Ofcom reviews pay TV regulation behind Sky Sports availability on other platforms
The announcement comes days after BT added Sky Sports 1 and 2 to its YouView service, after the "Wholesale Must Offer" was extended to BT's second TV platform.
In 2010, Ofcom imposed an obligation requiring Sky to offer to wholesale Sky Sports 1 and 2 at prices set by Ofcom. This was designed to deliver choice and innovation to consumers through greater competition. The obligation has been in effect since 2010 for Virgin Media (cable), BT (Vision+ platform) and until 2013 Top Up TV (digital terrestrial TV) while litigation has been on-going.
But while most pay TV companies have been able to agree commercial terms with Sky to offer Sky's premium sports channels to their customers, there has been no such agreement between BT and Sky following BT's entry into the premium sports TV market.
Sky and BT have been unable to reach an agreement over commercial carriage of all Sky Sports channels on YouView. Sky has reportedly threatened to pull Now TV on YouView, unless it the platform can facilitate live streaming of its channels, which would allow Sky to offer its sports channels via the Now TV app, sidestepping BT.
On satellite, BT sidesteps Sky; although appearing on Sky's channel list, viewers have to contact BT and not Sky to subscribe to BT Sport 1, 2 and ESPN UK.
Any changes to the regulation could affect the availability of Sky Sports on BT YouView in the future in the absence of any commercial carriage deal.
Announcing a consultation on whether such a remedy is still appropriate Now Ofcom says that the "pay TV sector is evolving rapidly and any assessment is affected by continuing developments in the market.
In assessing whether regulation remains appropriate or whether it should be removed, Ofcom will take account of such developments, including the outcome of the next Premier League auction."
Ofcom’s assessment indicates that Premier League and Champions League football are key content likely to be capable of influencing consumers’ choice of pay TV retailer. Therefore, Ofcom is consulting on its view that limited distribution of this content may harm competition between pay TV retailers.
Examining the current situation, Ofcom's assessment, released today notes: "The content Sky has is likely to influence the purchasing decisions of a sizeable proportion of high-value customers. Retailers that do not have access to this content would find it more difficult to compete for these customers.
"Given Sky’s continued strong market position, Ofcom is seeking views on its assessment that if there was limited distribution by Sky of its key sports content, competition between pay TV retailers may be harmed. Ofcom is also seeking views on whether, given its market position, Sky may have incentives to limit distribution of its key sports content.
"BT holds around 25% of live Premier League rights, generating between 10% and 20% of revenues, but has acquired all live rights to Champions League football from next season.
"BT may also have incentives to limit distribution of its key sports content. But given the amount of content rights it currently holds and its market position, it is less clear that limiting distribution of its sports channels would harm competition. Ofcom is seeking views on this assessment."
The consultation is open to stakeholders until 27th February 2015.