Sky and Virgin slam BBC on Canvas platform project

As I reported last month, the BBC was quick to introduce Project Canvas to replace the now defunct Kangaroo Project.  Now both Sky and Virgin have slammed the proposals.

In a robust response to the interim report from the government on Digital Britain, British Sky Broadcasting says that the plan by the BBC to set technical standards and develop new platforms for broadband video services raises concerns. Virgin Media has also raised specific questions in its response, calling for “regulatory scrutiny” of the implications for competition.

In its published response, Sky says “the suggestion that the BBC should become involved in driving broadband take-up by setting technical standards and developing new platforms raises concerns. As well as the potential for market distortion and illegal state aid, it sets a dangerous precedent and risks distracting the BBC from its core purpose, which is to invest in public service content and to make it widely available to licence fee payers on whichever platforms and services they choose to use.”

The response observes that “The most appropriate role for the BBC in encouraging broadband take-up is to make its content widely available on as many platforms as possible.” It says the core purpose of the BBC is to create public service programming and to make it as widely available and easily accessible as possible, to allow licence payers to access it on whichever platforms and services they choose to use.

“The BBC should not favour one particular platform or technology over another, and should be scrupulously ‘platform neutral’ both in the way in which it makes its content available to different services and in the way it promotes its availability to viewers.”

Sky says that based on previous experience it is concerned about the potential of the BBC “to distort the market by favouring its own distribution platforms and technologies over their competitors”. It observes that this raises potential competition and state aid issues.

The BBC was one of the partners in a joint venture video on demand initiative known as Project Kangaroo that was scrapped after being blocked by the Competition Commission earlier this year.

Sky argues that while claiming to adhere to the principle of platform neutrality, the BBC has for many years promoted the availability of its digital channels to favour Freeview over satellite and cable.

“We are concerned that the BBC is similarly intent on favouring its iPlayer service: through its extensive marketing and promotion; its proposal to entrench further the underlying technology platform by licensing it to other PSBs; and by its unwillingness to supply BBC content to competing on-demand video services like Sky Player,” said Sky.

Programming from the BBC iPlayer is currently only available as a link to the BBC web site from the Sky Player service.

“The BBC’s ‘Canvas’ proposals, currently being consulted on by the BBC Trust, potentially raise similar concerns,” in the view of Sky.

The BBC Trust says that “Canvas will offer a standards based open environment” that is open to anyone that adopts and uses its specifications, which will be “substantially based on standards used within the internet and broadcast industries.”

So far there have been no technical details on these standards or the terms on which they will be made available, for instance to other platforms like Sky, should they wish to use them.

Sky is urging the government to define more clearly the role of the BBC in driving digital and broadband take-up. It observes “The most positive contribution the BBC can make — and one that is entirely consistent with its core purpose — is to distribute its content as widely as possible and promote its availability to viewers in a way that is platform and service provider neutral.”

Clearly Sky has its own agenda to promote, but it is difficult to argue with this logic. While the BBC has promoted Freeview and Freesat as free to view alternatives to satellite and cable television platforms, it also has a responsibility to the majority of digital television homes that have chosen a pay television service.

For its part, Virgin Media, which currently carries a version of the iPlayer service on its cable television platform, has welcomed the intervention of the Competition Commission in the aborted Kangaroo venture. It said “It is important that any future initiatives involving an aggregation of this strategically critical content receive equally rigorous scrutiny.”

Virgin Media said it “notes with interest the BBC’s recent Canvas proposals to create a set of technical standards and, it is suggested, a common user interface for the IP delivery of on-demand programming to the TV.”

“While Virgin Media acknowledges the potential consumer appeal of this proposal, it is not yet clear how the BBC and its partners propose to address critical elements of the service,” it said.

Specifically, it said that it is important that the standards are compatible with cable, as well as satellite and terrestrial television platforms, noting “It is not currently clear whether or not this is envisaged.”

Virgin said the initiative should not “develop in a way that gives the BBC and its partners control, or the ability to exert undue control, over a standardized universal interface.”

The cable company said it is important that “Any such technical delivery mechanism does not become an interface or exclusive ‘gateway’” to catch-up and archive programming from public service broadcasters.

“On the contrary,” Virgin Media observed, “any such content delivered through such an interface should be made available to competing platforms on fair and nondiscriminatory terms.”

In addition to “a rigorous and objective assessment of its impact on other operators and the market as a whole” from the BBC Trust, Virgin Media said it “would welcome wider regulatory scrutiny of the potential implications of Canvas for competition.”

With Canvas, the BBC has the opportunity to lead and involve the industry in creating a genuinely open cross-platform specification for broadband video services that will benefit the market in general.

The responses from Sky and Virgin Media suggest that unless it involves the wider industry, the BBC Canvas project could well face the same competition concerns that killed Kangaroo.

In my view the BBC has no role in spending licencees money in an area which is clearly the domain of the IPTV industry developers.