Ofcom consults on the replacement of Sky free channels with pay services

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Ofcom is consulting the public on a proposal from British Sky Broadcasting Ltd (Sky) and National Grid Wireless Ltd (NGW) to replace Sky’s free-to-air channels with pay TV services on the digital terrestrial television (DTT) platform.
Sky currently provides Sky News, Sky Sports News and Sky Three on the DTT platform on a free-to-air basis. Under the proposal, these channels would be replaced with Sky Sports 1 and, in the evening, Sky One (including an hour of Sky News content) and Sky Movies SD1. Sky would use the remainder of its capacity to retail two further channels from third party providers in the daytime: a factual channel and a children’s channel.

Ofcom is considering how it can best ensure fair and effective competition for the benefit of consumers in the light of the development of the DTT platform, Sky’s strong market position in pay TV and the specific aspects of the proposal. The Sky/NGW proposal would increase the choice and availability of retail pay TV services on the DTT platform. Consumers would be presented with an increase in choice of sports, movies, factual, children’s and general entertainment programming. However, it would also have an impact on competition for pay TV services on DTT and possibly across other digital TV platforms. For example, if as a result of Sky’s position in the wholesale provision of sports and movies channels, Sky were to emerge as the main retailer of pay TV services not only on the satellite platform but also on DTT, other providers of pay TV services may find it more difficult to enter the market. This may not be in the long term interest of consumers.

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