THE Office of Fair Trading (OFT) will not investigate Project Canvas, a tie-up between large media players, over fears it will stifle competition.
The proposed joint venture by firms including BBC, BT, TalkTalk and ITV will offer video-on-demand content through a viewer’s Freeview box.
The scheme has come under fire from rivals Sky and Virgin who claim their services will face unfair competition from the new service.
But the OFT ruled Canvas does not qualify for investigation as none of the developers were contributing a “pre-existing business” to the project.
A previous joint video-on-demand (VoD) venture named Project Kangaroo, developed by ITV, Channel 4 and BBC Worldwide, was blocked by the OFT.
Sheldon Mills, OFT director of mergers said: “Our investigation has confirmed, that the JV partners, including the BBC, do not intend to transfer an existing business into the JV. Therefore, regardless of the potential significance of Project Canvas joint venture for the future of internet connected television, the notified proposals do not give rise to a merger qualifying for substantive investigation by the OFT.”
Meanwhile, City A.M. understands that Ofcom will limit the internet service providers (ISP) affected by its tough new anti-piracy legislation to those with over 400,000 subscribers.
The controversial Digital Economy bill, passed after Gordon Brown had dissolved his government, will force ISPs to write to users suspected of piracy and could eventually lead to forcing ISPs to cut off their users.
Smaller ISPs argued the costs of matching IP addresses to customers would make their businesses prohibitively expensive. However the decision, which Ofcom has not made public, could cause a mass migration of pirates to ISPs outside Ofcom’s reaches.
WHAT IS PROJECT CANVAS?
PROJECT Canvas, headed by director Richard Halton (above), involves a proposal to build an open internet-connected television platform with common technical standards.
The BBC started the project, contributing existing research and development. Other partners involved ITV, Channel 4, Five, BT, Talk Talk and Arqiva.
It will combine broadband content with broadcast content but deliver the service through a user’s TV, as opposed to a distinct computer.
The partners intend to form a venture to promote the platform to consumers as well as the content, service and developer industries.
The backers of the project claim it will provide a common technical standard through set-top boxes, allowing it to provide “seamless access to a range of third-party services through a common, simple, user experience”.
They add it will provide an upgrade for free-to-air TV, and an open platform that will bring a wide range of internet services to TV screens.