BSkyB may lose grip on sport, films

U.K. regulator likely to open up pay TV market

A pay TV price war is about to break out in Blighty.

BT Vision and Virgin Media are set to undercut prices for premium sports and films charged by News Corp.’s BSkyB, the dominant provider.

The moves come as a review of the local pay TV market by regulator Ofcom finally draws to a conclusion.

Last summer, Ofcom signaled that it plans to force BSkyB to cut prices it charges third parties for providing them with premium content such as Sky Sports and Sky Movies.

At an Ofcom board meeting due to take place today regulators are expected to discuss the level of the proposed cuts to these fees as part of a review of Blighty’s pay TV market launched back in March 2007.

BT Vision, which has struggled to establish its service because of what it regards as BSkyB’s unfair competition, is lining up a £15 ($24.50) a month Sky Sports offer that would undercut the cheapest Sky Sports package by more than $16.30, according to local press reports.

But BSkyB is certain to contest Ofcom’s ruling, which is expected to be announced in March.

BT and Virgin Media do not deserve to be handed a reward at Sky’s expense for their repeated failure to invest,” said BSkyB topper Jeremy Darroch. “We spend over £1 billion ($1.63 billion) a year so viewers can enjoy the movies and sports coverage they expect.”

BT and Virgin claim BSkyB’s dominance of the pay TV market led to the collapse of sports rights specialist Setanta last year.