Walk down any street in the country, and you’re bound to see a Sky dish. With subscribers still increasing, a viewing target of 10 million by 2010 and revenue increasing to £1.4 billion, it seems that Sky TV is hardly suffering from the current ‘challenging conditions’ besetting so many firms.
Enter Ofcom, the independent regulator and competition authority for the UK’s communication industries that has been investigating the UK Pay TV industry since 2007. A consultation was published on the 26th June 2009 in which Ofcom indicated that BSkyB should be forced to make its premium sports and film channels available to rival broadcasters in a bid to ‘promote choice and innovation’. The articles below look at this conflict.
Sky may have to share TV channels BBC News (26/6/09)
Ofcom may set Sky’s wholesale prices Digital Spy, Andrew Laughlin (25/6/09)
Ofcom proposes measures to improve competition in pay TV Ofcom (26/6/09)
Pay TV Phase three document: Proposed remedies Ofcom Consultation (26/6/09)
BSkyB in war of words with Virgin Media and BT Guardian, Leigh Holmwood (24/6/09)
BSkyB keeps Premier League rights BBC Sport, Football (3/2/09)
Sky will fight Ofcom over Premium TV Tech Radar, Patrick Goss (26/6/09)
Pay TV market investigation: Consultation document Ofcom (18/12/07)
Sky asked to open up Premium sports and movies Times Online, Peter Stiff (26/6/09)
All believers in a competitive market must back Ofcom to take on Sky Telegraph, Neil Berkett (26/6/09)
Ofcom: Sky not playing fair with premium content Tech Radar, Patrick Goss (26/06/09)
Questions
- How well does BSkyB fit into a monopoly position for its premium content?
- What are the regulatory options open to Ofcom?
- How does Ofcom aim to introduce more competition and fairer prices into the Pay TV market?
- Why is it argued that competition is in the public’s best interest? Do you agree with this, or should BSkyB be allowed to carry on as it is?
- What has enabled Sky to become such a dominant force?
- How do you think the collapse of Setanta will affect this debate?
- Sky TV has seen its profits continuing to grow. Given that we’re in a recession, what does this tell us about Sky and the type of good or service that it supplies?
In a major break from the policy of the Bush administration, President Obama has announced that the US government will regulate greenhouse gas emissions. The US Environmental Protection Agency has found that CO2 emissions pose a ‘threat to public health and welfare’. This finding allows regulation to be imposed.
At the end of March the Democrats in the House of Representatives released a draft climate change Bill. Central to this would be a system of tradable permits. ‘Under this program, covered entities must have tradable federal allowances for each ton of pollution emitted into the atmosphere.’ (See 4th article below.)
U.S. in Historic Shift on CO2 Wall Street Journal (18/4/09)
Obama to regulate ‘pollutant’ CO2 BBC News (17/4/09)
US says CO2 is a danger to human health Financial Times (18/4/09)
House releases draft climate change bill Power Engineering International (31/3/09)
U.S. Carbon Emissions Trading Core of Clean Energy Bill Environment News Service (31/3/09)
Environmental Capital (see also) Wall Street Journal (31/3/09)
Who’s going to get the carbon pollution credits? Christian Science Monitor (14/4/09)
Questions
- To what extent is the EPA ruling compatible with the bill proposed by the Democrats?
- Is a ‘cap-and-trade’ system (i.e. tradable permits) the best way of dealing with climate change?
- What lessons can the USA draw from the European Emissions Trading Scheme in designing its own tradable permits scheme?
In recent years Labour has taken what might be described as a light-touch on regulation of City firms and financial institutions. In the article below the economics editor of the Guardian, Larry Elliott, argues that this ‘pact with the devil’ might have come back to haunt Gordon Brown as the impact of the global credit crunch continues to dominate economic news.
Brown damned by his Faustian pact Guardian (12/5/08)
Questions
| 1. |
What form has regulation of the financial sector taken under the Labour government? |
| 2. |
Assess the extent to which this regulatory approach could be considered a ‘Faustian bargain’. |
| 3. |
Discuss the extent to which tighter regulation of financial markets might have helped the UK economy avoid the impact of the global credit crunch. |
Public choice theory is an area of economics that uses standard economic tools to consider the decisions made by politicians and others within the public sector. In essence the theory applies economic principles to politics. In the article below Simon Caulkin argues that public sector reform and the application of public choice theory has failed and likens the public sector reforms that have been implemented to Soviet central planning.
Labour’s public sector is a Soviet tractor factory Observer (4/5/08)
Questions
| 1. |
Explain what is meant by public choice theory. |
| 2. |
Describe the principal public-sector reforms that were implemented under the Blair government. |
| 3. |
Discuss the extent to which recent public-sector reforms have succeeded in delivering a more responsive and efficient public sector. |
The Civil Aviation Authority (CAA) – the regulatory body for Britain’s airports – has allowed the main airport operator BAA to increase substantially the landing charges it levies on airlines. The airlines have reacted angrily and argued that the higher charges will simply be passed on to passengers in the form of higher fares.
Q&A: Airport landing fees BBC News Online (11/3/08)
BAA to raise airport landing fees BBC News Online (11/3/08)
Fares will rise as fees cap is lifted Guardian (cartoon) (12/3/08)
Fares will rise as fees cap is lifted, airlines warn Guardian (12/3/08)
Video
BAA to raise landing fees BBC News Online
Questions
| 1. |
Explain the regulatory system in operation for the control of landing fees at UK airports . |
| 2. |
Explain why the CAA has increased the landing fees that BAA can charge for planes landing at UK airports. |
| 3. |
Is raising landing fees an efficient method of internalising the externalities associated with air travel? |
| 4. |
Evaluate the extent to which the higher landing fees will be passed on to airline passengers. Use diagrams as appropriate. You may also like to consider the relevance of the price elasticity of demand for air travel in determining the extent to which the higher landing fees can be passed on by the airlines. |