Pay TV phase three document - Stakeholders - Ofcom

(4) In this section—
Pay TV phase three document – non-confidential version
“connected services”, in relation to licensed services, means the
provision of programmes for inclusion in licensed services and any
other services provided for purposes connected with, or with the
provision of, licensed services; and
“licensed service” means a service licensed by a Broadcasting Act
licence.”
2.11 Under s316 Ofcom has the power, acting as sectoral regulator, to ensure fair and
effective competition in relation to the provision of licensed services 9 . When
analysing competition concerns within the context of s316, we therefore consider
whether those concerns create a risk that fair and effective competition is not
occurring, and will not occur. If that is the case, then we consider what conditions (if
any) it may be appropriate to insert into licences to make certain of providing for fair
and effective competition against that risk. That may involve, consistent with our
principal duty under s3(1)(b), intervening, in the interests of consumers, on an ex
ante basis to promote competition.
2.12 In section 8 of the Second Pay TV Consultation we set out an explanation of our
s316 powers. We explained that Sky holds television licensable content service
licences under the Broadcasting Act 1990 for its premium sports and movie
channels. These channels are therefore “licensed services” for the purpose of s316.
Ofcom therefore has the power to include conditions in the licences for those
services that we consider appropriate for ensuring fair and effective competition in
the provision of those channels, and any services provided for purposes connected
with the provision of those channels. We explained that we considered there is a risk
that fair and effective competition in the provision of the licensed services is not and
will not occur in respect of Sky’s wholesaling of channels subject to broadcasting
licences. We considered it may therefore be appropriate to intervene in the wholesale
of Core Premium channels to ensure fair and effective competition is occurring and
will occur. We therefore proposed to consider further the imposition of a licence
condition to ensure fair and effective competition in the form of a wholesale mustoffer
obligation.
2.13 We now set out below the framework for our analysis under s316 in this document:
� In section 3 we set out some of the background context to our assessment of the
sector, which highlights again the importance to pay TV markets of licensed
channels which include premium content.
� In section 4 we define the markets that are relevant to our consideration of
whether there is a risk that fair and effective competition in the provision of
licensed channels including premium content is not occurring and will not occur.
� In section 5 we consider whether Sky holds a degree of market power in those
markets such that it has the ability to act in a manner which is inconsistent with
the conditions for ensuring fair and effective competition. We reach the view that
Sky does hold that market power in relation to the supply of Core Premium
channels.
9 Or connected services
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