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Virgin Media wants to kill Project Canvas with complaint to Ofcom

Virgin Media has filed a complaint to Ofcom against Project Canvas, claiming the open Web TV platform will destroy its profits -- sorry, we mean "consumer choice"

Virgin Media has put down its cocktail long enough to file a complaint against Project Canvas, the BBC-led consortium developing a free-to-view Web TV standard. Virgin reckons Canvas is anti-competitive, and is too closed-off to allow others in the broadcast industry to give every company their own distinctive branded version.

There are two versions of this story: Virgin Media -- and BSkyB -- are top-hatted, money-grubbing profiteers trying to crush Auntie Beeb's plucky open-standard pals. Or they're consumer champions questioning how the project's open principles have become a closed-off system, funded by the regressive tax that is the licence fee. Which take you prefer has much to do with how you feel about the licence fee and paying for your telly.

What is Canvas?

Project Canvas is a partnership between the BBC, ITV, C4, BT and TalkTalk to develop a platform for watching free TV over the Internet. Troubled Five recently pulled out. When it's ready, Canvas will be given a brand name -- YouView is being bandied about -- and beamed into your house to a set-top box via your broadband connection. Essentially, Freeview over the Web. Crucially, the project will create an open standard for Web TV, something sorely lacking in the current fragmented market. Sounds great, right?

So what's the problem?

Virgin Media and Sky aren't keen. Virgin has asked broadcast regulator Ofcom to investigate the project this week. Virgin claims Canvas is "anti-competitive, restricts consumer choice and jeopardises the future development of next-generation TV in the UK." Virgin told us it isn't opposed to Canvas on an ideological level, but objects to the specifics of the user interface, and the anti-competitive nature of the partnership.

User interface: the Android analogy

Virgin draws a comparison between Canvas and Android, the mobile operating system developed by Google and used by a wide range of manufacturers to power their phones. Android provides a back end and allows manufacturers such as Samsung and HTC to decide how they want their phones to look and feel.

Virgin argues Canvas has locked these elements down, and it wouldn't be able to put its own user interface on the front end of the finished product. This would also, it claims, dissuade hardware manufacturers such as Sony and Panasonic from building Canvas into their kit, as they have with Freeview.

The Canvas partners need to take this seriously: it would be a shame of epic proportions if Canvas failed because everybody involved got in a strop over the look of the user interface.

Canvas = cartel?

Virgin Media also objects to the fact the partnership involves the UK's biggest broadcasters (BBC, ITV and C4 provide 75 per cent of telly watched) and ISPs (BT and TalkTalk make up more than half of the broadband market). It argues that these companies should be competing, not colluding, and that they will treat each favourably over latecomers to the project. To which we say: "whatevs". The BBC is by its very nature anti-competitve, and that's what makes it great.

Should our licence fee fund Canvas?

The BBC's involvement means Canvas is partly funded by the licence fee. Virgin and Sky don't like that, but then they're the ones who argue the BBC shouldn't be allowed to provide its peerless free online services. No matter how much they bang on about "consumer choice", your experience as a consumer is only a priority at Sky central and Virgin villas if your direct debits go their way.

We believe developing open standards is something the BBC absolutely should be committed to. We'd even argue commercial broadcasters should be encouraged to work together towards open standards, rather than censured for doing so. Compete on price, compete on quality, but don't compete by creating a fragmented market full of closed-off systems.

We're more than happy to pay our licence fees -- and this Craver doesn't even own a television -- although not everyone agrees, with economic thinktank the Adam Smith Institute suggesting yesterday that it be replaced by a subscription model. But the licence-fee funding does mean Canvas comes under some pretty rigorous public oversight from the BBC Trust, which recently reinforced the open principles of the project. We're more interested in Canvas' principles than Virgin Media's profits, so we're hoping Virgin's arguments about competition won't be allowed to outweigh the benefits of Canvas to you, the consumer.

What's next?

Ofcom has two months to decide whether it will formally investigate Canvas. Virgin hopes the Office of Fair Trading will also get involved, although it has already declined to do so as there isn't a merger involved. Hopefully those at Canvas will address the user-interface issues and send Virgin and Sky scurrying back to the drawing board for another fiendish plan to torpedo the whole thing.

If anyone can, Canvas can

Project Canvas is, in our never-humble opinion, A Good Thing. But it's got a way to go, so we'll probably see more hissy fits from Virgin Media, Sky and the rest as they try to protect their profits. Meanwhile, the BBC and the Canvas partners need to keep their eyes on the real prize: creating the best result for the consumer. If the whole thing falls apart because of an argument over the colour of the EPG we're going to do our collective nut.