Watch yourself
It looks like the final potential hurdle to the creation of an ‘open' Internet TV platform by a terrestrial TV consortium headed-up by the BBC has been removed. Ofcom announced this morning that it will not open an investigation into YouView - formerly known as Project Canvas - on the grounds that it's too early to assess its competitive impact.
"Ofcom's view is that consumers' interests will not be served by opening an investigation," said Ofcom chief exec, Ed Richards. "It would be premature at the current stage of YouView's development given the absence of a clear risk of consumer harm. But if evidence does emerge in the future that YouView causes harm to the interests of viewers and consumers we may reconsider whether to investigate."
Here's Ofcom's summary of the complaints brought be the likes of Virgin Media:
- Project Canvas partners are incentivised to withhold content from competing platforms;
- Technical standards produced by Project Canvas had not been developed openly and were not made available for use by those outside the joint venture
- Use of the Project Canvas brand (YouView) is tied to the specified user interface/ electronic programming guide; and
- It is likely to restrict competition between TV platforms.
And here's a summary of the reasons why an investigation won't be opened:
- IPTV is still an emerging sector, and the impact of YouView on the market will not be known with any confidence for some time;
- It is likely that YouView will bring benefits to viewers and consumers. Any potential harm to competition would need to be offset against these benefits; and
- Whether or not YouView and its partners will harm competition in the ways alleged will depend upon how this emerging market develops and how they act, particularly in relation to providing access to content and issuing technical standards.
So Ofcom reckons it's too early to tell whether or not YouView will have a net harmful effect of competition. It also looks like Ofcom has allowed itself to be swayed by the public interest argument, rather than restrict its remit purely to that of competition arbiter. Unsurprisingly YouView was quick to gloat and Virgin Media quick to moan. Nobody we called at Sky is answering their phone this morning.
In response to Ofcom's decision today not to open an investigation under the Competition Act, YouView CEO Richard Halton said:
"We have been clear throughout this process that YouView will stimulate competition in the TV platform market and create opportunities for content providers and device manufacturers," said YouView CEO Richard Halton. "Most importantly it represents a great consumer proposition. We therefore welcome this decision from Ofcom."
"We are perplexed and disappointed by Ofcom's decision but will not comment further until we've examined their statement and the underlying reasoning in more detail," was the Virgin Media statement.
While Ofcom seems to have decided to side-step the issue for now, we have some sympathy due to our own ambiguity on the matter. On one hand, as Freeview users, we are grateful for all the ‘free' TV we get. We also think Sky is in a weak position to complain about YouView being anti-competitive.
On the other hand, is it right that companies like Virgin Media, which have struggled to maintain a business based entirely on a private, commercial model, should have to compete directly with state-funded companies? While the BBC (and, for that matter, BT) are not the state monopolies they once were, the public money they get still represents a competitive advantage.
