Blank canvas please
Project Canvas is a collaboration between the BBC, ITV, Channel 4, BT and Talk Talk, with the stated aim: "...to develop and promote a common standard that would allow viewers with a broadband connection to watch on their television sets on-demand services, such as the BBC iPlayer or the ITV Player, and other internet content, as well as ordinary linear television content."
Just before Christmas the BBC Trust, which exists to oversee now the license fee is spent, provisionally approved the Beeb's involvement in the project, saying: "...the likely public value of the proposal justifies any potential negative market impact."
Sky, which competes with both the TV and ISP companies in the consortium, doesn't agree. Today it has published its formal response to the BBC Trust's provisional approval and it starts by saying that it thinks the Beeb's participation in Project Canvas will distort the market. This is related to its complaints which contributed to the strategic review announced earlier this month.
The issue is that, funded as it is by the license fee, the Beeb doesn't face the same commercial pressures as Sky and thus has an unfair competitive advantage. By collaborating with commercial operations it extends that advantage to them, Sky argues.
Notwithstanding that stance, Sky argues the BBC Trust has understated the market impact of Project Canvas and says the only way to level the playing field is for the supposedly common standard developed to be made available to the rest of the industry via the DTG digital TV industry association. This opening-up needs to be unconditional and without the need for "onerous arrangements".
Sky also reckons the Trust hasn't fully understood competition law and state-aid law. "...it is wholly inappropriate for the BBC to act as a lending bank to commercial broadcasters. The Trust should prohibit the Executive from funding participation by third parties in the venture," concludes the response.