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Ofcom reviews rules on Sky rivals' access to Sky Sports 1 and 2

Tuesday, July 28th 2015 by Phil Wilkinson-Jones

Ofcom is reviewing the rules that allow pay TV providers other than Sky to broadcast popular channels Sky Sports 1 and 2.

The two channels are available to other retailers on a wholesale basis – but only on the condition that Sky has similar access to its rivals’ key sports content, which is defined by Ofcom as Premier League football.

In 2010, Ofcom put an obligation on Sky requiring it to offer wholesale Sky Sports 1 and 2 at prices set by the regulator. It said it would review the obligation after three years in light of developments in the market.

A review of the ‘wholesale must-offer obligation’ started in December 2014 and Ofcom has announced that it is now carrying out more consultation on the so-called reciprocal supply of sports content.

BT has voiced concerns that Sky's insistence on getting content in return for providing Sky Sports 1 and 2 is "anti-competitive".

BT announced last month it had won the rights to screen every Champions League and Europa League match for the next three seasons.

It also has the rights to some Premier League matches, which are shown on BT Sport 1.

Sky has argued that its stance is fair and reasonable as it creates a level playing field, with all providers having access to the full range of key content.

It said a reciprocal agreement creates a more positive experience for consumers if they can access all key content from a single retailer.

High prices and poor outcomes

Currently, the reciprocal agreement insisted on by Sky only applies to BT, although Ofcom believes Sky would apply similar terms should other providers acquire key content rights.

Ofcom said it plans to consult further with stakeholders on whether Sky’s insistence on reciprocal supply of key sports content is a practice which may be prejudicial to fair and effective competition.

The regulator's latest consultation follows calls from BT for the telecoms regulator to investigate Sky’s dominance of the pay TV market.

John Petter, CEO of BT’s consumer division, claimed a lack of competition in pay TV had led to high prices and poor outcomes for consumers.

In a speech to the Broadcasting Press Guild, Mr Petter said the sector’s problems were in contrast to the falling prices, rising speeds and strong international performance seen in the UK broadband market.

Calling for Ofcom to formally amend the scope of its ‘digital communications review’, BT said Sky customers are paying almost £50 a year more than the EU average for basic TV channels and £75 a year more if they include premium movie and sports channels.

Mr Petter said the broadband market benefits from regulation at a wholesale level, which allows all service providers equal access to the national network maintained and run by Openreach.

By contrast, he said in pay TV “there are weak wholesale obligations that only apply to Sky Sports 1 and 2”.

The war of words between the two companies has also seen Sky call for BT’s consumer arm to be split from its Openreach business, which owns and maintains the UK’s largest broadband network.

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