By: Russ
Rapture responds to OW post about Ofcom appeal…
This is Rapture thing is getting a bit tired. Isn’t the fundamental problem here that satellite television carriage is just really expensive and under-capitalised firms who want to reach the public are better off just maintaining a web presence? I had the unfortunate task in my earlier job as in-house counsel to a large cable firm of kicking off a local television channel that could not afford to pay our non-discriminatory, cost-based leased access rates. It resulted in the same type of legal wrangle.
But it’s a bit much for media firms to want to reach millions of people via a satellite or cable platform, but want to do it very cheaply. You can’t do that in publishing. You can’t do that in advertising. So why do they think broadcasting is any different?
I’m a News Corp shareholder: You gotta pay full freight, people.
Anyway, we received the following comment from David Henry of Rapture:
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?
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May 1st 2008
As you have shares in News Corp you should be worried that your investment is being used in a way that is against the regulations.
The costs of the broadcast by satellite aren’t the problem they are competitive and have come down in price over the years thanks to competition. While the EPG from Sky goes up in price and not just by a couple of % above inflation but 180% in 2002/3. The EPG fees are not just for the EPG but include the Sky satellite boxes that Sky claim are sold to the viewers.
So you may well be getting tired of the truth being highlighted but if you invest in News Corp you will know what sort of business practices they employ.
Now as the name of your blog suggests you are watching how Ofcom plays by the rules. So I would have expected you would be supporting anyone that wants the regulator to follow the laws and enforce them in a even and transparent way?
The last time I commented on your site was when a letter was published from your self and a BSkyB PR man. You were arguing that Ofcom should let Sky launch its Picnic service. I take it you are aware of the activities of NDS the News Corp owned Conditional Access business that is in court in the US accused of hacking and piracy? This would be the same company that would supply Picnic’s CA system. I for one think that needs to be prevented and an indepedent CA system should be used if its allowed to be launched at all.
I do not have any shares in NDS or News Corp.
May 2nd 2008
‘As you have shares in News Corp you should be worried that your investment is being used in a way that is against the regulations.’
David, your twice-rejected claim against Sky does not amount to a regulatory violation.
May 8th 2008
As the author of the last few posts on the dispute - and as a non shareholder in News Corp, of whom I have no great love - I should maybe comment.
“I would have expected you would be supporting anyone that wants the regulator to follow the laws and enforce them in a even and transparent way.” Can’t speak for Russ, but yes I do, and I think Ofcom still needs to work on its transparency.
If you can get the CAT or the EU or any Court to say they have cocked this up legally, I’ll be only too happy to congratulate you. The truth of the matter thus far however, is that, as I said in the post, you haven’t even landed a punch so far. In the three knock down rule, you’ve already hit the canvas twice. But, maybe you still have the knock-out punch. I don’t know. I wish you luck.
May 16th 2008
I see that the NDS v Echostar case has now been resolved. Whilst the jury concluded that NDS violated the Federal Communications Act and the California Penal Code, they only awarded damages for the cost of a single piece of EchoStar’s anti-theft system. http://www.guardian.co.uk/media/2008/may/16/digitaltvradio.television?gusrc=rss&feed=media