UK media regulator Ofcom has said it will review regulations that mean pay-television broadcaster BSkyB must make its Sky Sports channels available through rival providers.
The announcement potentially creates more upheaval in the ongoing pay-television battle between Sky and telecommunications company BT, with the latter seeking to address the former’s dominance of the sports rights market.
In 2010 Ofcom completed its review of the pay-television market inserting a wholesale must-offer obligation into licences held by Sky requiring it to offer to wholesale Sky Sports 1 and 2 to other retailers.
At that time Ofcom said it would carry out a review of the wholesale must-offer in 2013, but this process has been delayed by appeals to the Competition Appeal Tribunal (CAT), and then onto the Court of Appeal.
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.
In February, BT secured a victory in the Court of Appeal that forced the CAT to re-examine its decision to stop Sky being forced to offer its main sports channels to rivals at a discount. BT had challenged the summer 2012 decision by the tribunal that the basis of Ofcom’s decision to force Sky to cut its wholesale charges to show Sky Sports 1 and 2 was “unfounded.” However, Lord Justice Aikens said that the tribunal had failed to properly investigate the issue.
Ofcom said in a statement on Wednesday: “On the basis that the Court of Appeal and the Tribunal have confirmed Ofcom’s jurisdiction under section 316, and in light of our ongoing duty to ensure fair and effective competition in this market, Ofcom has decided to review the wholesale must-offer. This review will take account of any changes in the market since 2010. We will provide an update in due course on our next steps.”
A spokesman for Sky, which has more than 10 million pay-television customers in the UK, told the Telegraph newspaper: “Sky continues to believe that Ofcom's 2010 decision is flawed and that the obligation ought properly to be removed.”
Commenting on Ofcom’s announcement of a review, a BT spokesman added: “(The current obligation) is an important tool given Sky’s dominance of the pay-TV market and we hope it will result in appropriate obligations on Sky so that consumers can benefit.”
Ofcom is separately considering 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. YouView had not been introduced when the wholesale must-offer obligation came into being in 2010.