Britain's consumer watchdog is to investigate plans for a proposed joint venture aimed at giving Internet access to digital TV in a move that will allow critics such as pay-TV firms to voice concerns.
Project Canvas plans to bring video on demand programing without subscription to viewers. Its backers include the BBC, commercial groups ITV, Channel 4 and Five, and telecoms groups BT and Talk Talk.
It said on Monday the infrastructure group Arqiva would also join the proposed venture.
An earlier attempt at forming a joint video on demand platform between the BBC, ITV and Channel 4, called Project Kangaroo, was dropped after the Competition Commission blocked it to prevent it from becoming too powerful.
The OFT said it would investigate whether the plans could result in a merger situation and if that would lead to a substantial lessening of competition within any market in Britain. It could then be referred to the Competition Commission.
The Project Canvas group have submitted their plan to the Office of Fair Trading, saying the proposed venture did not constitute a qualifying merger and should be allowed.
However, pay-TV groups BSkyB and Virgin Media have already said they had concerns about the project and this referral should allow them and others to argue their cases.
The Canvas partners are clear that the joint venture does not qualify as a merger, and we welcome the opportunity to clarify this position formally, Project director Richard Halton said in a statement.
(Reporting by Kate Holton; Editing by Dan Lalor)