Watchdog warns BSkyB on pay TV

Premium content may be forced to go to rivals

It hasn’t been a good week for Rupert Murdoch’s satcaster BSkyB.

A day after learning that British regulators are forcing it to sell down its stake in beleaguered commercial broadcaster ITV at a £650 million ($1.7 billion) loss because of anti-competition concerns, media watchdog Ofcom warned BSkyB it could be forced to make premium content, including Hollywood movies and live soccer, available to rival pay TV platforms.

Announcing the findings of its inquiry into the U.K. pay TV market, Ofcom said that BSkyB’s dominant position meant it had “an incentive to limit the distribution of this content to competitors, in a manner that favors its own satellite platform.”

But rather than referring the matter to the U.K. Competition Commission, Ofcom is launching a consultation to see whether the paybox should be forced to sell premium fare to rivals.

“This proposal should enable consumers to access this content regardless of their choice of pay TV platform, and provide consumers with an increased choice of service bundles,” said the regulator.

Ofcom also proposed allowing BSkyB to launch its much-delayed new pay service, Picnic, on U.K. digital terrestrial platform Freeview — provided the satcaster made the premium sports and film channels available on a wholesale basis to other retailers.

Ofcom’s inquiry was sparked after rival platforms Virgin Media, Setanta, Top Up TV and BT Vision accused BSkyB of running a “vicious circle” of control that crushes competition.