Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
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notably BT Vision, Top Up TV and Tiscali, had faced in trying to reach wholesale
agreements with Sky for its pay TV channels. [ � ]” 343 .
6.16 In its response, Virgin Media said that Sky has limited the distribution of those
channels to other retailers (either by refusing to supply the relevant channels or by
supplying them only on uneconomic terms) 344 .
6.17 Virgin Media agreed with Ofcom's pictorial representation of the distribution of Sky's
premium sports and movies channels, and noted that Sky also distributed individual
movies via its PC VoD service, SkyPlayer, as part of its Sky Movies package
(supplied to DSat subscribers only) 345 . Virgin Media also pointed out that we had not
explicitly recognised that Sky had also refused to supply to Virgin Media:
� Sky Sports and Sky Movies on a wholesale basis for Virgin Media's off-net IPTV
service.
� HD and interactive enhanced features related to Sky's premium sports and
movies channels 346 .
Incentives to supply
6.18 Sky asserted that Ofcom’s conclusion appeared to rely almost entirely on its analysis
of Sky’s incentives to (continue to) supply its premium channels to Virgin Media 347 . It
also argued that Ofcom’s focus on Sky’s incentives to supply its premium channels to
Virgin Media, via the construction of hypothetical spreadsheet models, was perverse,
and the conclusion it drew from those models was misguided 348 . Sky suggested that
the prospect of Sky withdrawing its premium channels from Virgin Media was
remote 349 and that Ofcom’s analysis failed to consider real-world facts 350 . Sky pointed
out that it supplied cable operators prior to a regulatory obligation to do so, that it
would be subject to significant regulatory risk if it were to withdraw its premium
channels from Virgin Media without objective justification, and that such withdrawal
would result in immediate commercial loss and adverse publicity 351 .
6.19 Sky also argued that Ofcom should have focussed on Sky’s incentives to supply
retailers on new platforms 352 and that there was no reason to presume that Sky had a
343 [ � ] confidential response, paragraph 6.1 (no non-confidential response supplied).
344 Virgin Media response, paragraph 1.1
345 Virgin Media response, Annex 1, paragraph 15.2.
346 Virgin Media response, Annex 1, section 15.4.
347 Sky response, Section 5, paragraph 2.4.
348 Sky response, Section 5, paragraph 2.5.
349 Sky response, Section 5, paragraph 2.7.
350 Sky response, Section 5, paragraph 2.6.
351 Sky response Section 5, paragraph 2.6.
352 Sky response Section 5, paragraph 2.8.