Sky prepared to fight Ofcom over wholesale premium content

LONDON - Pay-TV broadcaster BSkyB will launch a legal challenge against broadcasting regulator Ofcom, should it rule that Sky must cut the amount it charges other TV companies for its premium content.

Sky: prepared to take on Ofcom over premium content issue
Sky: prepared to take on Ofcom over premium content issue

Ofcom hopes to publish its final decision in the three-year long review of the pay-TV market before the end of the month.

Sources close to BSkyB told Media Week Sky is preparing a legal challenge to the ruling should the June proposals come into force.

It is understood it is likely to rule that Sky must cut the amount it charges operators, including BT and Virgin Media, for its premium channels such as Sky Sports and Sky Movies.

In June 2009, Ofcom suggested there should be a "wholesale must-offer" system, which meant BSkyB would have to offer its premium channels on a wholesale basis to other pay-TV retailers at regulated prices.

The consultation on the proposals closed in September last year and, at the time, Ofcom said it aimed to publish a final statement on the pay-TV market investigation in the first quarter of 2010.

It has been suggested that Ofcom's final decision may also include permission for Sky to offer pay-TV channels to Freeview customers.

Sky originally proposed to offer a triple-play package, with some premium channels, broadband and home phone line, under the name of Picnic, three years ago, but this was blocked by Ofcom.

However, a Sky spokesman said: "We would have loved to offer Sky Sports on digital terrestrial TV three years ago. It's disappointing that viewers have missed out because of Ofcom's bureaucratic logjam. If it was decided that Picnic could go ahead, we would need to consider whether it still made sense as a business opportunity."

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