BT/BSkyB broadband promotion

No. 19/05/2003

The Director General of Telecommunications has investigated whether the joint British Telecommunications plc (BT) and British Sky Broadcasting Limited (BSkyB) promotion of broadband infringes the Competition Act 1998.

NTL complained to the Director that the promotion had the object or effect of preventing, restricting or distorting competition within the UK by reinforcing BSkyB's market position in retail pay TV and BT's market position in retail "DSL enabled broadband", the latter by foreclosing competition in the retail broadband market. NTL also complained BT had abused its dominant position by discriminating in favour of those BT subscribers who are prospective customers of BT's competitors (i.e. those who are likely to value a "triple play" package of TV, broadband internet access and telephony services). BT was alleged to have leveraged its dominant position in residential telephony into retail broadband access services.

The Director has now completed his investigation. The Director has not found any evidence to suggest that the agreement has the object or effect of preventing, restricting or distorting competition within the UK contrary to the Chapter I prohibition in the Act.  Concerning the alleged infringement of the Chapter II prohibition in the Act, it does not appear that BT's provision of BT Broadband services under the deal is taking place below cost. Although the joint promotion with BSkyB is offered on discriminatory terms, the relatively low take-up of the promotion means that it has not had and is unlikely to have a material effect on competition. The Director does not, therefore, consider that the promotion infringes the Act.

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