Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
Regulatory gaming
6.70 Sky told us that we had ignored the possibility that new entrants were engaged in
regulatory gaming. [ � ] 387 . Sky said its view that BT was trying to game the
regulator was evidenced by [ � ] 388 .
6.71 We recognise that the prospect of regulatory intervention by Ofcom could have the
potential to influence commercial negotiations between parties such as Sky and BT.
We have carried out an extensive examination of correspondence between Sky and
others, and of internal documents, in order to assess incentives of both sides of
these negotiations. However we note that:
196
� [ � ] 389 .
� [ � ].
� [ � ] 390 .
� [ � ].
� [ � ].
6.72 We consider that, while it is possible that BT had regard to a possible regulatory
outcome in negotiating with Sky (see, for example, paragraph 6.36 above), we have
no basis for believing that this was the reason for the failure of these negotiations.
6.73 Sky’s claim of regulatory gaming mentions only BT. It does not mention the
negotiations with others which also failed to reach an agreement for wholesale
supply. We have also reviewed documents relating to negotiations between these
other parties and Sky. Our view is that these documents do not support the notion
that the failure to reach agreement was ultimately due to regulatory gaming on the
part of any of these firms.
Practical considerations
6.74 Sky also argued that there were a number of practical reasons for its non-supply of
premium channels to third parties.
6.75 It said that other than Tiscali, which carries Core Premium Sky channels, no IPTV
platform currently in existence was capable of delivering linear channels. In
particular, neither BT nor Orange had launched an IPTV network with this capability.
As such, there was “no commercial urgency to reach agreement as none of the new
entrants currently have any means by which to distribute Sky’s channels”. 391
387 Sky response, section 5, paragraph 2.37
388 Sky response, section 5, paragraph 2.38
389 BT response dated 9 Apr 2009 to Ofcom information request dated 20 Mar 2009
390 Evidenced by a note from BT of a meeting on 8 th January 2008.
391 Sky response, Section 5, paragraph 2.39.