April 8, 2013 3:14 pm

Ofcom probes Sky refusal to run BT ads

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BSkyB’s refusal to run adverts promoting BT’s rival sports channels is being investigated by Ofcom, after the telecoms group expressed concerns that the satellite broadcaster was breaching TV advertising regulations.

BT is looking to roll out as many as three sports channels this summer, as it seeks to ramp up its TV offering to attract new customers to its “triple-play” service: TV, home phone and broadband.

Last summer, BT paid £738m for the TV rights to 32 Premier League football matches per season for three years, in a move that put it in direct competition with the Sky Sports channels. BT has since acquired rights to broadcast live Premiership rugby matches and live women’s tennis.

By advertising the new service on Sky channels, BT would have been able to target the satellite broadcaster’s customer base of more than 10m homes. BT Vision, the telecoms operator’s TV service, currently has around 770,000 customers.

However, while Sky already runs advertising for BT’s telephony products across many of its channels, it has argued that running BT Sport adverts could undermine the competitive offering of its own sports channels.

Sky said: “There many other avenues for BT to advertise its sports channels without seeking to take advantage of the investments that we’ve made to build Sky Sports. It’s entirely reasonable for us to choose not to carry advertising for a directly competing service.”

John Petter, managing director at BT Retail, its consumer business, said: “We are happy to take Sky’s advertising but they seem afraid of taking ours. It’s like a rottweiler running away from a newborn puppy.”

BSkyB had been willing to run BT Sport adverts on many of its channels but refused to run them on its sports channels, according to people familiar with the matter.

ESPN, a sports channel that holds the rights to some Premier League matches, has had its own adverts for football coverage broadcast on BSkyB’s sports channels. However, BSkyB is a retail partner with ESPN, which means that its channels are only available via the satellite broadcaster’s platform. BSkyB also sells advertising space on behalf of ESPN, giving it a commercial incentive for ESPN to succeed.

BT’s dispute with BSkyB could prove a test case for whether or not the Ofcom code allows broadcasters to protect their own investments by turning down adverts from competitors.

Ofcom’s code on advertising states that there should be “no undue discrimination between advertisers who seek to have advertisements included in television and radio services”.

BT Sport will be made available to BT’s TV and broadband customers later this year and the telecoms operator is looking to sell subscriptions directly to Sky customers, having secured channels on its rival’s platform. BT has also held discussions with Virgin Media about wholesaling its sports content to the company.

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