Sky & Project Canvas

Sky has said that BBC-led joint venture Project Canvas will use public money to distort competition in the nascent market for broadband-enabled set top boxes.

The satellite platform holder yesterday published its second formal submission to the BBC Trust in reaction to the additional information recently supplied by the BBC Executive.

In the report, Sky stated its belief that the BBC's plan for Canvas confirms its "apparent intention to develop, launch and operate an entirely new content distribution platform together with a limited number of competitor venture partners, for mutual benefit, to the exclusion of other industry participants".

Sky claimed that the development of a Canvas IPTV platform goes beyond the BBC's role as defined in the Royal Charter. It therefore asked the Trust to properly consider whether the proposals are an appropriate use of the licence fee, or if there is adequate consumer demand for a Canvas box, before granting its approval.

"In its unique, privileged position in receipt of substantial guaranteed public funding, the BBC is also required to adopt the least intrusive, proportionate means of fulfilling its core purpose, and to minimise any distortions of competition that might arise from the commercial deployment of its public funding," said Sky in its report.

The company is further concerned about Canvas membership - BBC, Five and ITV - due to fears that only public service broadcasters will be permitted to join, with BT's participation only complicating the issue.

This complaint taps into Sky's fears that Canvas partners will favour their own content on the platform when it launches to the detriment of other services. In turn, it reiterated concerns about control of any Canvas user interface or EPG, particularly due to the "standardisation" of this feature which could reduce innovation and competition.

Sky further criticised the lack of technical specification in the BBC Executive's released information, which poses questions about whether Sky Player would work on the box and what sort of content protection would be available. It also questioned how much public money is actually being spent on developing the project in the absence of confirmed figures.

As an alternative approach, Sky believes that the BBC should drive forward development in the IPTV market by implementing a "genuinely broad policy of linear and on-demand content syndication across third-party platforms and services".

Back in August, BBC programme director, IPTV Richard Halton accepted that the open source platform of Canvas could be viewed as an "absolute disaster" for pay TV providers.

However, he stressed that the platform would be designed to maximise creative freedom for a wide variety of service providers, and not prioritise the content of its partners as it would be "very naive for us to do something so obvious".

http://www.digitalspy.co.uk/digitaltv/news/a181777/sky-publishes-canvas-criticisms.html

Project Canvas partners BBC, ITV, BT and Five have defended their plans for the IPTV joint venture by stressing that it will be an "open platform for the next-generation of internet-connected TV devices".

Yesterday, Sky published its second formal submission on Canvas to the BBC Trust, in which it criticised the corporation for using public money to distort competition in the nascent market for broadband-enabled set top boxes.

Writing on the BBC Internet Blog, director of Canvas Richard Halton said that the proposed IPTV offering would not be a "BBC platform". Instead, he explained that the service would be open for all content owners, internet service providers and device manufacturers to get involved.

Halton said that the Digital TV Group is currently developing a standard for web-connected TVs, and so the BBC wants Canvas to be "compliant" with that, rather than influence it.

Sky expressed concern that the majority involvement of public service broadcasters in Canvas would create a bias for their content on the platform to the detriment of others.

However, Halton welcomed any service providers, including Sky, to take part in Canvas as long as their "ambitions for a free-to-air platform and open competition match ours".

Despite its subscription-free model, Halton explained that Canvas would support a "range of monetisation options", meaning that Sky could increase the reach of its Sky Player service by using the platform.

"Canvas is in addition to, not instead of, the syndication ambitions of all of the existing partners. Making content widely available is fundamental to the economics of free-to-air content providers and Canvas adds to the range of options available," he said.

"As a platform, it is intended to reduce the barriers to accessing the television set that some content providers already experience."

Halton also indicated that Canvas will fall in line with the BBC's Royal Charter remit to always effectively use the licence fee to maintain and expand public service broadcasting.

"Public service or not, we can all contribute to supporting a Digital Britain: be it in increasing the availability of online services such as NHS Direct, helping to drive broadband uptake by delivering service innovation or by investing to ensure that our subscription-free TV platforms continue to evolve," he concluded.

"The BBC thinks that Canvas is central to delivering these aims and is keen to work with partners who believe the same."

The Trust is expected to issue its final conclusion on the BBC's involvement in Canvas this autumn.
http://www.digitalspy.co.uk/digitaltv/news/a181816/canvas-partners-respond-to-sky-criticism.html