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November 19, 2015

Ofcom draws BT ire over cutting Sky Pay-TV regulation

News: The battle between BT and Sky shifts to the Pay-TV arena.

By Alexander Sword

Ofcom has removed the obligation for Sky to provide Sky Sports 1 and 2 to its competitors on a wholesale basis, in a move that has drawn ire from BT.

The regulator removed the wholesale must-offer (WMO), implemented to prevent Sky from limiting access to its channels and hence the "key sports content" featured on these channels.

In a review of the regulation, Ofcom found that Sky was offering the channels on commercial terms outside of the WMO obligation to other competitors such as TalkTalk and Virgin Media.

Ofcom also concluded that Sky was currently offering the channels at a reasonable price.

However, the regulator said that it would monitor the situation and intervene if necessary.

The issue is something of a battleground for the UK’s two biggest broadband providers, Sky and BT. The only supplier that was receiving the channels under the terms of the WMO was BT.

BT was also the only wholesale buyer of Sky content that raised concerns over the price.

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However, Ofcom noted Sky’s claimed willingness to supply Sky Sports 1 and 2 in exchange for supply of BT’s own sport channel, BT Sport, which BT has invested in heavily in recent years.

Sky said that "as the evidence demonstrates, we are, and have always been, more than happy to make our channels available on other platforms.

However, BT was "disappointed" by the decision and said it was considering "legal options".

"Ofcom has said it is important for Pay TV retailers to have access to key Sky content to be able to compete effectively in this market, and that they want consumers to have access to these channels. We therefore expect Sky to behave appropriately so that we can continue to offer our customers access.

"We still believe that effective remedies are essential to address the failure of competition in the Pay TV market, in which Sky has had around 75% share of retail subscription revenues for more than 10 years."

The decision has opened old wounds for BT, that has long complained over Sky’s dominance in the Pay-TV market.

"We would argue that there are certain parts of the market where there is a dominant player – Pay TV – that does not have the same expectations and restrictions that BT has to work with," said CEO Gavin Patterson in June.

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