Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
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bidders. Our view is that the risk of a wholesale must-offer remedy (set on a retailminus
basis) leading to a significant decrease in rights values is low.
Introduction
10.6 The analysis in this section and other parts of this document, in particular sections 8
and 9, represents an impact assessment as defined in s7 CA03.
10.7 Impact assessments provide a valuable way of assessing different options for
regulation and showing why the preferred option was chosen. They form part of best
practice policy-making. This is reflected in s7 CA03, and means that generally we
have to carry out impact assessments where our proposals would be likely to have a
significant effect on businesses or the general public, or when there is a major
change in our activities. However, as a matter of policy we are committed to carrying
out and publishing impact assessments in relation to the great majority of our policy
decisions. For further information about our approach to impact assessments, please
refer to our guidelines 558 .
10.8 The purpose of this impact assessment is to determine whether it would be
proportionate, by reference to the purpose of s316 and in light of our other duties
under CA03, to impose a wholesale must-offer remedy in the form described in
sections 8 and 9.
10.9 In carrying out this impact assessment, we have drawn on the impact assessment
which we set out in our Second Pay TV Consultation. That impact assessment was
however largely qualitative, since our thinking had not progressed sufficiently to
make quantitative analysis meaningful. We are now able to set out the likely impact
of a wholesale must-offer remedy at the prices which we set out for consultation in
section 9, and taking into account various assumptions related to the pricing analysis,
including the costs associated with market entry by new providers, and the
associated market expansion effects.
10.10 The analysis presented here sets out our qualitative assessment of the full effects of
a wholesale must-offer remedy, together with an estimate of those static effects
which we consider can be quantified with at least a degree of accuracy. We stress
that the quantitative analysis is only a part of our assessment: many of the effects
that we have identified are not quantifiable even indicatively with any certainty. In
those circumstances, quantification can be misleading and unhelpful.
Responses to our Second Pay TV Consultation
10.11 In our Second Pay TV Consultation, our view was that facilitating wholesale access
to Core Premium content would have a positive impact for consumers, because it
should allow additional innovative retailers and platforms to emerge, making use of
Core Premium content. We said such intervention should also increase the level of
choice for consumers, because Core Premium content would be available via a
number of different retailers and platforms.
558 http://www.ofcom.org.uk/consult/policy_making/guidelines.pdf.