BSkyB wins battle on regulation of sports channels

BSkyB has claimed victory in its battle with regulator Ofcom after the latter’s imposition of wholesale must-carry obligations on the pay TV operator’s sports channels was overturned by the UK’s Competition Appeals Tribunal.

The CAT decision follows a two-year long legal challenge against Ofcom’s ruling that the wholesale supply of Sky Sports 1 and 2 to BSkyB’s competitors should be regulated.

According to the tribunal, Ofcom’s concerns that the way Sky sold its channels had a detrimental effect on competition were unfounded. The CAT ruled that Ofcom had misinterpreted the evidence of Sky’s negotiations. However, the tribunal did find that Ofcom was within its powers to regulate the price of the channels, something Sky had contested.

“We welcome the CAT’s confirmation that Ofcom’s competition concerns in relation to the wholesale supply of Sky Sports are unfounded and that, contrary to Ofcom’s analysis, the evidence shows that Sky has engaged constructively with other distributors over the supply of its premium channels.  This finding supports the argument that Sky has been making consistently over the last five years,” said Sky in a statement. “We also welcome the CAT’s conclusion that the existing commercial terms of supply, particularly in relation to Sky’s wholesale rate card, do not obstruct fair and effective competition in the retailing of Sky Sports across platforms.”

Sky said it currently only had access only to the CAT’s summary of its principal findings and conclusions and would give careful consideration to the full judgment when it was made available.

Ofcom said it was “surprised and disappointed” with the decision.