Sky TV gets a competition warning

The Herald reports:

Sky TV has been issued with a warning that its contracts with telcos were likely to have previously harmed competition, says the Commerce Commission.

However, market developments mean those particular parts of the contracts are unlikely to have that effect now or cause harm in the future, says commission chair Mark Berry.

As such, the commission issued Sky a warning and said the pay-tv provider was on notice that the regulator would continue to monitor its contracts.

The Commission said it will take no further action right now over what it called “historical breaches”.

“We believe that Sky entered into historical agreements with RSPs [retail services providers] that had the purpose, effect, or likely effect of substantially lessening competition,” Berry said.

“However due to market developments, the key commitments Sky has with RSPs are unlikely to continue to have the same effect. For example the new sports pay TV product from Coliseum and the recent exemption granted by Sky to Telecom to market this product,” he said.

“As a consequence, a warning letter and notice that we will continue monitoring Sky’s contracts and conduct was the prudent course of action,” Berry said.

I’m very keen to see market developments that get us more competition and choice.

It also said Sky’s contracts with content providers were not likely to have breached the law.

“There appeared to be sufficient content of all types available outside of Sky’s exlusive contracts to put together an appealing pay TV package,” a statement from the commission said.

My preference is for contracts to be non-exclusive. By this I mean of course a contract for a TV series will exclude another TV channel showing that series – but they shouldn’t restrict other outlets such as DVDs or Quickflix from being able to offer the material in different mediums.

Labour have said:

Sky should consider itself extremely lucky today. The ruling is a cop out from the Commission. A monopoly as powerful as Sky should not be able to get away with uncompetitive behaviour. It is a kick in the guts to consumers.

“The Commission appears to have decided not to take any action because a case would cost too much and take too long. That’s not good enough. It should do its job as a regulator,” said Kris Faafoi.

I do wish Labour would think about the internal consistency of their public positions.

How can you argue that the Government should not second guess the Commerce Commission when it comes to copper broadband pricing, yet jump in yourself and claim they got it wrong in this case and should do what politicians say in this area.

Effectively Labour have now undermined their own arguments on the copper pricing issue. It’s an own goal, and an annoying one, because as people know I’m one of those saying leave the Commerce Commission process on copper pricing alone.