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"Ofcom has ordered Sky to cut the price of its premium sport channels, but has also given a provisional greenlight to the Picnic service on digital terrestrial television. Following a three-year consultation into the pay-TV industry, the regulator has ruled that Sky must offer Sky Sports 1 and 2 to rival operators, such as Virgin Media and BT Vision, at 23.4% below the current price of \u00A313.88 to just \u00A310.63 per subscriber per month.  As most consumers currently purchase packages including both channels, the wholesale price for service bundles has also been reduced by 10.5% from \u00A319.15 to \u00A317.14. Interestingly, Sky must also offer the high definition versions of Sky Sports 1 and 2 to rivals, but Ofcom will not set the prices after accepting that HD is a relatively new innovation. Instead, Sky must make the channels available on &amp;quot;fair, reasonable and non-discriminatory terms&amp;quot;. The pricing model is effective immediately, with Sky now having six weeks to provide a template contract for other pay-TV providers.  However, the satellite broadcaster now intends to appeal directly to the Competition Appeal Tribunal to delay implementation of the ruling. In a statement, a Sky spokesperson said: &amp;quot;There should be no doubt that Ofcom&amp;#039;s actions represent an unprecedented and unwarranted intervention.  &amp;quot;This is a marketplace where customers are well served with high levels of choice and innovation. Consumers will not benefit if regulators blunt incentives to invest and take risks.  &amp;quot;After three years of engagement with Ofcom, we now look forward to a judicial process which will apply impartial analysis and clear legal standards.&amp;quot; Also in today&amp;#039;s ruling, Ofcom has given conditional approval to a request from Sky and transmission firm Arqiva to offer pay-TV services on DTT under the initiative known as Picnic. However, the approval of Picnic is dependent on Sky adhering to the wholesale deal for Sky Sports 1 and 2. Ofcom believes that Sky has &amp;quot;market power in the wholesale provision of premium channels&amp;quot;, which prevents fair competition and limits consumer choice. It said that the principle benefit of cutting the price of Sky Sports 1 and 2 would be Premier League football being made available to around 10 million UK homes with Freeview on their main TV set. Following the changes, the regulator estimates that up to 2m additional customers will receive Sky Sports 1 and 2 by 2015.  Ofcom said that the resulting increased competition in the pay-TV industry would also bring fresh investment in services and a wider range of innovations for consumers. It now expects to see more bundling of premium channels with broadband and phone services. The watchdog further believes that Sky is hindering fair distribution of premium movies by its &amp;quot;ineffective exploitation&amp;quot; of subscription video on-demand rights. However, Ofcom&amp;#039;s powers are insufficient to fully address these concerns and so it is conducting further consultation on referring the situation to the Competition Commission. The consultation will run until May 15, with a final decision due before summer.  "^^<http://www.w3.org/2001/XMLSchema#string>
<http://www.digitalspy.com/tech/news/a211678/ofcom-orders-sky-sports-1-2-price-cut/>