1. This Direction is issued pursuant to the Commission's powers under Condition 9 and Condition 12 of the Licence.
Condition 9 reads:
"The Licensee shall:
a) not engage in any practice which is prejudicial to fair and effective competition in the provision of licensed services and services connected with them; and
b) comply with any Direction from time to time issued by the Commission to the Licensee for the purpose of ensuring fair and effective competition in the provision of licensed services and services connected with them."
2. The Licence also contains a Condition requiring the Licensee to comply with any Direction given to him by the Commission in respect of any matter, subject or thing which direction is in the opinion of the Commission appropriate, having regard to any duties which are or may be imposed on it, or the Licensee, by or under the Broadcasting Acts. This Direction is also issued pursuant to that Condition. This is for the purpose of ensuring that a wide range of services is available throughout the UK.
3. The ITC hereby DIRECTS the Licensee as follows:
(A) Subject to paragraphs B and E to G below, with effect from 1 July 1998, the Licensee shall not enter into nor seek to enforce or observe any MCR.
(B) With effect from 30 September 1998, the Licensee shall not enter into nor seek to enforce or observe any Contract or contractual term which has the effect, either direct or indirect, of preventing subscribers from buying on an a la carte basis from any package of Basic Channels any Premium Channel available to the Licensee and any Premium Channel offered by the Licensee to subscribers must be made available to them on an a la carte basis in combination with any package of Basic Channels.
(C) In the terms on which the Licensee contracts, or offers to contract for the distribution of a Channel or in any attendant circumstances including but not limited to the marketing and positioning of the Channel, the Licensee shall not show undue discrimination either against or in favour of a particular person providing the Channel (which for this purpose may include the Licensee itself) or a class of such persons providing Channels.
(D) Where the Licensee develops, markets and retails Channels to subscribers, it shall conduct research into viewers' references for and satisfaction with package sizes, compositions and prices at regular intervals and make this available to the Commission. The Licensee shall provide to the Commission a statement explaining the extent to and the manner in which it has taken into account the market research when considering what packages to offer to subscribers and potential subscribers.
(E) MCRs contained in existing Contracts insofar as they relate to the distribution of a Channel for reception in analogue form may be enforced or observed up to 1 January 2000 or until expiry of the relevant Contract, whichever is the earlier.
(F) MCRs relating to the launch of New Channels may be entered into and enforced or observed for up to twelve (12) months from the commencement of the Contract to which they relate.
(G) MCRs contained in Contracts which relate to exclusive carriage on one platform which were entered into before 1 April 1998 may be enforced unless and until the Commission indicates otherwise by notice to the Licensee. The Commission shall decide whether to issue such notice on a case by case basis in accordance with its duties.
4. Failure to comply with this Direction shall be a breach of the Licence.
5. For the purpose of this Direction:
"a la carte basis" means that a Channel may be individually subscribed to on terms and conditions which are independent of those relating to the supply of any other Channels by the Distributor to the subscriber.
"Basic Channel" means a Channel other than a Premium Channel.
"Bonus Channel" means a Channel that is available free of charge when a particular Channel with which it is connected is subscribed to.
"Channel" means a television programme service, a satellite television service or a digital additional service, as defined in the Broadcasting Acts 1990 and 1996, licensed by the ITC pursuant to those Acts with the exception of services provided by the Channel Four Television Corporation, or under a Channel 3 licence or any terrestrial broadcast services for analogue reception provided under a Channel 5 licence.
"Contract" means any contract, agreement, arrangement or other understanding howsoever recorded.
'MCR" means any contractual term which by itself or in conjunction with other terms in the same or similar contracts, has the effect, either direct or indirect, of preventing, restricting or distorting a Distributor's ability to develop, market and retail packages of basic Channels offered to a subscriber or a group of subscribers in the UK.
"New Channel" means any Channel not previously provided which contains new content or a new compilation of content save to the extent that the Commission indicates by notice that it believes such a Channel is substantially similar to an existing or previously existing Channel and considers it not to be a New Channel.
"Premium Channel" means a Channel offered by the Distributor for which a separate fee is payable by the subscriber in addition to the fee payable for Basic Channels offered by the Distributor. For the avoidance of doubt, Premium Channels do not include Bonus Channels.
"Distributor" means a person who supplies Channels to subscribers, recruiting such subscribers to those Channels, collecting subscriptions from them and performing ancillary management functions in relation to such subscribers.
SIGNED FOR THE INDEPENDENT TELEVISION COMMISSION BY