BT has followed Virgin in a blistering attack on competition regulator’s ‘unjustified’ decision not to cut the cost of Sky’s competitors showing its film channels.
The Competition Commission announced in May that it’s unlikely to force any changes on Sky, even though it thinks Sky still has too much power over British pay-TV.
The Commission cited the arrival of Netflix and Lovefilm’s online film services as a major change which has changed the balance of power – in a surprise reversal of its previous findings.
BT has condemned the Commission not only for its conclusions, but for the way it has assessed and tested the evidence, and for failing to follow its own guidelines in producing the report.
Responding to the Commission’s provisional findings on pay-TV movies, BT said: “As a result of a lack of access to key content, BT has struggled to compete effectively and build a sustainable pay TV retail subscriber base.
“BT disagrees fundamentally with the CC’s conclusions as to the specific issues referred to it by Ofcom. The fundamental change in analysis reflected in the Revised Provisional Findings is quite unjustified.”
The 89-page response documents six sets of flaws in the Competition Commission’s provisional findings, although the Commission is expected to publish a final ruling by August 3.
The flaws include inconsistency on key points of substance, failing to key assertions, factual inaccuracies and misunderstandings, giving undue weight to flawed or irrelevant evidence and insufficient weight to relevant evidence, and failing to consistently apply the Competition Commission’s own guidelines.
Last week, Virgin Media attacked the Commission’s report as ‘irrational, unsound and highly speculative’.
Virgin claims: “As a consequence of the CC’s revised position, the consumer detriment resulting from ineffective competition, namely higher prices, lower quality of service, less choice, and less innovation, will persist.”
In 2011, Ofcom asked the Competition Commission to investigate films on pay-TV as part of its long-running inquiry into the British pay-TV industry.
The commission initially decided that Sky had a monopoly on subscription film channels, but asked for more time to examine the effect of new arrivals like Netflix and Lovefilm.
The Pay-TV Inquiry has already seen the Competition Commission order Sky to cut the price of its sports channels to rival services. Sky appealed this decision more than a year ago, but the appeal has yet to be decided.