BT has won the right to sell Sky Sports 1 & 2 to users of its latest generation of set top boxes in the latest round of a four-year row over access to the channels.
In a verdict published today, the Competition Appeals Tribunal said Sky should provide the channels to BT as an interim measure while an Ofcom ruling to mandate their wholesaling to competitors is reviewed.
At the time of its 2010 original ruling the regulator, which was acting on a complaint from BT and other pay-TV operators, said enabling customers to move provider without missing out on top sporting events was an important factor in ensuring competition in the market.
However Sky has always argued that deals with Virgin Media and TalkTalk proved its willingness to strike commercially viable agreements with rivals without outside intervention or regulated pricing.
In 2012 the CAT backed Sky’s appeal against Ofcom’s order, leaving the company free to negotiate its own deals with rival pay-TV operators.
That decision lead to a stand-off between the satellite broadcaster and BT which wanted to offer the channels on its then to be launched YouView service.
The companies have an agreement for BT to offer the channels to users of its legacy Vision+ boxes but failed to agree terms for them to be offered to BT YouView subscribers after Sky insisted BT agree to wholesale its channels as part of any deal.
In February this year, following BT’s appeal of the CAT decision, the Court of Appeal found the tribunal had made errors of law when coming to its decision and ordered that the matter be reconsidered.
During CAT’s latest hearing of the issue, BT argued that Sky’s refusal to wholesale the channels for use on its newer set top boxes was harming competition by forcing it to supply the older, less featured, Vision+ equipment to some customers.
In today’s ruling, Mr Justice Roth said: “It is not realistic to suggest that BT should maintain use of the [Vision+] STB and deprive its customers of the improved technology and service of the YouView box simply to retain the delivery of SS1&2.
“This would frustrate the development of BT as a competitor on the Pay TV market and cannot, in my view, be regarded as being in the public interest.”
BT will be pleased to have secured access to the channels before YouView is fully able to support Sky’s NOW TV streaming service which offers access to its sports, entertainment and movie channels on flexible, monthly terms.
Although the service is currently limited to offering a movies on demand service, a future update to the YouView system will add support for its live channels, allowing Sky to retail its sports and other channels direct to BT TV users, just as BT retails its sport channels direct to Sky’s subscribers.
BT has committed to continue selling its channels to Sky customers pending the final ruling over Ofcom’s wholesale must offer order (WMO), ensuring fans still enjoy full coverage of the premier league without moving to BT’s TV service.
Commenting on today’s ruling, a BT spokesperson said: “BT welcomes today’s Court’s decision to grant supply of Sky Sports 1 and 2 to BT’s YouView platform.
“BT has always maintained that Ofcom was correct to impose the wholesale must offer on Sky and this remedy remains essential to address the significant competition concerns with Sky’s supply of its channels. We look forward to being able to offer these channels to our YouView customers very shortly.”
Ofcom Chief Executive, Ed Richards, commented: “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.
“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.”
Sky said it would continue to fight the imposition of the WMO obligation.
A spokesperson added: “Today’s judgment is a purely interim measure with no impact on the ongoing legal process or the CAT’s previous dismissal of Ofcom’s core argument in favour of WMO.”