BskyB unhappy with Ofcom's suggestion

Here are some key phrases used by BskyB in its response to Ofcom’s consultation on the UK Pay TV Market

“…it [Ofcom] is proposing the imposition of radical and highly interventionist regulation of a sort unseen in any developed market economy.”

“…the damaging effects on investment incentives that would result
from the confiscatory nature of Ofcom’s proposals,…”

“…- compulsory supply - would require Sky to license the intellectual property in its channels to third party retailers. This is one of the most Draconian remedies available to a competition authority. Moreover, this proposal is accompanied by proposals for detailed ex ante regulation, including price control,…”

“…Ofcom’s proposed intervention seeks effectively to impose on Sky an obligation to subsidise other market players, by forcing Sky to reduce its wholesale prices to “support entry into the market by new retailers”.”

“…to eliminate any risk of excess profitability in Sky’s premium sports and movies channel supply business, it would impose cost-plus based price controls.”

“Ofcom’s proposed intervention could, for example, reduce incentives to invest on the part of Sky and other operators, and diminish innovation levels,…”

“It is noteworthy that the European Commission’s intervention in the sale of
rights to broadcast Premier League football resulted in consumers who wish to view all live matches broadcast having to pay more than they were prior to the intervention.”

BskyB’s response is 140 pages long and it goes on in a consistent vain. I have a lot of sympathy with Sky’s argument. However, when BT was forced to open up the local access to Sky I didn’t hear any objections. BT is forced to sell its Broadband services to BskyB (and others) at wholesale prices that are then marked up and sell on to consumers.

This was imposed by the same regulator and the difference was that sky benefited from similar measures imposed in one area but cries “Fowl” when pointed at them.

Their argument holds some truths such as …BT is now reluctant to invest in fibre to the home as BT would probably have to allow competitors to have access and would not make the return on the investment that balanced the risk.