BSkyB has won its appeal over the amount it can charge rival platforms for two of its premium sports channels in a ruling by the Competition Appeal Tribunal.
The dispute related to the March 2010 order by Ofcom. The regulator set a wholesale price of £10.63 (€11.90) per subscriber per month when sold on a standalone basis. This would reduce the price by 23.4% below the current wholesale price to cable operators. The bundle of Sky Sports 1 and 2 favoured by the majority of customers was reduced by 10.5% to £17.14. The intervention followed a three-year review into the pay-TV market after complaints from Virgin Media, BT and Setanta Sports.
Monies received under the new regime were paid into escrow and BSkyB launched a series of appeals.
The Tribunal said it had examined the evidence in great detail and concluded Ofcom’s core competition concern that Sky had deliberately withheld from other retailers the supply of its premium channels to be unfounded.
“Ofcom has attributed responsibility for the failure to reach agreement largely to Sky’s failure to engage constructively with its counterparties,” it said in its judgment. “However the evidence shows that Sky did, on the whole, engage constructively. On the other hand its counterparties by no means always did so, and in our view regulatory gaming on the part of some of Sky’s counterparties played a much more important role in the commercial negotiations and their progress (or lack of it) than Ofcom has recognized”.
BSkyB was pleased with the ruling, though said it would give full consideration to the full judgment when made available. “We welcome the CAT’s confirmation that Ofcom’s competition concerns in relation to the wholesale supply of Sky Sports are unfounded and that, contrary to Ofcom’s analysis, the evidence shows that Sky has engaged constructively with other distributors over the supply of its premium channels.”
Ofcom said in a statement: “We are very surprised and disappointed with today’s decision by the Competition Appeal Tribunal, which we believe is contrary to the evidence and not in the interests of consumers. In a separate investigation, the Competition Commission also very recently concluded that competition in the pay-TV market is not effective. We will therefore immediately consider what further steps we should take to ensure there is effective competition in the pay-TV sector, in line with our duties.”
Rivals including cable operator Virgin Media were not satisfied either. A Virgin Media spokesperson said: “It’s simply not credible that the Competition Appeal Tribunal has concluded there are no problems in a market which Ofcom spent three years investigating and which the Competition Commission as recently as last week concluded is not working in the interests of consumers. They have not even acknowledged the importance of increased choice and availability so, after many years of exhaustive investigations, TV viewers continue to lose out. We await the full judgment and will pursue all available options to get a better deal for consumers.”