M has effectively given the green light to a controversial video-on-demand service backed by the BBC after declining to launch a competition investigation.
The YouView service – previously codenamed “Project Canvas” – is now due to launch by March next year.
The platform will allow users to stream on demand content from a number of providers from a single set-top box. It is backed by the BBC, ITV, Channel 4, Five, BT, TalkTalk, Orange and Arqiva and will allow providers to stream pay-as-you-go as well as free to air content.
Analysts believe it could prove as successful as Freeview, which brought digital TV crashing into almost every home in the UK.
However, competitors including Virgin Media and BSkyB have raised concerns it could distort competition in the increasingly important content on demand market.
Ofcom acknowledged there could be competition concerns in the future but said it was unable to launch an investigation until it had time to assess the impact YouView has on the emerging sector.
Ofcom chief executive, Ed Richards, said: “An investigation would be premature at the current stage of YouView’s development given the absence of a clear risk of consumer harm.
“But if evidence does emerge in the future that YouView causes harm to the interests of viewers and consumers we may reconsider whether to investigate.”
Virgin Media branded the decision “perplexing” and may appeal.
FAST FACTS | YOUVIEW
YouView is a joint venture between media giants including BT, TalkTalk and ITV.
It will offer video streamed over users’ broadband connections through a set-top box.
Broadcasters will be able to offer pay per view.