Virgin Media has launched an appeal against Ofcom’s wholesale must offer obligation, arguing that the regulator did not consider all of the appropriate facts.
In papers lodged with the Competition Appeal Tribunal the cableco argues that Ofcom was wrong in not including any provision for Sky Sports 3 and 4 or on any of the Sky Movies channels.
Virgin also argues that the methodology adopted by Ofcom to calculate the maximum prices for the supply of Sky Sports 1 and Sky Sports 2 was flawed. It says Ofcom has made an error in the mechanism that applies to calculate the maximum prices under the WMO obligation following changes in Sky’s own retail prices.
Under Ofcom’s WMO, the regulator has 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 has been reduced by 10.5% to £17.14.
Ofcom’s ruling was partially imposed in April after Sky agreed that Virgin, BT and Top Up TV – three of the four complainants that led to the original pay-TV review – should pay the ratecard price for Sky Sports and/or Sky Sports 2. The difference between that and the relevant WMO price would be held in an escrow account. At the end of the appeal CAT will determine how the monies held in escrow should be distributed.
Subsequently, and showing how two platforms can be both friend and foe, Sky agreed to acquire the VMtv channels business and entered into a new carriage deal for its basic channels and the HD versions of Sky Sports.