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More Sky Woe: Forced To Offer Channels, Picnic Cleared Posthumously

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All Sky’s regulatory inquiries are coming home to roost. In two new Ofcom rulings today…

New pay-TV rules: The regulator plans to force BSkyB (NYSE: BSY) to offer its core channels at fair prices to rivals like Virgin Media (NSDQ: VMED) by regulating their wholesale distribution. This will likely lead to the reintroduction of Sky 1 et al to Virgin after last year’s spat. The inquiry – kicked off in October when Virgin, BT, Setanta and TopUp TV cried fowl to Ofcom – found Sky’s approach reduced consumer choice and retail innovation. The obligation may also fall on Setanta. Ofcom rejected the idea of splitting Sky’s wholesale and production businesses; it invited consultation on its suggestion.

Picnic cleared: Ofcom has cleared Sky’s application to run a pay-TV platform, Picnic, on top of Freeview, which it said would have “an immediate, positive effect” on the platform” – but only if it uses a pay access system that rival operators can connect with, and only if Sky acts on the wider pay-TV inquiry. The green light is highly ironic – Sky already picked up its ball and packed up its Picnic earlier this month, shutting the upcoming service before its even started, citing Ofcom delays.

All this follows yesterday’s ruling on its ITV (LSE: ITV) stake…

ITV stake: The Competition Appeals Tribunal rejected Sky’s appeal against the Competition Commission’s earlier ruling it must slim its 17.5 percent stake down to under 7.5 percent . The satcaster bought its 17.5 percent stake at 135p per share for £940 million two years ago, only to have it ruled anti-competitive. It took a £131 million impairment charge against the investment in its earnings for the nine months to April. Now ITV