The UK communications-regulator Ofcom today launched a consultation that could force Sky to make its premium content available to rival operators at regulated prices.
The consultation follows complaints from BT, Setanta, Top Up TV and Virgin Media in early 2007, a quartet who argues that Sky's dominance in Premier League football and premiere movies leaves them unable to compete.
In response, Ofcom now states that it is "consulting on its view that BSkyB has market power in the wholesale supply of this content", adding that Sky could be limiting the distribution of this content as a means to hamper the growth of its competitors.
There's no shortage of rival complaints in regards to Sky's wholesale prices, and the whole Virgin and Sky One debacle recently received huge media attention. But what is Ofcom willing to do about it? Well, its proposal is to require Sky to make its premium content available to its rivals at regulated wholesale prices.
That, in theory, could make premium material such as Sky Sports and Sky Movies available to Virgin Media, BT Vision and Freeview at cheaper prices. The thought of Freeview with an add-on Sky Sports package will have widespread appeal to every footy fan.
Ofcom states that "markets where competition is weak do not deliver the best outcomes for consumers", and adds that "consumers on a number of platforms are currently unable to access the most valuable sport and movie content".
Sky, of course, won't appreciate Ofcom's consultation plans. Having spent millions in securing the rights to the aforementioned material, it will argue that it should now be able to reap the benefits - albeit at the expense of its rivals, and possibly the consumer.
Ofcom outlines a 10-week period for its consultation, and a closing date of December 9th 2008. We'll be watching closely as regulated Sky wholesale prices could shake-up the broadcasting industry and pave the way for cheaper premium-TV packages.
Official press release: Ofcom consults on proposals to increase access by consumers to premium Pay TV content - live Premier League football and Hollywood movies
