Ofcom has barred Sky from using a clause in its wholesale contract with Top Up TV that would have restricted the range of set-top boxes used by the pay-TV operator for distributing Sky Sports.
Following the ruling by the regulator, designed to open up the market for pay-TV sport issued as part of its Pay-TV Review in March, Top Up TV, BT Vision and Virgin Media were each obliged to enter into contract negotiations over the carriage of the two premium channels, Sky Sports 1 and Sky Sports 2.
Sky had objected to Top Up TV’s proposals to launch a new basic set-top box that would have enabled reception of DTT channels, including the Freeview line-up and Top Up’s other linear channels such as ESPN, but not the premium content that is normally downloaded to PVRs.
This had the potential to restrict the market to existing customers or those willing to purchase a more expensive PVR.
After discussions with both BSkyB and Top Up TV the regulator ordered that the clause be removed.
“We’re very happy that restriction has been lifted and this will enable us to sell Sky Sports 1 and 2 to customers who frankly only want and only need a simple set-top box,” Top Up TV chairman David Chance told Broadband TV News, pointing to Ofcom estimates that 1.8 million people currently receiving DTT would be interested in pay-TV sport.
A Sky spokesman said it did not agree with the Ofcom ruling and intended to appeal. “This confusion is a consequence of Ofcom’s muddled interpretation of its own ruling. Our contract with Top Up TV was consistent with our understanding of Ofcom’s original view that the obligation to supply should not apply when a distributor was simply looking to re-sell Sky Sports 1 and 2 on devices which wouldn’t offer a broader range of services. Such simple re-selling would do nothing to support Ofcom’s claimed objective of promoting innovation. We do not agree with Ofcom’s decision and we intend to exercise our right of appeal.”
The interpretation of the Ofcom rules seems to rest on the amount on what constitutes innovation, and whether the availability of a small pack of linear channels is sufficient to meet Ofcom’s wish that providers do not simply resell the premium channels.
Top Up TV is offering subscribers a bundle of the two Sky Sports channels and ESPN for a monthly £39.99.
