Ofcom lifts wholesale obligation on Sky Sports

The media regulator chose to remove the so-called “Wholesale Must Offer” ruling on the basis that Sky Sports is now available on a wide number of pay TV platforms, including Virgin Media and newer platforms TalkTalk TV and EE TV, via the Now TV app.

Ofcom says: “The “wholesale must-offer” regulation was introduced in 2010 to promote choice and innovation for consumers through greater competition in pay TV”.

An Ofcom statement read: “Ofcom continues to monitor the pay TV market closely”.

BT is the only TV provider receiving Sky Sports 1 and 2 under the WMO rule, and the United Kingdom incumbent is not happy about Ofcom’s decision. Last year, Ofcom began a review to determine whether regulation remained appropriate.

Sky has scored a victory over BT that could give it a stronger hand in sports channel negotiations, following a decision by the media watchdog to scrap rules that force it to provide Sky Sports 1 and 2 at a controlled price. Sky Sports channels are also available on Sky’s internet-based NOW TV service.

Meanwhile, the sports TV market has become more competitive, thanks largely to the £2 billion investment by BT into broadcast rights for 25% of top-flight United Kingdom football matches and exclusive rights to the UEFA Champions League. Ofcom expects all providers to engage willingly, constructively and in a timely manner to ensure sports continues to be made widely available to viewers. “Should evidence emerge of practices which we consider to be prejudicial to fair and effective competition, we will quickly reassess the need for regulation”.

A spokesperson said: “We are pleased that Ofcom has chose to remove the WMO condition”.

A spokesman for BT called the move “very disappointing”.

“We still believe that effective remedies are essential to address the failure of competition in the Pay TV market, in which we estimate Sky has had around 75pc share of retail subscription revenues for more than 10 years”.

BT and Sky are locked in a battle of claim and counterclaim over why they have failed to agree reciprocal wholesale deals for their sports channels. This is important because BT have been able to offer SS1&2 and BT Sport to customers in a single package, which Sky have not been able to do.