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Ofcom to consult public on BskyB
plan for pay-TV channels
BY A CORRESPONDENT
28 June, 2007:
Ofcom, media regulator of the
United Kingdom, is to consult the
public on plans by British Sky
Broadcasting Group PLC (BskyB) to
launch pay-television services on the
country’s free-to-air digital TV
platform.
BSkyB, which is Britain’s dominant
pay-television operator, had said in
February 2007 that it planned to
replace its existing three basic free
channels on the Freeview service with
four paid channels to show soccer,
films, entertainment and news.
Ofcom, which has previously suggested
that the move could “unacceptably
diminish the appeal” of the
free-to-air platform, has now said
that the plans “raise a number of
important issues, including a
consideration of how Ofcom can best
ensure fair and effective competition
for the benefit of consumers.”
Ofcom will begin a 10-week
consultation with the public and other
interested parties in the autumn
before issuing its decision in 2008.
BSkyB had originally planned to use
newer MPEG4 compression technology for
the four channels, which would have
required many viewers to buy new
set-top boxes. However, Ofcom said the
other day that BSkyB told the
regulator in a submission that it
would not use MPEG4 at this stage.
BSkyB, which is 39% owned by Rupert
Murdoch’s News Corp., is already under
scrutiny by several British anti-trust
authorities over its dominant position
in the domestic pay-TV market.
Ofcom is conducting a separate inquiry
into the competitiveness of the
industry after complaints from
companies, including Richard Branson’s
Virgin Media Inc. and Irish
broadcaster Setanta, which said that
BSkyB sometimes acted
anti-competitively.
In another investigation, the
Competition Commission is
investigating whether BskyB’s 17.9%
stake in ITV PLC, the largest
free-to-air commercial broadcaster,
breaches competition rules.
The United Kingdom’s House of Lords
has already launched an inquiry into
media ownership and the news,
following an increasing concentration
of ownership in the media.
The inquiry will look at several areas
of the industry, including how public
interest should be protected and
defined in terms of news provision and
whether or not some of Ofcom’s
public-interest considerations were
enough to ensure what the House of
Lords termed as a “plurality of
debating voices” in Britain’s news
media.
The inquiries are the first major test
of the influence held over the British
media by Murdoch, BskyB’s chairman as
well as its largest stockholder.
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