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Sky ready for round one with Ofcom

City A.M. Reporter
SKY and Ofcom will tomorrow begin what promises to be a long and tortuous legal battle over the future of pay TV.

Sky will appear before the Competition Appeal Tribunal to request a stay of implementation on Ofcom’s new rules forcing the broadcaster to slash the prices it can charge rivals for Premier League football.

The stay would mean no changes could be made to the current rules until the issue has been debated in the courts.

If successful the ruling would effectively end Ofcom’s hopes of bringing its changes in for the start of next season as the legal process would take at least six months until the first hearing. A lengthy appeals process could drag it out far longer.

Ofcom’s pay TV review cut the wholesale price for Sky Sports 1 by 24 per cent to £10.63 a month. It means rivals BT and Virgin will be able to undercut Sky and chip away at its 9.5m subscriber base.

Sky argues that the intervention is unwarranted and represents punishment for its innovation and willingness to take risks.

Sky’s filing states: “The [pricing] conditions represent a far-reaching intervention into Sky’s business which by its nature will be difficult fully to reverse and which is likely to cause damage for which Sky will not be compensated in the event that it is successful in its appeal.”