UK competition authorities yesterday struck at one of Rupert Murdoch's most lucrative operations, vowing a wide-ranging inquiry into the activities of the satellite broadcaster BSkyB.
The move by the Office of Fair Trading was heralded by smaller cable companies, which have led a loud public campaign aimed at convincing regulators in the UK and in Brussels to rein in BSkyB, the nation's most profitable television broadcaster, and 40 per cent owned by Mr Murdoch's News Corporation. At stake are BSkyB's supply arrangements with the cable industry, under which 28 TV channels, including Sky Sports and Sky Movies, are distributed wholesale at prices set by BSkyB. Small cable operators complain that the company's near-monopoly on film and sport for pay-TV, as well as its control of conditional access technology used to scramble and unscramble television signals, constitute an abuse of a dominant position.
BSkyB chief executive Sam Chisholm promised full co-operation with the inquiry, but sharply criticised the complaining operators, suggesting they were using the regulatory process to further their business, rather than competing in the market place. The OFT said yesterday that it would also look at BSkyB's exclusive deals to broadcast sport, to determine whether they should be referred to the Restrictive Practices Court. Under an agreement with the Premier League, BSkyB has the right to match any price for television rights offered by competitors.
The Premier League has received legal advice that the clause is not enforceable. BSkyB countered that the clause was introduced at the request of the Premier League when the current pounds 304m contract, due to expire in 1997, was signed three- and-a-half years ago.
Sky wars, page 20Reuse content