Examination of Witnesses (Questions 614-619)|
MONDAY 24 JUNE 2002
613. Thank you for coming to talk to us.
(Mr Ball) Not at all.
614. Sky has pointed to the slowness with which
competition authorities have exercised their powers under the
Competition Act in respect of your company, but nonetheless you
support a move towards Competition/Enterprise Act powers, away
from sector-specific powers. Is it not the case that it is much
more likely that OFCOM will be able to act swiftly and more effectively
using strong sector-specific powers relating to networks and services,
rather than just relying on competition powers?
(Mr Ball) It would, clearly, be much quicker if it
was allowed to make the rules up itself than seeing if there is
any consumer detriment in the market. I agree it is a conundrum,
and it seems to take time. The problems we have had in the past
have taken far more time than they should have done, but we still
support Competition Act type powers rather than sector-specific
regulation, because you then end up with an unelected body deciding
how you run the industry.
615. A number of people have commented that
Sky itself has contributed to, or indeed has benefited by slowness
in exercising powers. Whichever powers were exercised, would you
support, as many people do, a fixed timescale written on the face
of the Bill for OFCOM to carry out investigations and make its
decisions, and also for appeals?
(Mr Ball) It is impractical. Let me comment on your
first point. I do not think we have ever benefited from slowness.
I can point to a number of examples where it has cost us profitability,
the slowness of operation of the regulatory process.
616. Why is it impractical? It is a practice
that has been adopted elsewhere, including in Europe.
(Ms Cassells) It is very difficult to set down rigid
timescales in advance, although we would support OFCOM having
tight promptness standards. The circumstances of each case would
differ, so it may take longer to investigate one particular thing
compared to another. We know there are provisions in the Competition
Act that have not yet been brought into force, which allow directors
to go to court to get the DGFT to reach decisions more quickly;
and also within the Competition Act there is scope for interim
measures, as there are under the Bill, relating to communications
networks and services; so there is scope for things to move much
faster, and we very much encourage that approach.
(Chairman) It was very clear, talking to the telecoms
companies that a dominant player in their case, BT, had worked
the system extremely effectively for a number of years in terms
of delaying or obscuring decisions, and were very keen that that
should not continue, most particularly should not find its way
across into OFCOM. That is the issue.
Baroness Cohen of Pimlico
617. The Channel 4 submission argues that platform
ownership should be recognised as a form of media ownership, an
argument with which you are no doubt familiar; and that, like
anything else, should be taken into account when assessing levels
of market influence. They went on to say that they see merit in
the proposal for a plurality test. Given that BSkyB has a dominant
position in the market, would you prefer to leave all the decisions
to OFCOM on this, or would you want something specifically written
into the Bill because you are dominant on platform ownership?
(Mr Ball) On vertical integration? Whether a platform
counts as a
618. Whether, when you are thinking about levels
of market input, ownership of platform counts.
(Mr Ball) No, I would not agree with that; I would
rather have competition law decide whether there was any over-influence
in the market. At the moment what is proposed in the Act we support
pretty wellapart from the fact that it has singled Sky
out as the only company that can't buy into ITV. I don't think
you need to extend that and make platforms a separate market.
Our platform is pretty well addressed because it is an open platform;
we cannot use our ownership of the platform in a way that is anti-competitive
because any channeland there are more than 250 channels
on the platform, most of which we do not owncan get carriage.
619. I suppose really it is down to price.
(Mr Ball) There are two ways of coming on. One is
as part of a retail package, and we would pay for that channel;
and the other way is through conditional access, and that is a
(Mr Gallagher) It is worth adding that Sky does not
own the satellites; it is an independent company, so anyone can
(Mr Ball) There is nothing to stop another company
setting up its own platform, using that same capacitya