MUMBAI: UK media watchdog Ofcom will not open an investigation into Project Canvas, a partnership between the BBC, ITV, Channel 4, Five, BT, TalkTalk and Arqiva that aims to offer digital terrestrial channels and internet-delivered TV services via a set-top box connected to viewers’ TV sets.

Earlier BSkyB had written to Ofcom expressing concern about the initiative. Project Canvas also involves creating technical standards which can be used by participating services to deliver content via a single set-top box using a branded user interface which will be known as YouView.
 
Virgin Media and IP Vision had submitted complaints to Ofcom that alleged potential breaches of the Competition Act 1998. Ofcom also received submissions from 11 other parties, including BSkyB. 
 
But at the current stage of YouView’s development, Ofcom believes it would be premature to open an investigation because:
· IPTV is still an emerging sector, and the impact of YouView on the market will not be known with any confidence for some time;
· It is likely that YouView will bring benefits to viewers and consumers. Any potential harm to competition would need to be offset against these benefits; and

· Whether or not YouView and its partners will harm competition in the ways alleged will depend upon how this emerging market develops and how the YouView partners act, particularly in relation to issuing technical standards and providing access to content.

The impact of YouView on content syndication is difficult to determine with any confidence at this point.

If YouView did lead to its partners restricting the supply of video on demand content to rival firms, this could lead to consumer harm and may well generate competition concerns.

But at the present time, there is little evidence that YouView’s partners are likely to withhold content as a result of their involvement in the project. Given the possibility that harmful effects might emerge later, Ofcom will, nonetheless, keep the content syndication policies of the YouView partners under review.

Standards : The partners behind YouView have already made a number of technical standards available to the industry. And while there is potential risk of consumer harm if transparency is restricted in the future, Ofcom does not consider the risk sufficiently material at this stage to justify an investigation.

User interfaces : There is a risk that YouView may result in a more limited choice of user interfaces and user experiences for viewers. But an assessment of this would need to recognise the choice that already exists in the TV market and new opportunities for entry from other firms, as well as the potential benefits to consumers of a common ‘look and feel’. Taking these factors into account, Ofcom does not consider that the risk of consumer harm is sufficient to warrant opening an investigation on this basis.

Ofcom to monitor developments: Ofcom says that it does not propose to open a Competition Act investigation. However, it will continue to monitor developments, particularly in relation to YouView’s approach to sharing standards and its effects on content syndication. If evidence emerges that the operation of YouView could cause harm to viewers and consumers in the future, Ofcom may reconsider whether to investigate.

Ofcom CEO Ed Richards says, “Ofcom’s view is that consumers’ interests will not be served by opening an investigation. It would be premature at the current stage of YouView’s development given the absence of a clear risk of consumer harm. But if evidence does emerge in the future that YouView causes harm to the interests of viewers and consumers we may reconsider whether to investigate.”