BSkyB agrees to deal with pay TV rivals

Virgin, Top Up, Telecom to buy soccer channels at a discount

LONDON -- BSkyB has agreed to an interim deal to allow three of its pay TV rivals to pay 20% less for its prized bouquet of Sky Sports soccer channels -- in the latest twist to its battle with antritrust regulators to protect its pricing.

The satcaster has agreed to an out-of-court temporary arrangement with media regulator Ofcom that will allow Virgin Media, Top Up TV and British Telecom to buy the channels at a discount until the full legal appeal is concluded, which is expected in the second half of the year.

BSkyB and Ofcom have been presenting their case in court this week, but have bailed out of the process in favor of a temporary settlement. In March, the satcaster will still bring a full legal appeal to the Ofcom ruling, which said it must slash the costs of its sports channels so that other platforms are not effectively locked out of the premium sports market.

The 20% discount will not be extended to any other digital platforms pending the court's final judgement. The three pay TV rivals will also have to put cash amounting to the 20% discount in an escrow account that would be payable to Sky if its appeal proves successful.

"We are pleased to have been able to put forward an agreement which provides substantial protection against the short-term impacts of Ofcom's decision," a Sky spokesman said.

"We remain fully focused on our substantive appeal, which will be filed with the Competition Appeals Tribunal in due course."