Sky must offer Pay TV to others Ofcom rules

Ofcom today published the conclusion of its investigation into the pay TV market and with it granted permission for Sky to launch its Picnic service on Freeview.

However, while it gives with one hand it's taking away with the other and will force Sky to offer two of its Sky Sports channels to other broadcasters.

Ofcom says the move means that Premium sport, such as Premier League football matches, will be available to around 10 million Freeview-only homes receiving TV through an aerial, and via other TV platforms. Ofcom estimates that, as a result of these decisions, there could be around 1.5 to 2 million additional consumers of premium TV channels by 2015.

Ofcom also believes that consumers are also likely to benefit from the availability of smaller, lower-priced TV packages including Sky Sports 1 and 2, and a greater range of bundles combining pay TV, broadband and phone services.

Sky has slammed the new ruling: 

"There should be no doubt that Ofcom’s actions represent an unprecedented and unwarranted intervention. 

“This is a marketplace where customers are well served with high levels of choice and innovation. Consumers will not benefit if regulators blunt incentives to invest and take risks. 

“After three years of engagement with Ofcom, we now look forward to a judicial process which will apply impartial analysis and clear legal standards”.

Sky will be required to make a “reference offer” - a template contract to other pay TV providers - within 6 weeks of today’s announcement.

However BT, who stands to benefit from the new ruling today, aren't overly happy with the announcement:

“Today’s decision from Ofcom is disappointing, but a step in the right direction", says Gavin Patterson, chief executive officer, BT Retail. "Ofcom should have gone much further than it did. They have dropped movie channels, which should have been included.  They should have included all Sky Sports channels, not just two. The wholesale price for the two sports channels is higher than the regulator had previously suggested. Pubs and clubs should also have been offered some help as they have no option but to pay sky high prices. Ofcom has not set a regulated price for HD channels".

BT says that they will sell the two premium sports channels, Sky Sports1 and 2, at lower prices than those that have been available. We hope to bring them to the market in time for the new Premiership football season, but that will depend on Sky now complying with Ofcom’s decision.



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