Murdoch's hold over pay TV under attack

Furious UK cable companies have complained to the Office of Fair Trading and competition authorities in Brussels over Rupert Murdoch's control of the pay TV market in Britain.

A formal complaint has been launched with the European Commission asking that agreements signed between BSkyB, the satellite and cable broadcaster 40 per cent owned by Mr Murdoch's News Corp, and two UK cable companies be overturned on the grounds that they restrain trade.

The OFT has also been asked to look at the contracts, and has formally requested copies from Nynex CableComms and TeleWest, two large cable companies.

Mr Murdoch's pay TV woes came to a head just as he confirmed to an Italian newspaper that he was prepared to buy outright Silvio Berlusconi's three commercial television stations in Italy.

The cable company contracts were signed earlier this month. A copy of the Nynex contract, seen by the Independent, enjoins Nynex from investing in or carrying products that compete directly with Sky programming. In exchange, the company receives advantageous rates for the carriage of Sky's movies, sports and general interest channels.

Sky's rates and programming packages for cable companies were the subject of an informal undertaking from BSkyB earlier this year, following complaints from the cable industry. The OFT and BSkyB agreed that cable companies could buy Sky services a la carte, and that a standard rate card would be established. BSkyB offered to provide programming at a discount for companies willing to sign a fixed-price agreement.

CableTel is leading the battle against BSkyB. Its chief operating officer, Steven Wagner, said yesterday that "companies operating without a fixed contract are facing large increases" in the amount they must pay BSkyB for programming. Mr Wagner said his costs would rise 20 per cent, which he would have to pass on to customers.

Several other cable companies are supporting CableTel's complaint. They argue that BSkyB's control over encryption technology, by which television signals are scrambled and unscrambled, gives it a gatekeeper role in pay TV. In addition, they complain that Mr Murdoch's arrangements with Astra, the satellite company, restrict access to the UK market for other players. Finally, they believe Mr Murdoch has secured key programming rights at high prices, limiting the amount of non-Sky broadcasts available to the cable industry.

In an effort to build alternative sources of programming, several cable companies, including CableTel, Nynex and TeleWest, together secured rights to various programmes. Some were sold to Mirror Group when it decided to launch LiveTV. The remainder of rights have been retained by a joint venture established by the consortium of cable companies.

Earlier this week, Nynex refused to continue to finance the alternative package beyond 31 May. TeleWest said it would consider extending its funding role only if the cable companies brought in BSkyB as a partner.

Meanwhile, Mr Murdoch's intentions toward Mr Berlusconi's TV empire became clearer yesterday. He told the Turin daily La Stampa that as far as he was concerned Mr Berlusconi had already decided to sell everything. Mr Murdoch was interested in buying as many television stations as he could get hold of, or failing that a share in the business as a whole.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?