BSkyB first applied to Ofcom in April 2007 for permission to replace the free channels it currently offers on Freeview with a new paid-for service called Picnic, offering access to news, sport, film and entertainment channels. The regulator launched a consultation on the issue last October and a decision had been expected imminently.
Yesterday, however, Ofcom said that it now believed the proposals had to be considered in conjunction with a wider investigation it is conducting into the UK’s pay-TV market. It promised to publish a consultation document by the end of the summer, making a conclusion unlikely before this time next year.
Ofcom is concerned that if it allowed BSkyB, the dominant player in the UK's pay-TV sector, to offer its services on Freeview the operator could squeeze out smaller competitors, including Setanta, BT Vision and Top-Up TV, which all already offer access to premium content to digital terrestrial viewers.
Mike Darcey, Sky's chief operating officer, said: "Ofcom has already recognised that Picnic would deliver increased choice, and it is disappointing that customers will be denied these benefits by an extended regulatory process. More than a year has passed since our initial application, with no definitive conclusion in sight".
Ofcom's wider investigation into pay-TV dates started in March 2007 after cable operator Virgin Media complained that it had lost access to several Sky channels because of unfair pricing demands from the market leader.
