IP Vision Files Complaint With Ofcom Over Project Canvas

IP Vision Wednesday said it has lodged a complaint with communications regulator Ofcom over Project Canvas, a six-party joint venture to bring Internet content and new video-on-demand services to U.K. television that is due to launch in the first half of 2011.

IP Vision is the second company to file a complaint against Canvas after cable-television and Internet provider Virgin Media Inc. (VMED) did so at the beginning of the month.

"We are all in favor of healthy competition that benefits both the industry and consumers ... but this group of industry Goliaths, supported in part by BBC license fee funds, will have the power to dominate the sector," said Eddie Abrams, IP Vision's chief executive.

IP Vision delivers multichannel digital TV and video on demand entertainment using "Over The Top," or OTT, technology meaning it doesn't have to go through other networks and can be branded for affiliated companies.

In his letter Wednesday to Ofcom Abrams elaborated on IP Vision's concerns previously voiced during the BBC Trust's Canvas consultation, namely that Canvas if unchecked will, he said, distort the market and unfairly benefit from absolute control over the user experience for millions of viewers, with little incentive for innovation and unfair access to and control over some of the most popular content available.

"The removal of competition between the Canvas joint venture partners with respect to platform, application and service development for the delivery of video content to broadband-related TV devices restricts competition in the market in general," said Abrams.

Virgin Media has also argued that Project Canvas is anticompetitive, restricts consumer choice and jeopardizes the future development of next generation TV in the U.K..

Project Canvas, which is a collaboration between the British Broadcasting Corp, ITV PLC (ITV.LN), BT Group PLC (BT.A.LN), Channel 4, TalkTalk Telecom Group PLC (TALK.LN) and Arqiva Ltd., said at the time of Virgin Media's complaint that it will discuss the grounds of any complaint by Virgin Media with Ofcom.

Other U.K. companies, including British Sky Broadcasting Group PLC (BSY.LN), are also thinking about lodging a protest with Ofcom, people familiar with the situation have previously told Dow Jones Newswires.

News Corp. (NWS), which owns Dow Jones & Co., the publisher of this newswire, has a stake of around 39.1% in BSkyB. .

-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com

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