“David vs. Goliath” - Rapture lodges Appeal with Competition Commission Appeals Tribunal with reference to dispute with Ofcom about BSkyB

Rapture TV, the UK's leading independent youth entertainment digital channel which broadcasted a 24 hour a day youth entertainment channel on Sky Digital channel 193 until BSkyB removed the Rapture EPG listing on the 19th of March 2007, is to submit and Appeal against the CAT (Competition Appeals Tribunal) main ruling which was handed down on the 31st of March 2008.

Rapture's legal advisers, Orrick Herrington and Sutcliff and Michael Bowsher QC, will submit an Appeal to the CAT by 30th April 2008 at 4pm.

Rapture TV believes that BSkyB is charging excessively high fees for the supply of an EPG (Electronic Programme Guide) service on the DSat platform, which include costs that are nothing to do with the cost of supplying a technical service.

Rapture TV contends that BSkyB is failing to provide the EPG Service on a cost-oriented basis and that this may be regarded as a breach of paragraph 15(A) of the Code of Practice on Electronic Programme Guides.

It is a requirement of the Communications Act 2003 that BSkyB must enter meaningful commercial negotiations with other network providers.  Rapture TV has submitted evidence that BSkyB failed to enter meaningful commercial negotiations.

Rapture TV was unable to submit new evidence to the CAT that came to light too late for the initial Appeal notice. Ofcom is required under several EU Directives to ensure that BSkyB supplies the EPG to all parties on a Fair Reasonable and Non-Discriminatory basis. Ofcom is also required to investigate the basis of the fees that BSkyB are charging third parties for technical services.

Part of Ofcom’s duties is to ensure that there is cost separation from all other non-technical activities. The EU Directive 2002/21/EC requires separation of costs for network services and requires the national regulators to ensure that separate accounts are kept as if the services were supplied by legally independent companies.

Ofcom has thus far failed to ensure this requirement is met and instead based its whole dispute investigation on a confidential ‘Sky Platform Model’, which neither separates the technical costs and is not up to date and has not been independently verified. Rapture believes that this fact leaves the burden of proof on BSkyB to prove that its technical costs are economic and do not include costs for non technical services.

The Rapture Appeal ruling laid the burden on Rapture to prove that the costs were too high but with out access to the Sky technical costs this was an impossible task. Ofcom also failed to investigate the issue of Sky’s Set Top Box subsidies and how the highly promoted ‘Free’ Sky box offer is only available to consumers who sign up to a Sky Pay TV subscription. This fact was not investigated by Ofcom and Ofcom made no reference in the Rapture dispute Determination document.

David Henry Rapture TV’s managing director said, “Rapture TV hopes that a successful Appeal will allow all the facts to be re-examined and for a true FRND price for the EPG to be found.” He added, “Its clear there is a public interest case to answer”.

Currently BSkyB demands over £79,000 per free to air channel per year.  Rapture TV believes the true cost of providing the service is closer to £625 per month per 'free to air channel'.  If the investigation finds that Rapture TV is correct then it could lead to a more competitive market place, increasing consumer choice and prevent further anti-competitive or restrictive practices. Ultimately the British citizen will benefit from more viewing choice. British TV broadcasters will benefit from having reduced running costs.

Rapture Television PLC

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