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Ofcom warns Sky over plans to withdraw free channels

February 19, 2006

Ofcom, the broadcasting regulator of the United Kingdom, has warned satellite television channel Sky that it would carry out a thorough investigation of its plans to bring pay-TV to the Freeview platform.

Ofcom also hinted that it would not approve the proposals if they diminished the appeal of the digital terrestrial package.

Sky had unveiled last week plans to withdraw its free channels from the Freeview platform, proposing to replace them with subscription sports, films, news and entertainment channels.

Ofcom said it had not yet received Sky’s formal application to make the changes, but said that when it did, it would need to determine whether “any variation to the channel line-up might unacceptably diminish the appeal of the channels to a variety of tastes and interests.”

Virgin Media, which has been embroiled in a war of words with Sky for weeks, once again hit out at Sky’s proposals on Friday, claiming that they would be detrimental to Freeview customers.

“Sky's plan to withdraw free channels for the Digital Terrestrial Television (DTT) platform and replace them with pay channels shows how determined it is to undermine Freeview,” a spokesman of Virgin said.

“Policy-makers and consumers alike ought to be concerned about Britain’s dominant pay-TV provider extending its influence to the Freeview platform. The result will be less choice on Freeview,” the spokesman said.

Sky said it believed its proposals would enhance consumer choice. “We believe that our proposals will increase the availability of some of Sky’s most popular content, and will enhance the line-up of programming on the DTT platform,” said a Sky spokesman.

Opinions are polarised on the effects of bringing paid-for television to the Freeview platform.

While Virgin believes it will be detrimental to the pay-TV market, as more pay-TV customers discover they can get the content they want on the Freeview platform without signing up to a full contract, others argue that it will reduce the attraction of Freeview, causing more customers to migrate to pay-TV contracts.

Along with the public row over the future of Freeview, the two companies are also struggling to agree on terms for the provision of Sky channels on the Virgin platform.

This week, Sky took out television advertisements to warn the customers of Virgin that they may lose access to Sky channels in 2007, and urged them to call the Virgin helpline to lobby against their withdrawal.

Though the negotiations are under way, Sky claims that Virgin has failed to offer a fair price for its content.






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