BSkyB must share interactive TV technology

UK telecoms watchdog Oftel has ruled that BSkyB must allow other companies to use the encryption technology in its set-top boxes to provide interactive TV services.

Oftel's intention is to increase competition among interactive TV service providers, something BSkyB said it welcomed. But experts have questioned how effectively the watchdog can regulate such a fast-moving market and whether it should interfere at all.

Oftel said late Wednesday that the broadcaster's Sky Subscribers Services division, which supplies access control services to Open and to BSkyB, is in a dominant position and must allow other companies fair access so they can also offer interactive services to customers.

The encryption technology used by the division enables access to interactive services, such as financial information and home banking, and other ecommerce transactions via digital set-top boxes.

David Edmonds, director general of Oftel, said the watchdog's decision will encourage competition and choice for consumers in the provision of interactive services using digital TV sets.

"As digital TV becomes more widespread, it is important that different companies can provide new and exciting interactive services to consumers. But it is also important to ensure regulation in this area is only imposed when justified, otherwise competition and innovation could be stifled," said Edmonds.

BSkyB said it agrees with Oftel's ruling. "We have offered these services to others for a while. We believe, like Oftel, in the fairness of our open platform and the benefits of having multiple service providers," said a spokesman.

Despite this acceptance, analysts have warned that the interactive TV market will become difficult to regulate as network players begin to enter the content business. Determining what company owns what and what rights they have will become difficult to regulate.

Henning Dransfeld, an analyst at Ovum, said: "The market is increasingly difficult to regulate. The decision was designed to enable competition, which is a good intention. But how effective it will be is questionable. There are other standards in Sky's structure that are still proprietary and not regulated."

Other suppliers of access control services include ONdigital, Kingston Communications, NTL (which includes Cable & Wireless Communications' consumer business) and Telewest.