Joint Committee on The Draft Communications Bill Minutes of Evidence


Examination of Witnesses (Questions 614-619)

MR TONY BALL, MR RAY GALLAGHER AND MS SHEILA CASSELLS

MONDAY 24 JUNE 2002

Chairman

  613. Thank you for coming to talk to us.
  (Mr Ball) Not at all.

Paul Farrelly

  614. Sky has pointed to the slowness with which competition authorities have exercised their powers under the Competition Act in respect of your company, but nonetheless you support a move towards Competition/Enterprise Act powers, away from sector-specific powers. Is it not the case that it is much more likely that OFCOM will be able to act swiftly and more effectively using strong sector-specific powers relating to networks and services, rather than just relying on competition powers?
  (Mr Ball) It would, clearly, be much quicker if it was allowed to make the rules up itself than seeing if there is any consumer detriment in the market. I agree it is a conundrum, and it seems to take time. The problems we have had in the past have taken far more time than they should have done, but we still support Competition Act type powers rather than sector-specific regulation, because you then end up with an unelected body deciding how you run the industry.

  615. A number of people have commented that Sky itself has contributed to, or indeed has benefited by slowness in exercising powers. Whichever powers were exercised, would you support, as many people do, a fixed timescale written on the face of the Bill for OFCOM to carry out investigations and make its decisions, and also for appeals?
  (Mr Ball) It is impractical. Let me comment on your first point. I do not think we have ever benefited from slowness. I can point to a number of examples where it has cost us profitability, the slowness of operation of the regulatory process.

  616. Why is it impractical? It is a practice that has been adopted elsewhere, including in Europe.
  (Ms Cassells) It is very difficult to set down rigid timescales in advance, although we would support OFCOM having tight promptness standards. The circumstances of each case would differ, so it may take longer to investigate one particular thing compared to another. We know there are provisions in the Competition Act that have not yet been brought into force, which allow directors to go to court to get the DGFT to reach decisions more quickly; and also within the Competition Act there is scope for interim measures, as there are under the Bill, relating to communications networks and services; so there is scope for things to move much faster, and we very much encourage that approach.
  (Chairman) It was very clear, talking to the telecoms companies that a dominant player in their case, BT, had worked the system extremely effectively for a number of years in terms of delaying or obscuring decisions, and were very keen that that should not continue, most particularly should not find its way across into OFCOM. That is the issue.

Baroness Cohen of Pimlico

  617. The Channel 4 submission argues that platform ownership should be recognised as a form of media ownership, an argument with which you are no doubt familiar; and that, like anything else, should be taken into account when assessing levels of market influence. They went on to say that they see merit in the proposal for a plurality test. Given that BSkyB has a dominant position in the market, would you prefer to leave all the decisions to OFCOM on this, or would you want something specifically written into the Bill because you are dominant on platform ownership?
  (Mr Ball) On vertical integration? Whether a platform counts as a —

  618. Whether, when you are thinking about levels of market input, ownership of platform counts.
  (Mr Ball) No, I would not agree with that; I would rather have competition law decide whether there was any over-influence in the market. At the moment what is proposed in the Act we support pretty well—apart from the fact that it has singled Sky out as the only company that can't buy into ITV. I don't think you need to extend that and make platforms a separate market. Our platform is pretty well addressed because it is an open platform; we cannot use our ownership of the platform in a way that is anti-competitive because any channel—and there are more than 250 channels on the platform, most of which we do not own—can get carriage.

  619. I suppose really it is down to price.
  (Mr Ball) There are two ways of coming on. One is as part of a retail package, and we would pay for that channel; and the other way is through conditional access, and that is a regulated service.
  (Mr Gallagher) It is worth adding that Sky does not own the satellites; it is an independent company, so anyone can obtain capacity.
  (Mr Ball) There is nothing to stop another company setting up its own platform, using that same capacity—a rival platform.


 
previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2002
Prepared 6 August 2002