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Last Updated: Friday, 21 April 2006, 11:39 GMT 12:39 UK
Ofcom to cap BSkyB service tariff
Sky Digital EPG
Sky charges other firms to appear on its electronic programme guide
Watchdog Ofcom plans to cap the charges broadcaster BSkyB imposes on firms wanting to use its satellite service.

The media regulator said it had made the decision because of Sky's dominant position in the UK pay-TV sector. About a third of the UK's homes use Sky.

Current guidelines designed to ensure fair access to the marketplace "do not provide sufficient clarity or certainty for broadcasters", Ofcom said.

Ofcom has now begun consultations on its plans, which end on 22 May.

Currently Sky charges other broadcasters for a number of services such as carrying its channels, encryption and including stations on its electronic TV guide.

Costs dispute

With eight million households now signed up to Sky's retail platform service, Sky is now in a much stronger negotiating position

Such costs have triggered rows with broadcasters including ITV, BBC and Channel 4, who have tried to get Sky to carry their services for free or cut the charges imposed on them.

ITV has complained to the regulator at least twice about its deal with Sky.

Meanwhile, both the BBC and ITV have taken the decision to broadcast their services unencrypted. The BBC estimates the move will save 185m over five years.

"With eight million households now signed up to Sky's retail platform service, Sky is now in a much stronger negotiating position vis-a-vis TPS (technical platform services) customers," Ofcom added.

ITV welcomed the proposals, adding: "We look forward to new guidelines being put in place as quickly as possible so that broadcasters can be confident of being charged a fair price for access to the Sky platform in future."

Sky and the BBC declined to comment on the proposals.

Dominance challenged

News of the plans comes on the eve of an auction of the television rights for English Premier League Football - long the cornerstone of Sky's success.

Sky is also facing another challenge to its dominance of the pay-TV market.

Earlier this week, Ofcom lifted restrictions on pay-TV services broadcasting on digital terrestrial services (DTT) - a move that could pave the way for services such as Freeview to take on Sky directly.

Currently, the only way DTT viewers can access pay-TV services is through Top-Up TV, which allows customers to access 11 pay-per-view channels for a monthly charge.

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