Report: Sky wholesaling plan will lead to “Adverse effects”

BSkyB has stepped up its campaign against Ofcom’s proposals on the wholesaling of its premium channels. The satcaster has released an ‘independent’ report that predicts “adverse effects” if the planned ratecard is implemented.

The report’s author is Professor Martin Cave, professor and director of the Centre for Management under Regulation at Warwick Business School at the University of Warwick. He is a former member of the Competition Commission and advised the director general of Fair Trading on Sky’s rate card for the supply of its TV channels in 1998.

“The regulator is…explicitly designing its intervention with a view to a particular market structure, rather than creating an environment in which a competitive process can better operate,” says Professor Cave. “This is particularly hazardous in a marketplace characterised by fast and unpredictable technical progress and a variety of existing and emerging means of meeting such demands for video.”

Professor Cave says that new competitors face a dependency on the regulator. He adds that by forcing Sky to share technology and services such as HD with its competitors, the incentive to bring them to the market is significantly reduced.