Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
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advance action or action in a short time frame is required to ensure effective
competition …
Our policy is to carry over the safeguards that the ITC and the Radio
Authority have had to guarantee that Ofcom has that same flexibility to
ensure fair and effective competition as the other broadcasting regulators
had pre-Ofcom” 10 .
2.22 Sections 316 to 318 therefore create a sector-specific competition regime established
precisely because Parliament was not satisfied that the CA98 prohibitions would be
sufficient to enable Ofcom to protect the interests of consumers in these markets. In
2006 a joint DTI/Treasury report entitled “Concurrent Competition Powers in Sectoral
Regulation” asked the question “why do the Regulators have Concurrent Competition
Powers?”. In response it found 11 :
“Specific sectoral regulatory regimes in relation to competition primarily
reflect the need to actively inject and promote effective competition into the
sector, and to address the risk that businesses in these sectors have
inherited, or by virtue of the nature of the characteristics of the markets
involved, possess either alone or in conjunction with others, “market power”
in the markets in which they operate i.e. the ability to exercise control over
the price and/or output in a particular market, and (if not placed under
additional controls to other undertakings) the opportunity to use it to prevent
the development of effective competition in the market …
sector-specific regulation reflects the fact that there is a role for the sectoral
regulator as the facilitator of market reform, seeking to promote competitive
markets wherever appropriate and acting as the catalyst to produce selfsustaining,
effective, competition. The emphasis here is on ensuring the
appropriate market conditions are present to encourage effective
competition, as opposed to the emphasis of general competition law which
is to prevent anti-competitive conduct. It is for this reason that the
government has implemented sector-specific regimes in sectors whilst
competition was developing.”
2.23 Under s3(1)(b) Ofcom has a principal duty to further the interests of consumers in
relevant markets, where appropriate by promoting competition. The markets which
fall under Ofcom’s jurisdiction include broadcasting markets. Section 316 provides
one means by which Ofcom can discharge its principal duty. Sky’s limited
interpretation of the purpose and scope of s316 would be inconsistent with our
principal duty.
2.24 It should be noted in contrast that Ofcom’s s3 CA03 duties are specifically not
applied in respect of Ofcom’s competition functions under CA98 and EA02. As
discussed below, the Communications Act therefore provides for a clear separation
between Ofcom’s role as a competition authority and its role as a sectoral regulator.
It would be contrary to this structure for Ofcom to regard its powers under sectoral
regulation as being limited by the content of the CA98 and EA02.
10 House Of Commons Committee Stage (28 January 2003) Dr Kim Howells - Column 755
11 http://www.berr.gov.uk/files/file29454.pdf, (Paragraphs 2.20 and 2.26)