BSkyB deal with OFT wins mixed response

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The Independent Online
The UK cable industry yesterday gave a mixed and at times angry response to new undertakings between BSkyB and the OFT over the supply of pay-television programming to cable operators.

As revealed in the Independent, the OFT yesterday confirmed it will impose new conditions on the pay-television giant, including the obligation that it unbundle its channel offerings to cable companies and that any channels supplied need only go to 80 per cent of customers, rather than 100 per cent. The OFT has also insisted that BSkyB produce a rate card for its video encryption service, ensuring fair and open access for all broadcasters.

In return, the company, 40 per cent-owned by Rupert Murdoch, has avoided a reference to the Monopolies and Merers Commission. In announcing the changes, which followed a six-month inquiry, OFT director general John Bridgeman said that "although BSkyB is not acting anti-competitively the competitive process is being impaired".

BSkyB hailed the announcement as vindication of its approach to the cable television marketplace. "We are grateful to have had the opportunity to put the record straight on a number of pre-conceptions about BSkyB's behaviour," Sam Chisholm, chief executive, said yesterday. "We are happy to give undertakings which give reassurance that these pre-conceptions are not backed up by any intent on BSkyB's part."

A new rate card will be produced by BSkyB in coming weeks, which will be circulated to cable operators for consideration.

The changes will allow cable operators to repackage channels in response to consumer demand, and to allow customers to select fewer channels.

"This is very much a step forward," a source at Videotron, a leading cable operator, said yesterday. "The undertakings show that the OFT has begun to understand the problems in the market."

But Bell Cablemedia, one of the companies leading the complaints against BSkyB, said it was disappointed the satellite broadcaster had been permitted to "demand that cable deliver any basic channel taken to 80 per cent of its customer base, irrespective of customer choice". Another cable operator said: "This is a whitewash, and the OFT has just passed the buck."

The OFT said that BSkyB's control of satellite transponder capacity in the UK was a matter for European regulators, while its exclusive deals with the Premier League would be looked at by the Restrictive Practices Court. It added that it would keep a watching brief on BSkyB.

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