Project Canvas edges closer to lift off

Internet television service Project Canvas is likely to be appearing over a broadband connection near you after being given the all-clear by the Office of Fair Trading.

Project Canvas – a partnership between the BBC, BT, Channel 4, Five, ITV, TalkTalk and Argiva – plans to offer consumers subscription-free access to TV programming and other digital services via the web.

The joint venture has required significant legal wrangling to bypass the UK’s competition regulations after an earlier project, Kangaroo, was blocked by the Competition Commission.

However, the OFT said because the Project Canvas joint venture partners were not bringing existing businesses together, the project didn’t need OFT clearance.

“Our investigation has confirmed that the partners, including the BBC, do not intend to transfer an existing business into the joint venture,” said Sheldon Mills, OFT director of mergers. “Therefore, regardless of the potential significance of Project Canvas for the future of internet-connected television, the notified proposals do not give rise to a merger qualifying for substantive investigation by the OFT.”

Bigger hurdles?

The ruling comes after Project Canvas itself submitted a request for the OFT to investigate its business model in relation to the Enterprise Act 2002. However, the judgement does not rule out a further investigation under competition law.

The initial decision is likely to prove unpopular with industry rivals such as Sky and Virgin, both of which have been hostile towards the new platform, which threatens their market share.

Virgin Media told PC Pro it did not oppose Project Canvas on principle, but thought the “closed-shop nature” of the joint venture meant it risked controlling the rights of consumers, especially concerning which hardware they could buy to access the service.

“As they stand, the Canvas proposals risk severely restricting competition and innovation in the UK’s digital media landscape,” a spokesperson told PC Pro.