Judgment on an application by British Telecommunications PLC (“BT”) to vary the interim relief order dated 29 April 2010, as amended on 23 November 2010 (the “IRO”).
On 31 March 2010, the Office of Communications (“Ofcom”) published its “Pay TV Statement” containing its decision to vary the conditions in the broadcasting licences of British Sky Broadcasting Ltd (“Sky”) for its core premium sports channels, Sky Sports 1 and Sky Sports 2. The new conditions require Sky to offer to wholesale its core premium sports channels to retailers on other broadcasting platforms and, in the case of standard definition versions of the channels, offer them at wholesale prices set by Ofcom. This condition is referred to as “the wholesale must-offer obligation” or “WMO”. Sky appealed the Pay TV Statement. It also applied for urgent interim relief pursuant to rule 61 of the Competition Appeal Tribunal Rules 2003, S.I. No. 1372 (the “Tribunal Rules”).
Following a hearing in April 2010, the parties agreed to a form of interim relief that modified Sky’s obligations under the WMO in respect of certain specified platform operators and otherwise suspended the decision contained in the Pay TV Statement. This was set out in the IRO made by the then president on 29 April 2010.
BT then applied to vary the IRO so that its customers with BT’s “Cardinal” and “YouView” set-top boxes would be able to receive the Sky Sports 1 and Sky Sports 2 channels by means of a technology – internet protocol television (“IPTV”) – which was not provided for in the IRO. The application was made pursuant to rule 61(4) of the Tribunal Rules and in reliance on the specific liberty to apply set out in paragraph 2 of the Schedule to the IRO.
The Tribunal held that BT was entitled to seek to vary the IRO under the express liberty to apply in the light of subsequent developments. The Tribunal granted BT’s application to amend the IRO upon BT undertaking to maintain BT Sport on Sky’s platform until the conclusion of Sky’s appeal or further order.
In reaching its conclusion, the Tribunal’s starting point was that the WMO remedy was imposed by Ofcom in order to ensure fair and effective competition pursuant to s. 316 of the Communications Act 2003, in the public interest. Unless suspended, the WMO remedy covers any form of delivery of Sky Sports 1 and Sky Sports 2, including via IPTV.
The Tribunal had regard to a number of other factors, including: (i) the fact that the complexity of appeals such as this means that it will usually be impossible for the Tribunal on an interim hearing to arrive at even a provisional view as to the prospect of the appeal succeeding; (ii) the technical developments that occurred over the exceptional time that the appeal is taking have rendered the IRO largely ineffective as regards BT; (iii) BT has acquired valuable football broadcasting rights, making it a more formidable competitor to Sky; and (iv) the ability of Sky customers to access all Premier League matches on Sky set top boxes.
