Ofcom 'to force Sky Sports price cut'

Ofcom is preparing to force Sky to cut the price of its premium sports content to benefit consumers and rival operators, but the move will prove controversial.

According to widespread reports, the regulator's board will meet tomorrow for a "routine update" on the pay-TV review. However, its final statement on the consultation is not due to be published until March.

Ofcom first initiated its consultation into the pay-TV industry in 2007 after receiving a joint submission from BT, Virgin Media, Setanta and Top Up TV.

In June, the watchdog signalled a firm intention to disrupt Sky's "market power" by regulating wholesale access to premium content, particularly the Sky Sports and Sky Movies bouquet of channels (both standard and high definition variants).

If approved, the new pricing model would force Sky to wholesale Sky Sports 1 to rivals for between £9.44 and £11.24, significantly below the current rate of £13.48.

BT Vision chief executive Marc Watson claimed last July that the firm will offer Sky Sports 1 to its consumers at £15 per month for the start of the 2010/11 English Premier League season.

Speaking to The Sunday Telegraph, a spokesman for the telecoms giant said that 2010 will be a "crucial" year for the TV industry, particularly in terms of wholesale pricing for premium content and the emerging IPTV marketplace.

"This year is the crossroads," he said. "We can either go the right path with properly priced sports and internet TV, or the UK risks falling behind."

Virgin Media is also expected to cut Sky Sports pricing should Ofcom's proposal go ahead, with Sir Richard Branson previously suggesting that the cost of Sky Sports 1 will drop by a fifth for cable TV customers.

However, Sky is widely expected to appeal Ofcom's new pricing arrangements, which could delay the plans in a mire of court actions. The firm recently argued that it simply wants to get a fair price for the Sky Sports channels to reflect the £1bn a year it spends on rights deals.

Leading sport bodies, including the Football Association and England and Wales Cricket Board, have also criticised Ofcom's pay-TV review as being "fatally flawed in a number of key areas".

John Whittingdale MP, the Conservative chairman of the Commons Culture, Media and Sport Committee, told The Sunday Telegraph: "Many sporting bodies are concerned that if Sky are forced to cut the price they can charge for Sky Sports it will reduce the amount they will pay for rights and reduce the money paid to clubs."