Channel 4 chief executive David Abraham has criticised Sky, saying the satellite TV company should pay for airing the five terrestrial channels.
He described the ISP’s actions as ‘dishonest’, because at the moment, C4 has to pay Sky ‘several million pounds’ to broadcast its channel.
Sky has responded that if they were to start paying to show terrestrial channels, the cost would be passed onto the customer, driving up costs for TV services.
Abraham said: “The argument that has been played out that we are looking for subsidy and regulatory defence, is a dishonest one. The fact is the current regime is a piece of government intervention which benefits the pay platforms, it allows pay-TV platforms to take free-to-air channels for free.
“The government came out without enforcing regulation and said they would quite like the fee to go to zero and Sky pretty much ignored that.”
Abraham believes if both Sky and Virgin Media were forced to pay the broadcaster a fee rather than the other way round, they would raise around £200m, with Sky paying the bulk of that.
However, Sky hit back and said Abraham doesn’t understand how its model works. By offering the channel on its TV platform, C4 is able to raise a third of its revenue from advertising.
A spokesperson said if Sky was forced to pay C4 and other public service broadcasters (PSBs), that fee would be passed onto the paid TV service customer: “Let’s be clear, if additional charges were introduced, ultimately millions of households would end up paying for PSB channels. Who wants that to happen?”
Ed Vaizey, the culture minister has urged Sky to stop charging PSBs and if it doesn’t, the government will step in and start regulating the industry.
Last year, ITV and the BBC came to an agreement with Sky that saw their service fees being scrapped in exchange for Sky being able to offer the two broadcasters’ video on demand services – iPlayer and ITV Player.
Channel 5 appears in the Sky Guide for free, in exchange for making the HD versions of its channels exclusive to Sky subscribers, so they don’t appear on Freesat or Freeview HD.
Virgin Media is already bound by law to carry the PSB channels free of charge, and cannot charge susbcribers to receive them.