Original URL: http://www.theregister.co.uk/2010/10/19/ofcom_youview_ok/

Ofcom blesses YouView

It's still an empty Canvas, though

By Andrew Orlowski

Posted in Media, 19th October 2010 10:45 GMT

Regulator Ofcom has rejected calls to investigate YouView, the venture formerly known as Project Canvas, under the Competition Act.

YouView was formed to create a next-generation set top box jointly owned by the terrestrial UK broadcasters, ISPs BT and TalkTalk, and Arqiva, and bundles TV content with a TiVo-like box. YouView gear is expected to go on sale next spring, priced between £150 and £300.

A dozen parties including Virgin, Sky, an IPTV startup and a free software standards group, had complained that it would stifle the market for innovation in IPTV - a wide open field that includes Google.

UK startup IP Vision, which has created a platform called FetchTV, alleged that the use of license fee funds creates an industry 'Goliath', which would eventually restrict consumer choice.

Ofcom said it will continue to monitor the project, but says the market is too new to judge just yet.

"Whether or not YouView and its partners will harm competition in the ways alleged will depend upon how this emerging market develops and how they act, particularly in relation to providing access to content and issuing technical standards."

A Virgin spokesman told El Reg:

"We are perplexed and disappointed by Ofcom's decision but will not comment further until we've examined their statement and the underlying reasoning in more detail."

Ofcom had acknowledged some of the points it received. It agreed the risk of YouView's control of the UI had potentially anti-competitive consequences, and also that the owners - who have a monopoly of terrestrial public service content - may be tempted to use platform control to withhold material to rivals.

But Ofcom's Ed Richards described intervention as "premature". The full statement is here.

Rivals have several other avenues to pursue, including the Office of Fair Trading, the EU and judicial review. The EU has been trying to prise open the TV market for a decade.

Meanwhile Ofcom itself is the subject of an investigation, of course. It's survived the "bonfire of the quangos", swallowing the postal regulator Postcomm - but many of its duties are likely to be folded back into Whitehall departments. ®