Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
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date agreed with Sky precisely in order to allow Sky adequate time to provide a
full response.
� We are aware that conducting a process of this kind in itself imposes a burden on
stakeholders. However, the importance of the issues at stake justifies the
continuance of the investigation, and Sky itself acknowledges that the
investigation must take full account of all available evidence. We have attempted
to minimise the burden associated with gathering such evidence by only
gathering that information which we believe to be necessary to resolve specific
issues, and discussing with stakeholders the least burdensome means of
gathering this evidence.
Relationship to review of Sky’s Picnic proposals
2.58 Our assessment of the proposal from Sky and Arqiva for a new pay TV service on
DTT, to be called ‘Picnic’, has been closely linked to our pay TV market investigation.
In particular, they have both considered the issue of access to premium content.
2.59 In our consultation document entitled “Proposed BSkyB Digital Terrestrial Television
Services”, which we published on 30 September 2008, we consulted on our view that
we should consent to the proposal subject to the following conditions:
� A wholesale must-offer arrangement, under which Sky would be required to
supply its Core Premium channels on a suitable wholesale basis which is
commercially viable, in particular, subject to certain conditions in relation to
wholesale pricing.
� The use of simulcrypt, under which other retailers of pay TV services on DTT,
using different conditional access systems, could access Sky’s Core Premium
channels without needing to transmit the same channels more than once, subject
to suitable security requirements.
� Ancillary conditions, which would focus on our intended outcome for competition
and consumers by ensuring that a wholesale must-offer arrangement is not easily
manipulated to be ineffective, but commercially and technically workable.
2.60 The majority of respondents to that consultation indicated that they agree our
consent to the proposal would need to be subject to regulated wholesale prices for
Sky’s Core Premium channels 19 . Accordingly, we are consulting on a range of
wholesale prices in this consultation, in order to consider the relevant factors, before
we conclude on our assessment of the Picnic proposal.
The potential use of competition powers to investigate allegations regarding
Sky’s conduct
2.61 The Four Parties made a variety of allegations regarding conduct by Sky in their
submission of July 2007.
19 We received 24 responses to our second consultation on Sky’s Picnic proposal, of which six are
confidential in their entirety. We received four responses which contained some confidential material,
but where a non-confidential version was also provided, whilst 14 responses contained no confidential
material. The 18 non-confidential responses are available on our website at:
http://www.ofcom.org.uk/consult/condocs/picnic/responses/.