Concerns raised over U.K. pay TV


LONDON -- Media regulator Ofcom said on Tuesday it has concerns about competition in the pay TV industry and whether firms such as BSkyB have the incentive to make premium content such as sports available to other operators.

Ofcom launched an investigation in March, after rivals of dominant pay TV firm BSkyB accused it of trying to suppress competition.

Cable operator Virgin Media, BT Group, Irish broadcaster Setanta, and Freeview pay service Top Up TV say competition in the pay TV industry is not working effectively.

They say BSkyB can afford to acquire the best content such as soccer and movie rights due to the number of customers it has and then use that content to attract more subscribers. It can then decide which third parties it sells on to.

They are calling for fair access by third-party pay TV retailers to Sky's premium channels on economically viable terms.

In response to the initial complaints, BSkyB has previously said there is no evidence to substantiate the claims and argues that they also face competition from free-to-air TV such as the BBC.

Ofcom, which has carried out an initial assessment, said it had concerns over whether firms are able to compete effectively at the wholesale level for premium content.

It also questioned the enforcement of the buy-through model, which requires customers to purchase a basic TV package before they are allowed to buy a premium service.

BSkyB is currently facing three separate regulatory probes, including one looking at its purchase of a 17.9% stake in broadcaster ITV. Analysts have said the pay TV investigation could be the most damaging to its business model.