OFT reviews ’obsolete’ restrictions on BSkyB

The Office of Fair Trading has begun a review of the regulations imposed on BSkyB and is expected to soften its demands on the pay-TV broadcaster.

The Office of Fair Trading has begun a review of the regulations

imposed on BSkyB and is expected to soften its demands on the pay-TV

broadcaster.



The regulations were introduced in 1996 when it was feared BSkyB had an

unfair advantage over the smaller cable companies. But the advent of

digital TV and the speed with which the cable industry has consolidated

means that these fears may no longer apply, making the regulations

obsolete.



In 1996 BSkyB gave three main undertakings to the OFT about its bundling

of channels, its pricing for cable companies, the use of

industry-standard encryption technology for analogue satellite TV and

the separation of accounts between its wholesale and retail

business.



John Bridgeman, the director-general of fair trading, said: ’We have to

be sure that competition is healthy and responsible to developments. Our

approach is from the perspective that regulation should be kept to the

minimum necessary to promote competition.’



The decision to review BSkyB’s position follows the proposed merger

between Carlton and United News & Media. The OFT is holding a statutory

review of the restriction on ITV companies and their share of

advertising revenue. The review is expected to be completed by next

month.



Graham Duff, the managing director of Zenith Media, said: ’Everything

seems to be leading to a reassessment of primary legislation. The whole

shape of UK broadcasting is up for grabs and this is one part of it, and

shouldn’t be viewed in isolation.’



Tony Ball, chief executive of BSkyB, was not available for comment, but

a spokesman for the broadcaster said: ’BSkyB looks forward to

co-operating with the OFT and is hopeful that the review will result in

the removal of outdated rules and unnecessary burdens on BSkyB.’



BSkyB’s digital TV rival, ONdigital, revealed this week that it had

signed up 552,000 subscribers by the end of December, representing an

increase of 34 per cent on sales to the end of September. This compares

with BSkyB’s figures of 811,000 new digital TV subscribers (in addition

to just under a million changing over from the analogue service) in the

12 months to October.



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