Regulator review for Sky Sports wholesale obligations

Joseph O'Halloran | 17-04-2014

UK broadcast regulator Ofcom may be on the verge of handing pay-TV leader BSkyB an unexpected bonus after announcing a review of the 'wholesale must-offer' obligations placed on its Sky Sports channel.

In March 2010, as part of its Pay-TV Review Statement, Ofcom committed to review the wholesale must-offer remedy it placed on BSkyB. Following the February 2014 decision by the Court of Appeal confirming Ofcom's power to impose the wholesale must-offer, the regulator will now undertake a review of the obligation. During this litigation interim relief arrangements have been in place under which the wholesale must-offer has been in partial effect, covering offers by Sky to supply Sky Sports 1 and 2 to BT over digital terrestrial television and to Virgin Media over cable.
Explaining its move, Ofcom said that it has a duty under section 316 of the Communications Act 2003 to ensure fair and effective competition in the provision of licensed broadcasting services. "We said at that time we would carry out a review of the wholesale must-offer in 2013," it said in a statement. "We note that since then there have been a number of sector developments, which would need to be considered as part of such a review."
The phrase 'sector developments' has been interpreted as the rapid emergence of BT and in particular BT Sport as a real power in the UK pay-TV sector since launch in August 2013. During that time not only has the channel racked up more customers than expected but BT has successfully bid for rights to key events not least Champions League football.
Ofcom's review will not only take account of any changes in the market since 2010 but will also separately consider a complaint from BT under the Competition Act 1998 which alleges that Sky has abused a dominant position in relation to negotiations over the supply of Sky Sports 1 and 2 for BT's YouView platform.