Advanced Television

Ofcom’s YouView light is amber, not green

October 19, 2010

There have been plenty of headlines in the UK suggesting that Ofcom has “approved” YouView, the BBC-backed video-on-demand service. “Not so,” implies Tony Ballard, a media lawyer at Harbottle & Lewis. Ofcom has said that any investigation now would be “premature” because it was part of an emerging sector, its impact too unclear at this stage.

In a press statement, Ofcom said that there were no signs that Project Canvas, which aims to bring internet content into the living room via its YouView set top box, would keep content away from rivals. “Ofcom’s view is that consumers’ interests will not be served by opening an investigation,” said Ofcom, chief executive Ed Richards.

Tony Ballard said the words from Ofcom were carefully chosen. “Far from green lighting Project Canvas in their announcement today, as some are suggesting, Ofcom is actually going to wait and see – which is rather different, opening the prospect that its current position may change. What about other competing TV platforms that are aiming to do the same thing as Project Canvas? That is the question that Ofcom has had to consider in response to complaints from other industry players,” adds Ballard.

Ofcom has powers to investigate under the Competition Act if there are reasonable grounds for suspecting that the project may affect trade and distort competition, but has decided in effect that the project does not qualify for investigation, among other things because IPTV is still an emerging sector and YouView’s impact on the market will not be known with any confidence for some time. “But that decision is subject to Ofcom continuing to monitor developments, particularly in relation to the sharing of technical standards with industry and the effects on content syndication.”

“In deciding that it was premature to open an investigation, Ofcom said that whether or not YouView and its partners will harm competition in the way that the other industry players fear will depend on how this emerging market develops and how YouView and the partners in the project act, particularly in relation to providing access to content and issuing technical standards. For example, if the partners were to withhold content from competing platforms there could be consumer harm and this could well generate competition concerns. And there was a risk of consumer harm if the industry did not have full transparency as to the technical standards.”

“It follows that, far from greenlighting the project, Ofcom is keeping its options open. It has made it quite clear that no clearance has been given. On the key question whether there is an adverse effect on competition, it says it is too early to say. And much will depend on the behaviour of the partners as the project develops. There is no green light. We must all wait and see.”

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