Oftel turns its fire on BSkyB cable terms
Saturday 23 March 1996
In a 60-page submission to the Office of Fair Trading, which is investigating Mr Murdoch's BSkyB, Mr Cruickshank's Oftel has lashed out at the terms on which the satellite broadcaster makes its pay-TV programmes - including the popular Sky sport and film channels - available to cable companies.
The intervention by Oftel, the telecommunications regulator, will increase tension with the Independent Television Commission, the television watchdog. But Oftel argues that it has a right to be concerned over the future of the cable industry, which is the major competitor to BT in local telephone services.
BSkyB currently dictates the terms on which it makes its channels available to the cable industry. Specifically, operators can only receive significant discounts on programming if they accept "bundles" of channels. The price is fixed as a percentage of the retail price which BSkyB charges its direct- to-home satellite subscribers.
Oftel regards both practices as unacceptable and anti-competitive. Mr Cruickshank is thought to be adamant that all BSKyB programming be unbundled, giving cable operators freedom to pick and choose among them.
Oftel also calls for non-discriminatory pricing, based on clear, separate accounts for the various parts of BSkyB's businesses. This reflects the approach used by Mr Cruickshank in his dealings with BT. The Oftel submission says that accounting separation is a key safeguard against abuse, and should be a central part of any undertakings.
"There are good grounds for considering that [BSkyB's] pricing and other practices are tending to hold back the development of the cable companies and therefore are threatening the prospects for competition in pay-TV in both the short and the long term."
Oftel's chief concern is that this will in turn hold back the cable industry's ability to market its cable services and thereby reduce its attractiveness to potential telephone customers.
Cable operators could find themselves "between a rock and a hard place", with Sky on one side and BT on the other.
The ITC is believed to be wary of Oftel's intervention, and sees the submission as an attempt to poach its territory. Under the current regime, the ITC and Oftel are meant co-operate in key areas, including conditional access, the technical term for the scrambling and unscrambling of TV signals used by pay-TV broadcasters.
But it is increasingly obvious that the ITC regards Oftel as a rival rather than a partner in overseeing a rapidly evolving industry, where the old distinctions between broadcasting and telephony are becoming blurred.
Oftel's submission is one of 30 received by the OFT, whose director-general, John Bridgeman, launched the inquiry earlier this year. Its conclusions are expected by the end of June. It may recommendation a reference to the Monopolies and Mergers Commission, but the ultimate decision lies with ministers. It is not yet clear whether the OFT views the pay-TV market as separate from the overall broadcasting market, a distinction that could dictate the outcome of the inquiry.
Comment, page 23
- 1 Cyclist in Russia narrowly misses being hit by car and lorry
- 2 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 3 What are your fingerprint words?
- 5 Pink Floyd new album: Band unveil cover art for first record in 20 years
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Slough train station deaths: Woman and child killed after being 'pushed in front of train'
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Jennifer Lawrence: Leaked 4Chan sex video branded 'fake' by users
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
Labour Party conference: Ed Balls to set out plan to freeze child benefit to balance books
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...