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Premier League takes action against Ofcom BSkyB ruling

The Premier League has this weekend begun a feasibility study with regards to the recent Ofcom ruling which could see Sky TV reduce its wholesale prices charged to rival such as BT and Virgin Media. There is concern that the potential 23% reduction in wholesale subscriber prices would reduce the attractions of multimillion pound football deals in the future and could actually reduce the income received from BSkyB by the likes of the Premier League.

While there is no doubt that BSkyB has a very tight grip on the UK sports market this came about because of significant investment by BSkyB in the past. The main argument is whether BSkyB should be allowed to benefit from this very early and very costly investment or whether in fact it is now time to reduce the company's grip and allow the likes of BT and Virgin Media to make a major play for the pay-per-view and subscription TV markets.

Despite the fact that more competition in this area of the media industry will ultimately help consumers with more price competition, many people have difficulty getting their heads around the fact that BSkyB is in effect set to be penalised for being so successful. There was nothing to stop the likes of Virgin Media and British Telecom taking the same investment risk at the onset of subscription TV but ultimately it was BSkyB which created a market which others are now starting to benefit from.

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