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Last Updated: Tuesday, 20 March 2007, 10:31 GMT
Ofcom looks into pay TV industry
Ofcom headquarters
Ofcom can refer the pay TV industry to the Competition Commission
The media regulator Ofcom is to launch an investigation into the pay TV industry, following a submission from a group including Virgin Media.

Virgin Media recently lost access to several Sky TV channels after a bruising battle during which the two failed to agree a new contract.

The National Consumer Council (NCC) said the dispute was bad for customers.

The group of BT, Setanta, Top Up TV and Virgin Media wants Ofcom to refer the industry to the Competition Commission.

Ofcom's investigation will include subscription and on-demand services across cable, digital terrestrial television (DTT), satellite and the internet.

BSkyB response

Aspects of this market appear to be failing consumers and a thorough investigation is warranted
National Consumer Council

BSkyB is the biggest provider of pay TV services through its satellite platform and is also considering entering the DTT market.

"BT, Top Up TV and Setanta all have a commercial interest in preventing Sky from increasing customer choice by developing a new pay TV service on the DTT platform," BSkyB said in a statement.

BSkyB also said it hoped that the investigation would look into "the physical and legal barriers and business practices that shield Virgin Media from true competition".

The 3.3 million subscribers who receive cable television from Virgin Media - formerly known as NTL:Telewest - have been unable to watch Sky channels such as Sky One since the beginning of March following the spat between the two broadcasters.

The NCC welcomed the inquiry saying: "Aspects of this market appear to be failing consumers and a thorough investigation is warranted."

Ofcom is already investigating BSkyB's purchase of a 17.9% stake in ITV, which effectively prevented Virgin from launching a takeover.

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