Should OFCOM step in?

[altis]

First, Virgin is out-manouvered by Sky over its proposed takeover of ITV and now some of the Sky channels are no longer carried on cable. Methinks that's two:nil to Murdoch - so far!

As an engineer I just see that cable and satellite are two competing but complementary methods of delivery. In some instances cable is more appropriate (eg. in towns) whilst in others (eg. in the countryside) satellite would be better. There is no logical reason why one system should carry a different selection of channels to the other.

To my eye, the problem is that Sky is both a content provider and a channel deliverer whilst Virgin Media is just a deliverer. Provided matters stay like this, Sky will always be able to skew the market for their own benefit.

I believe that Ofcom should step in and force Sky to split into two companies - one providing the content whilst the other is responsible for the transport of channels by satellite. That way, all transport systems would be on a level footing and the customer could simply choose the one most apropriate.

[Nemesis]

Originally Posted by altis

First, Virgin is out-manouvered by Sky over its proposed takeover of ITV and now some of the Sky channels are no longer carried on cable. Methinks that's two:nil to Murdoch - so far!

As an engineer I just see that cable and satellite are two competing but complementary methods of delivery. In some instances cable is more appropriate (eg. in towns) whilst in others (eg. in the countryside) satellite would be better. There is no logical reason why one system should carry a different selection of channels to the other.

To my eye, the problem is that Sky is both a content provider and a channel deliverer whilst Virgin Media is just a deliverer. Provided matters stay like this, Sky will always be able to skew the market for their own benefit.

I believe that Ofcom should step in and force Sky to split into two companies - one providing the content whilst the other is responsible for the transport of channels by satellite. That way, all transport systems would be on a level footing and the customer could simply choose the one most apropriate.

You would need to do the same with VM, as it effectively own the LIVING TV channels too ....

Hi Altis

[RileyM]

Originally Posted by altis

First, Virgin is out-manouvered by Sky over its proposed takeover of ITV and now some of the Sky channels are no longer carried on cable. Methinks that's two:nil to Murdoch - so far!

As an engineer I just see that cable and satellite are two competing but complementary methods of delivery. In some instances cable is more appropriate (eg. in towns) whilst in others (eg. in the countryside) satellite would be better. There is no logical reason why one system should carry a different selection of channels to the other.

To my eye, the problem is that Sky is both a content provider and a channel deliverer whilst Virgin Media is just a deliverer. Provided matters stay like this, Sky will always be able to skew the market for their own benefit.

I believe that Ofcom should step in and force Sky to split into two companies - one providing the content whilst the other is responsible for the transport of channels by satellite. That way, all transport systems would be on a level footing and the customer could simply choose the one most apropriate.

I agree, something needs to be done be the regulator(s). But as Nemesis mentioned if content provider & distrubitors are to be split, the same would apply to Virgin Media, as Virgin Media Television (which is the content provider/production arm of Virgin Media) owns LIVING, LIVING 2, Bravo, Bravo 2, Trouble, Challenge, Sit Up TV (providers of Price Drop TV & Bid TV) as well as 50% of UKTV.

[mertle]

would the arbritation that virgin media suggested would have been done by ofcom. Sky refused but not sure if ofcom would step in on there own accord and get involved.

The government themselves might ask ofcom to intervene. However the silence from the government ministers suggest they are keeping out of it.

[VirginMediaSucks]

Yes.

You've hit the nail on the head about the clash between content providers and carriers. As long as the content providers are owned by the carriers, then there will always be an issue.

It's compounded by the fact that there are basically just two subscription TV carriers, so the market dynamics that usually iron these things out in other industries just aren't there.

Think for example about your electricity or gas supply.. you can buy your electricity from whoever you like. The people who provide you with electricity (i.e. the National Grid and your local supply company) have no interest in who you buy from. A similar thing is happening with the local loop (i.e. your telephone line) - BT have spun this out to a unit called OpenReach who basically provide the copper infrastructure, and probably OpenReach will be floated in time.

Ironically, NTL used to be National Transcommunications Ltd. They were the people who ran the IBA's television transmitters for them, acting independently of whichever ITV company or Channel 4 variant was using them.

So you could.. in theory.. rent your cable TV from an infrastructure provider and buy your actually programming from somewhere else. These days, that should certainly be possible.

(Pedants will point out that Sky actually broadcasts over the Astra satellite system as do many other companies, but none that I can think of in the UK).

But sometimes market forces create a monster, and in the case of Virgin Media and Sky, the way their businesses work means that the customer is always very much at the whims of the business and they don't have real freedom of choice. In these cases, the natural step is proper regulation.. which is where OFCOM would come in.

Added:
Further to what I was saying about Astra, in theory you can pick up any signal broadcast by the Astra satellite your dish is point at, all you'd generally need to do is change your STB or add another STB. To that extent, it's an open system. Virgin Media is a fully closed system as it stands, and this is one of Sky's gripes. If Virgin Media rented capacity on the Astra system and Sky had access to the old NTL/Telewest cable system then that would be REAL competition.

Added again:
You can have a poke at the Astra Channel Finder to see what Astra carries, 357 channels on the 28.2ºE satellite that Sky uses alone.

[MovedGoalPosts]

I'm not that sure that splitting the content from the network providers would work, especially in the longer term. One only has to look at the BT model. With everyone jumping on the LLU bandwagon, BT are left with only a fraction of their network in their control. There is only limited investment in network upgrades.

With Cable or Satellite the companies have incentives to invest in the netowrk or content keeping them both in parity.

But should OFCOM have a remit with the Sky Channels on VM. I'm not sure. Ultimately this is a commercial decision for the companies, even though it is us, the customer, that appears to lose out.

Arbitration would seem to be the sensible option, if only to get past the spin being created by both sides. But you can't lead a horse to water...

[c1rcle]

Instead of waiting till it's too late like they have they (ofcom) should have been there from the start to MAKE them agree & to tell them what the prices should be & force them to stick to it. Too late now.

[VirginMediaSucks]

Originally Posted by Rob

But should OFCOM have a remit with the Sky Channels on VM. I'm not sure. Ultimately this is a commercial decision for the companies, even though it is us, the customer, that appears to lose out.

Well, OFCOM or the OFT (Office of Fair Trading). Virgin Media's accusation basically boils down to saying the Sky are behaving unfairly when it comes to the Sky basic channels (and I guess also the Flextech ones that Virgin sell to Sky).

Either or both the OFT and/or OFCOM may have a role.. my beef is that Virgin Media should have taken this up with one or other rather than using the poor customer as a pawn. If Virgin Media really believe that Sky is pursuing unfair business practices, then the OFT/OFCOM approach should have been the path they took.

[1701-e]

Virginmedia has been negotiating for some time, not just last week. And it was Sly TV who started the public slanging with their 'interventions' onto cable feeds 2/3 weeks ago.

Sly or $ky should not be allowed to buy full rights to shows if they won't allow cable or DTT carriage.

[Stuart]

Originally Posted by Rob

I'm not that sure that splitting the content from the network providers would work, especially in the longer term. One only has to look at the BT model. With everyone jumping on the LLU bandwagon, BT are left with only a fraction of their network in their control. There is only limited investment in network upgrades.

With Cable or Satellite the companies have incentives to invest in the netowrk or content keeping them both in parity.

Actually, one point to make here. Apart from their editing and uplink facilities, Sky don't own or operate a network. SES own the Astra satellite, and the dishes/boxes are owned by the consumer. This is one reason Sky have always been able to stay ahead of NTL with minimum investment in facilites (not including broadband here).

---------- Post added at 15:52 ---------- Previous post was at 15:49 ----------

I personally don't understand why the government stopped Sky taking their premium services, but ignored the basic services. Surely any protection for competitions sake should apply to ALL channels?

[VirginMediaSucks]

Originally Posted by Stuart C

I personally don't understand why the government stopped Sky taking their premium services, but ignored the basic services. Surely any protection for competitions sake should apply to ALL channels?

A cockup?

---------- Post added at 16:16 ---------- Previous post was at 16:13 ----------

Originally Posted by Stuart C

Actually, one point to make here. Apart from their editing and uplink facilities, Sky don't own or operate a network. SES own the Astra satellite, and the dishes/boxes are owned by the consumer. This is one reason Sky have always been able to stay ahead of NTL with minimum investment in facilites (not including broadband here).

This is where Sky scores in terms of the business model.. and of course most of the investment that it made on the ground ends up being charged back to the consumer.

There's no reason (apart from capacity, I don't know) why Virgin Media couldn't rent bandwidth on the Astra system. That would liven things up a bit!

[Stuart]

Originally Posted by VirginMediaSucks

A cockup?

---------- Post added at 16:16 ---------- Previous post was at 16:13 ----------



This is where Sky scores in terms of the business model.. and of course most of the investment that it made on the ground ends up being charged back to the consumer.

Combine all that with the fact that Sky requires users to buy their own boxes, therefore can roll out new boxes relatively cheaply (from their point of view, the consumer picks up the cost).

There's no reason (apart from capacity, I don't know) why Virgin Media couldn't rent bandwidth on the Astra system. That would liven things up a bit!

Maybe they will. At one point, I would have said they wouldn't have used ADSL for TV, but they appear to be planning to do so.

[altis]

Originally Posted by VirginMediaSucks

There's no reason (apart from capacity, I don't know) why Virgin Media couldn't rent bandwidth on the Astra system. That would liven things up a bit!

If only it were that simple!

I have a satellite radio system (or rather I did have until it packed up yesterday ) with a motorised dish. I could receive over 2000 free-to-air radio channels and, if I had wanted to, a similar number of TV channels. If my receiver had some Common Interface slots I could also have received a selection of subscription channels. However, I couldn't receive any from Sky because of their proprietary encryption system.

Unfortunately, all this comes with a very primitive EPG. You can see what the current programme is for each channel and that's about it. Also, as channels come and go, it's a pain programming them in by hand all the time.

As I understand it, the BBC broadcast their own channels, free-to-air, via Astra but they still pay Sky millions a year just to have these put in Sky's proprietary EPG system. Mr Murdoch has been very clever and has all bases covered. This is why I think it is now time for Ofcom to step in.