Sky proposal to launch new service on digital terrestrial television

On 8 February 2007 Sky announced that it proposes to launch a new service on the digital terrestrial television (DTT) platform. Following a series of requests for clarity on the regulatory process regarding the proposed launch, Ofcom confirms that it will consult on any such proposals.

Sky's announcement noted that the launch of the new service will be subject to approval by Ofcom including the necessary variations to licences held by Sky and National Grid Wireless, which provides Sky with DTT transmission and multiplexing services.

When Ofcom receives a request for approval of the necessary variations, the issues that would require consultation are likely to include:

Firstly, the impact on consumers of Sky's proposal to use MPEG4 compression technology via new set-top boxes, in order to increase the amount of content which can be carried. Ofcom would need to assess:

• The potential benefit of a rapid migration from the current
compression standard MPEG2, to MPEG4 which will ultimately increase the number of channels available on digital terrestrial television;

• The potential detriment associated with a reduction in the number of channels received by existing set-top boxes or digital televisions;

• The risk that existing set-top boxes or digital televisions might be incompatible with multiplexes broadcast using a combination of MPEG2 and MPEG4 coding;

• The overall effect on consumer confidence in the digital switchover process.

Secondly, whether any variation to the channel line-up might
unacceptably diminish the appeal of the channels to a variety of tastes and interests and whether a reduction in the current range of free-to-air channels would be compensated for by the proposed introduction of the new pay television channels.

Finally, the effect of any change to existing licence conditions and / or the need to include any new licence conditions to ensure fair and effective competition for the benefit of consumers.

The content of the consultation and its timing will be announced once a request for an approval has been received. Ofcom's normal consultation period is 10 weeks.

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