Ball in Ofcom’s court as CAT rules against Sky on wholesale must offer

After four years of litigation, the UK Competition Appeals Tribunal (CAT) has ruled that BSkyB must make its sports channels available to BT on a wholesale basis.

The CAT, making an about turn on its original 2012 ruling on the case, said that Sky must make its Sky Sports 1 and 2 premium services available to BT for its YouView service.

The case dates back to 2010, when media regulator Ofcom ruled that Sky must make the channels available to rivals at a regulated price – known as the ‘wholesale must offer’ because it held a dominant position in the market.

Sky challenged Ofcom’s right to rule on the matter with the CAT, which found in its favour and dismissed Ofcom’s argument that it had the right to regulate the wholesale price as unfounded.

The latest twist in the long-running story came about after the Court of Appeal ruled that the CAT’s original finding – that the wholesale must offer should not stand – was based on errors of law and failed properly to consider Ofcom’s findings that there was ineffective competition in the market. Sky lodged an appeal against this judgement to the Supreme Court, which was rejected.

While BT welcomed the ruling and said that the sports channels would be made available via its YouView service, Sky said the decision was an “interim” one and that it would continue to fight against wholesale must offer.

BT rival TalkTalk already offers a full suite of Sky Sports channels on its version of the YouView service, and the ruling will have no impact on the operator, which concluded a three-year wholesale deal with Sky in July.

Ofcom, which originally ruled that Sky must make the channels available, welcomed the ruling, which it said also gives it a green light to move ahead with a review of the ‘wholesale must offer’ remedy. However, the regulator said it would publish a consultation in the coming months that will take into account the ways in which the pay TV market has developed since its original decision in March 2010. Since that time, BT has itself invested heavily in sports rights and has emerged as a serious competitor to Sky in this area.

“After more than four years of litigation and legal challenges, Ofcom’s 2010 pay TV decision continues to serve the interests of UK consumers and this ruling is consistent with our original decision,” said CEO Ed Richards.

“Today’s ruling paves the way for more top sports to be available on another TV service and supports competition and innovation in the communications sector as we originally intended. Ofcom is now focused on reviewing the ‘wholesale must offer’ remedy in light of developments in pay TV.”