Media regulator investigate local pay TV in U.K.

LONDON — U.K. media regulator Ofcom is set to investigate the local pay TV market amid claims that Rupert Murdoch’s dominant paybox BSkyB is acting against the interests of fair competition and consumers.

Move follows extensive lobbying from rivals of BSkyB, which immediately responded to the watchdog’s announcement on Tuesday by calling for a probe into archrival Virgin Media.

Depending on the results of the Ofcom investigation, the regulator will decide whether to refer the matter to the Competition Commission.

Ofcom has received submissions from several U.K. media companies, including cable-phone operator Virgin and British Telecom, which is attempting to enter the pay TV market with its BT Vision service.

BSkyB’s rivals are worried that the paybox eventually will withdraw its channels from competing operators, as it already has done with Virgin following a dispute over carriage fees. Last month, BSkyB pulled several channels, including flagship web Sky One.

Competitors also are worried about BSkyB’s plans, announced last month, to launch a pay service on the Freeview digital terrestrial platform.

The Ofcom probe will examine the consumer and competition implications of this proposed initiative, which some industry toppers regard as anticompetitive.

Ofcom previously has said it would review whether BSkyB’s plans for Freeview would “unacceptably diminish the appeal” of Freeview, a big success in Blighty.

“BT, Top Up TV and Setanta all have a commercial interest in preventing BSkyB from increasing customer choice by developing a new pay TV service on the DTT platform,” BSkyB said in a statement.

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