Cable firms take BSkyB dispute to DTI

UK cable companies have asked the Department of Trade and Industry to investigate the allegedly anti-competitive practices of BSkyB, the cable and satellite broadcaster owned 40 per cent by Rupert Murdoch's News Corp.

The move marks a fresh attack on what the cable companies see as BSkyB's abuse of its dominant position in the supply of pay-TV programming in the UK. A DTI spokesman said: "I can confirm that we have received representations from the cable companies. We are considering their request." He declined to elaborate.

The action follows two attempts by a group of smaller cable operators, led by Inter- national CableTel, to convince regulators to rein in BSkyB. The first, a formal complaint, was lodged with the Office of Fair Trading early this year. A similar request was later sent to the Competition Directorate in Brussels.

One industry source said: "This is a further fruitless attempt by the cable companies to monopolise the British communications industry by regulation rather than by initiative."

The cable operators believe BSkyB is guilty of anti-competitive behaviour in three areas: its control of the con- ditional access technology used to scramble and unscramble video signals; its dominance of capacity on the Astra satellite; and long-term supply contracts with programme suppliers, particularly Hollywood studios.

More particularly, they have complained about the rate card used to establish the prices of BSkyB programming broadcast on cable. Most of BSkyB's programming is available both on satellite and cable, with cable operators paying a premium. They argue that BSkyB has an effective monopoly on sports and film, the only programming that, in effect, drives the growth of pay-TV.

In addition, criticisms have been made about controversial contracts reached by BSkyB with the two biggest cable operators, Telewest and Nynex CableComms. Under these contracts, now being renegotiated at the request of the OFT, cable operators are allowed to buy Sky programming a la carte, rather than in bundles.

The contracts, signed in May, contained clauses restraining the cable operators from developing pay-per-view services in competition with BSkyB, and led to the dismantling of a cable committee established to develop such services.

The contracts, which the OFT found contained anti-competitive elements, are still under review, but the watchdog formally approved a revised version of the rate card last month over the objections of some cable companies.

In the latest action by the cable operators, the DTI is being asked to force further changes to the rate card, or to refer BSkyB to the Restrictive Practices Court. The cable companies are believed to be hoping that inaction from the DTI would spark a renewal of interest by the European Commission in BSkyB's practices.To date, the Commission has made it clear it views the squabble between BSkyB and the cable operators as a domestic issue.