On 5 November 2014 the Competition Appeal Tribunal handed down a judgment granting an application by British Telecommunications plc (“BT”) to vary the Tribunal’s interim relief order of 29 April 2010 (“the IRO”) to include BT’s Internet Protocol Television (“IPTV”) platforms.
The application was made in the context of long-running proceedings arising from the publication by the Office of Communications (“Ofcom”) of its Pay TV Statement on 31 March 2010 (“the Statement”). By the Statement, Ofcom imposed a Wholesale Must Offer (“WMO”) Remedy on British Sky Broadcasting Limited (“Sky”) requiring it to wholesale its core premium sports channels Sky Sports 1 and Sky Sports 2 to competing Pay TV retailers at prices determined by Ofcom (“the WMO remedy”).
On an application by Sky for interim relief to suspend the entry into force of the WMO remedy, the parties reached agreement on the terms of interim relief in the form of the IRO which provided inter alia for Sky to supply Sky Sports 1 and Sky Sports 2 to BT via its then distribution technology, Digital Terrestrial Television.
By a judgment in 2012, the Competition Appeal Tribunal agreed with Sky that the core competition concern expressed by Ofcom in the Pay TV Statement as justifying the imposition of the WMO was unfounded. On an appeal by BT, the Court of Appeal later ruled that the Tribunal should additionally rule on whether a separate competition concern expressed in the Statement was capable by itself of justifying the WMO. So it is that, over four years after the imposition of the WMO and the making of the IRO, Sky’s appeal remains to be finally determined and BT applied to vary the IRO to provide for supply to customers on its IPTV platforms.
The Tribunal was satisfied that BT was entitled to seek to vary the IRO under the express liberty to apply in the light of subsequent developments. The Tribunal reasoned that the starting point was that the WMO remedy was imposed by Ofcom in order to ensure fair and effective competition in the public interest, and that unless suspended, the WMO remedy covered any form of distribution technology, including IPTV. It considered that the terms of the IRO were designed to ensure that meaningful use could be made of Sky Sports 1 and Sky Sports 2 by competing retailers on an interim basis, but that technical developments over the wholly exceptional time the appeal had taken to resolve had rendered the IRO largely ineffective as regards BT. The Tribunal concluded it would be wrong to refuse an application to update the IRO because BT had itself spent a substantial sum acquiring football broadcasting rights on order to improve its competitive position on the market. However, the Tribunal required that, as a condition of obtaining interim supply of Sky Sports 1 and Sky Sports 2 on its YouView IPTV platform, BT undertake to maintain its own BT Sports channels on Sky’s DTH platform.
The judgment is here.
Mark Howard QC and Sarah Ford appeared for BT, instructed by BT Legal.
James Flynn QC and David Scannell appeared for Sky, instructed by Herbert Smith Freehills LLP.