Project Canvas clears OFT hurdle

Joint venture with BBC, BT, Channel 4 and others edges closer towards your TV

Joint venture with BBC, BT, Channel 4 and others edges closer towards your TV

IPTV initiative Project Canvas has been given the thumbs up by Office of Fair Trading (OFT), paving the way for a launch later this year.

Canvas is a broadcast industry initiative aimed at creating a platform for bringing on-demand content to the UK's televisions for free through new broadband-enabled set-top boxes.

Users of the set-top boxes will be able to access online and on-demand content directly through their television using a bespoke interface. In addition, Canvas is connected to the internet so there's also the potential for users to access other online applications.

The joint venture (JV) - which was first announced in December 2008 - now has seven partners: BBC, Channel 4, Five and ITV, ISPs BT and Talk Talk, and broadcast infrastructure company Arqiva.

The BBC has contributed much of the research and technical development to the project with the other partners mainly contributing financially.

Canvas was referred to the OFT by its participants in March in order to have the project formally recognised as not representing a merger after Arqiva announced it would take a stake in the project.

The OFT OK'd the project on the grounds that it doesn't qualify for investigation under the merger provisions of the Enterprise Act 2002. This is because none of the partners are contributing pre-existing business to the project or aggregating, marketing or directly retailing any of their television content.

Canvas screenshot

How Canvas might look
(Image credit: BBC)

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

The precautions taken by the Canvas partners are likely to have stemmed from lessons learned after the BBC Worldwide, Channel 4 and ITV-led online TV joint venture Project Kangaroo was blocked by the Competition Commission in 2009. Kangaroo was deemed to place too much control of content and distribution in the hands of the broadcasters.

Incidentally, the technology developed for Kangaroo has now seen the light of day as Arqiva bought the rights to Kangaroo, launching it as SeeSaw in February this year.

The BBC's independent regulator, the BBC Trust gave its provisional approval to the Beeb's participation in Canvas in December last year and is expected to publish its final conclusions in the coming weeks.

In response to the OFT decision, a BBC Trust statement said: "As we said when the proposals were submitted to OFT by the Canvas partners, we would await the OFT's decision before reaching final conclusions on Project Canvas. We will now proceed with concluding our assessment and will publish our final conclusions as soon as possible."

Project Canvas director Richard Halton said: "The Project Canvas partners welcome the decision from the OFT, which confirms our analysis and sets the scene for the final stage of the regulatory process."

To find out more on the potential impact of Canvas on the future of TV check out Inside Project Canvas: Bringing broadband TV to the masses on