Ofcom has warned the BBC Trust its assessment of the BBC’s Project Canvas proposal may have to be followed by an Office of Fair Trading inquiry, raising the horrible prospect of it being struck down like Kangaroo. The trust in March started an industry consultation, rather than its usual public value test, as the proposed open IPTV standard is considered merely a platform rather than an entire new service. That denied the proposal the usual scrutiny of the test procedure’s public value assessment and its market impact assessment, the latter conducted by Ofcom.

But the regulator’s submission to the trust’s consultation on the project says “there may be a future role for the OFT and/or Ofcom to assess the arrangement under relevant merger or competition law” - effectively suggesting the trust should have given it the opportunity to conduct the market impact assessment, as it did with ill-fated Kangaroo. The trust’s own assessment of Canvas’ market impact will be derived from submissions like Ofcom’s, discussions with stakeholders, consumer research and forecast modelling. Its “emerging” conclusions will be published by June 8, and a final conclusion by July 24.

I asked BBC director general Mark Thompson last month whether he feared wider competition scrutiny for Canvas. He said: “It’s an upgrade to Freeview, in a way that is open - in a way that does not raise the same kind of competition issues that Kangaroo did. I think it’s right there should be a consultation. I think the case for Canvas is very strong ... we’ll have to see what the BBC Trust makes of it.”

Conceived to ensure non-pay TV viewers of Freeview and Freesat can get VOD, Canvas would bring together set-top box makers, broadcasters and telcos to agree on ways to introduce TV channels’ catch-up, and possibly internet video and web content, to the coming generation of internet-connceted boxes and TV sets. It would cost the BBC £6 million over five years. See our full breakdown of the proposal.

The BBC has been keen to stress that, unlike Kangaroo, which was a formal JV of three companies designed to profit from archive content, Canvas merely invites industry players to the table to a common platform for public service access. Also, despite the concerns of Kangaroo rivals on competition grounds, the Competition Commission’s decision to block it outright is considered by many clever people to be flawed, arrived at through a failure to understand the model. Any referral to the OFT should spark a similar concern, but wouldn’t this time necessarily raise the same kind of competition issues.

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