Ofcom is to examine the pay-TV market after BT, Setanta, Top Up TV and Virgin Media submitted a joint request for an investigation by the industry regulator.
The inquiry is likely to centre around Sky's proposals to launch a new pay TV service, which would be delivered through digital terrestrial networks and not via satellite. The proposal has not yet been given the green light by Ofcom.
The investigation could result in the pay TV market being reported to the Competition Commission.
"After careful consideration, Ofcom has announced that it will investigate the pay TV market, including obtaining information from market participants. Following this assessment Ofcom will decide whether to make a market reference to the Competition Commission," Ofcom said in a statement.
Ofcom also made reference to Sky's withdrawl of some basic channels from Virgin Media's offering. Virgin Media is currently threatening Sky with legal action and the National Consumer Council has threatened to make a 'super-complaint' to Ofcom about the case.
Sky's reaction to the news was understandably defensive.
BT, Top Up TV and Setanta all have a commercial interest in preventing Sky from increasing customer choice by developing a new pay-TV service.
In any market investigation, wed expect Ofcom to look at the physical and legal barriers and business practices that shield Virgin Media from true competition and prevent consumers from enjoying lower prices in broadband and telephony and greater innovation and choice in television, said a Sky spokesman.
Sky has also recently purchased a 17.9 per cent stake in ITV. Ofcom has been asked by the government to conduct an initial investigation, separate from the pay TV market inquiry, into whether the acquisition raises public interest issues and is due to report its findings to the Secretary of State by 27 April.
http://www.ofcom.org.uk/
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Ofcom is to examine the pay-TV market after BT, Setanta, Top Up TV and Virgin Media submitted a joint request for an investigation by the industry regulator.
