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Project Canvas to face OFT investigation

BBC, BT and ITV VoD venture under scrutiny

The Office of Fair Trading (OFT) will investigate Project Canvas, the digital TV service that will provide a broadband-connected digital television receiver, following concerns from other broadcasters including BSkyB and Virgin Media.

ITV, Channel 4 and Five has joined the BBC venture, along with ISPs BT and TalkTalk and Arqiva, the firm behind online catch-up TV service SeeSaw.

Project Canvas has already been given a preliminary go-ahead by the BBC Trust and will allow users to watch catch-up TV services such as the BBC iPlayer as well as standard TV services over an internet-connected set-top box.

The OFT investigation, which is expected to be launched this week, will identify whether the venture reaches the 'merger threshold' and threatens competition in the industry.

If the OFT believes the threshold has been met, a number of changes that address the concerns will need to be implemented. Alternatively, the venture could be referred to the Competition Commission for further investigation.

The investigation will begin with a consultation period, which will last several weeks, and will see competitors given a chance to voice their views on the project.

The BBC has already told the OFT the venture does not qualify as a merger.

"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," said the BBC's project director for Project Canvas, Richard Halton.

The BBC Trust said it would hold off on publishing its final conclusion on the Project the OFT had released the findings of its investigation.

"In order to ensure that any potential conclusions from the OFT's processes can be taken into account in the trust's own decision, we will await the OFT's findings and will publish our final conclusions on Project Canvas later this spring," said the BBC Trust.

See also: Virgin slams BBC Trust Project Canvas investigation

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