcom’s solution is to have Sky make its premium services available to other suppliers on a “wholesale basis” to ensure “fair and effective competition.” As part of the consultation process, a “wholesale must-offer obligation,” with a range of regulated charges, is being investigated.

The Premier League’s commitments to the European Commission regarding live broadcasting rights expire prior to the next auction of packages, scheduled for 2012. Because of this, Ofcom wants to discuss with the Premier League how it will guarantee that the auction conforms to competition law.”That will involve exploring with the Premier League whether it is willing to provide further commitments,” the Ofcom statement said. “We expect the review to cover the supply of Premier League football to commercial as well as residential customers.”

Earlier this month, Sky’s chief executive, Jeremy Darroch, stated that sporting organisations should have the freedom to select a broadcast partner “in the best interest of their sport and its future growth.” Darroch was referring to so-called Crown Jewel events, which are confined to free-to-air transmission. Sky believes sports should not be forced onto this list if the governing body did not agree. Darroch said this limited the choice of partner and reduced competition.

Responding to the Ofcom statement, a Sky spokesperson said, “We disagree fundamentally with Ofcom’s approach, analysis, and conclusions. In light of Ofcom’s determination to pursue its preferred outcome, we will use all available legal avenues to challenges this unwarranted intervention.”

Password must contain the following:

A lowercase letter

A capital (uppercase) letter

A number

Minimum 8 characters