BSkyB's plan to launch pay-TV channels on the UK's digital terrestrial platform—announced last week on the day that Virgin Media launched its quad-play proposition—will require media regulator Ofcom to conduct a consultation looking at three key issues.
Ofcom said while no request to change licences held by Sky and National Grid Wireless, the transmission group which currently carries Sky's three channels on Freeview, had been received, discussions between Ofcom and Sky had identified the need to consult on Sky's plans to launch a new DTT set-top box using the MPEG4 compression standard; the impact of the loss of Sky's three channels on Freeview; and whether new licence conditions were needed to ensure fair competition.
Ofcom said its consultation on Sky's MPEG4 move would need to assess:
- The potential benefit of a rapid migration from the current MPEG2 standard to MPEG4 "which will ultimately increase the number of channels available on digital terrestrial television"
- The potential detriment associated with a reduction in the number of channels received by existing set-top boxes or digital televisions
- The risk that existing set-top boxes or digital televisions might be incompatible with multiplexes broadcast using a combination of MPEG2 and MPEG4 coding
- The overall effect on consumer confidence in the digital switchover process.
Sky said it planned to remove Sky News, Sky Sports News and Sky Three from Freeview and use the capacity to broadcast four subscription channels offering movies, entertainment and live Premiership football. Ofcom said it would need to consult on whether the loss of the free-to-air channels "would be compensated for by the proposed introduction of the new pay television channels".
Ofcom said the consultation would likely take 10 weeks after a request for approval had been received.
Meanwhile, Sky and Virgin Media's war of words stepped up this week after Sky placed ads in its channels calling on Virgin Media subscribers to complain that basic channels such as Sky One and Sky News could be removed from the cable platform. Sky wants Virgin Media to pay more for its basic channels, and has threatened to take them off cable if it is unable to agree a higher price.
Lovelace Consulting | 16.02.2007