BSkyB accuses watchdog of interference

BRITAIN’S dominant pay-TV firm BSkyB attacked media regulator Ofcom for unprecedented interference yesterday, saying it would launch legal action if forced to open its channels to rivals at a set rate.

The company, part of Rupert Murdoch’s empire, was reacting after Ofcom said BSkyB could be forced to make its most sought-after content, including sports and movies, available to other broadcasters at a rate fixed by the regulator.

Proposals by Ofcom announced yesterday followed complaints from rivals such as BT Group and Virgin Media, which accused BSkyB of suppressing competition.

The Ofcom announcement also comes in the week that broadcaster Setanta filed for administration, removing one rival that had broken BSkyB’s monopoly in showing live English Premier League football.

Analysts said the new rates paid by rival broadcasters for transmitting BSkyB channels could be set between 10%-30% below the current ratecard that BSkyB charges. They said BSkyB shares had already priced in this possibility.

BSkyB, which has more than 9m customers and where Rupert’s son James is non-executive chairman, said it disagreed fundamentally with the findings and said it would use all legal avenues to challenge the “unwarranted intervention.”

“We want our premium channels to be widely available on other platforms,” BSkyB Chief Executive Jeremy Darroch said in a statement. “But we deserve a fair return.

“Forcing Sky to sell its channels for less than their true value is a subsidy for companies that have shown no appetite for investment in programmes. It defies belief that Ofcom expects Sky to lower its wholesale prices to compensate for the higher costs of less efficient platforms.”

Ofcom said requiring Sky to make its premium channels available to other retailers on a wholesale basis was the most appropriate way of ensuring effective competition.