By: scottvine
Rapture decides to continue fight with BskyB
Cause the man from Mars won’t eat up bars when the TV’s on (Blondie - ‘Rapture’)Rapture TV has announced it is to appeal the ruling of the Competition Appeal Tribunal (CAT) of 31 March 2008 which roundly dismissed its appeal against an Ofcom decision relating to electronic programme guide (EPG) services. In March 2007, Ofcom resolved a dispute between Rapture and BSkyB, concluding that charges levied by BSkyB for the provision of EPG services between November 2005 and November 2006 were fair, reasonable and non-discriminatory. In May 2007, Rapture appealed the decision to the CAT, claiming that Ofcom did not conduct a thorough investigation and defined the scope of the dispute too narrowly. In November 2007, the CAT granted Rapture`s application for permission to amend its original notice of appeal.
Now, Rapture seeks to appeal the CAT decision claiming they were unable to submit new evidence that came to light too late for the initial appeal notice (presumably the one, as amended). This is the same notice of appeal that the CAT described as lacking in `clarity, precision, and particularisation`, in a case, where it found Rapture`s claims to be `ill-founded` and `misconceived`.
According to Rapture’s website, the appeal will argue that Rapture TV believes that BSkyB is charging excessively high fees for the supply of an EPG service on the Digital Satellite platform which include costs that are nothing to do with the cost of supplying a technical service.
Rapture argues the Ofcom was wrong to base its whole dispute investigation on a confidential ‘Sky Platform Model’, which neither separates the technical costs and is not up to date and has not been independently verified. Rapture believes that this fact leaves the burden of proof on BSkyB to prove that its technical costs are economic and do not include costs for non technical services. The Rapture Appeal ruling laid the burden on Rapture to prove that the costs were too high but with out access to the Sky technical costs this was an impossible task.
The problem for Rapture is that the CAT addressed this issue in its ruling “Rapture did not apply in this Appeal for disclosure and inspection of the Sky Platform Model. It made its submissions without having seen this Model. Without having done so there is a lack of foundation for its submissions which purport to address the Sky Platform Model and the use which OFCOM made of it.â€
It also pointed out that Rapture could have, but choose not to, place further evidence before Ofcom when it was conducting its original investigation “Rapture had sufficient opportunity to place before OFCOM such information as it considered relevant to OFCOM’s determination of the dispute. Rapture cannot now complain if there was further information which was relevant but which Rapture did not provide OFCOM. In any event Rapture has not sought to identify or put such information before this Tribunal or shown its relevance. Rapture’s assertions are bald and devoid of particularity.â€
I do hope Rapture’s David Henry has unearthed some hidden gems in this case - I do have some sympathy with his position - but legally thus far he has failed to even land a punch, never mind a knock out blow to either the soundness of Ofcom’s decision, or as to the question of whether or not BSkyB supplies the EPG to all parties on a Fair Reasonable and Non-Discriminatory basis. In reality, I see little chance of his company coming out in top in this case.
May 1st 2008
Your article is lacking in some of the details and events that took place before the CAT hearing and Appeal.
1. Rapture submitted all the BSkyB company accounts for most if not all the BSkyB limited companies accounts during the dispute. Ofcom made no reference to any of them in the dispute determination.
2. Rapture submitted the Sky consumer agreements that contain the T&C’s for the Sky Set Top Box subsidy to Ofcom. These agreements show that if you don’t enter a Sky subscription agreement then you have to pay fitting and delivery. This is a Tied agreement and therefore the regulations state only Sky pays the cost of the STB. Ofcom made no reference in the Rapture dispute Determination to these documents either.
So from just the above the CAT has got it very wrong. The CAT process and rules are restrictive in the terms and scope. Rapture did indeed submit an Amended Notice of Appeal which reduced the scope of the arguments but included a new economic expert and witness statement. The CAT granted part permission but refused the new expert evidence. Therefore reducing further the scope and evidence of the Appeal.
What is clear is that Ofcom is not following the EU Directives including 2002/19EC, 2002/21/EC and 2002/22/EC. Accounting seperation is an important requirement and Ofcom has failed to ensure that BSkyB follows this requirement and instead has used a ‘Sky Platform Model’ which is not audited and hadn’t been updated for several years. This shows that Ofcom failed to perform even the minimum level of investigation into to the costs of supplying the EPG. Another fact that you may not be aware of is the fact that Ofcom during a meeting held at the Ofcom offices on the 23rd of Feb’07 refused to answer the simple question on ‘Who owns the set top box?’. Even after 2 requests for an answer Ofcom simply sat in silence. The answer had been included in the Sky customer agreement handed to Ofcom a month earlier by Rapture.
No matter which way you look at this Ofcom is not acting as a regulator and is not ensuring the maximum benefit to the consumer as required by law. Ofcom claims that it is a cornerstone of the regulations to protect the investment incentives of BSkyB in the Sky platform. They seem to forget the investment incentives of everyone else.
Rapture is preparing a complaint to the EU over Ofcoms failure and the breaches of competition law by BSkyB. Perhaps the EU can solve the Murdoch problem?