The communications regulator today published key industry responses to its consultation market investigation into the pay TV market.
Ofcom will now publish a consultation document on both the pay TV market, and Sky’s proposal to launch Picnic, a pay TV service via digital terrestrial TV service Freeview, at the same time, having decided that there are close links between the two investigations.
In its Ofcom submission Virgin Media argued that there is “no room for doubt” that Sky is preventing competition the market. “In other words, the threshold for Ofcom to make a market investigation reference to the CC is clearly met.”
Virgin Media claimed that Ofcom has understated the market power of Sky, arguing that Sky has “very substantial market power as a purchaser of basic pay TV channels, given the absence of any practical alternatives for basic pay TV channels to achieve significant subscription and advertising revenues”.
Virgin Media also claims Sky’s Picnic proposal has the potential to impact competition in the pay TV sector and impact the future development of the digital terrestrial TV platform. It is urging Ofcom to make its pay TV market findings public before reaching a conclusion on Sky’s Picnic proposals.
Meanwhile Setanta and Top Up TV argue that Sky’s dominance in the market gives rise to a “vicious circle in pay TV which is at the heart of Ofcom’s current investigation”.
Sky, however, argued in its submission that it brings “quality and service” to a competitive market.
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