French competition body questions FT pay-TV plans

8 Jul 2009

France’s competition council yesterday ruled that internet service providers’ (ISPs’) so-called ‘exclusive content policy’ must remain an exception and not the rule, and furthermore, must be ‘limited in time and scope’, Dow Jones reports. The decision it says, raises doubts about the future of France Telecom’s (FT’s) business model for its Orange Sport pay-TV channel. Back in January this year, the government asked the council to render an opinion on whether or not ISPs position on exclusive content violated competition rules and decided that the exclusive distribution of broadband providers’ TV channels should be limited to one or two years. At the end of the minimum term, the council says such channels should be distributed more widely.

The ruling was greeted coolly by FT. In a statement the company said: ‘The council’s opinion will lead us to adapt the economic model of our content services,’ before merely adding ‘The opinion validates Orange’s strategy to invest in innovative content’. FT bought the rights to broadcast football matches on its Orange Sport channel, which was launched in August 2008 and is only accessible through the group’s triple-play offers. However, rivals such as Iliad (Free) and Vivendi-backed SFR (including neuf Cegetel) complained in court that the move was unfair as it was available only to FT’s broadband subscribers. In February 2009 the courts asked the former monopoly to stop offering broadband packages with an exclusive link to Orange Sport, but the operator overturned the decision by appeal in May. At the end of March 2009 FT had 363,000 subscribers for its Orange football channel and Orange cinema series, another channel launched in November 2008.

Although the competition council’s ruling is not legally binding, it carries weight with the government which has been called on to legislate on the issue.

France, Orange Group