Britain's media regulator Ofcom said on Tuesday it would investigate the pay TV industry, dominated by BSKyB, and decide whether the market should be referred for scrutiny by competition regulators.
Ofcom said it had received a request to investigate the pay TV market from BSkyB's smaller rivals BT Group, Ireland's Setanta, Top UP TV and Virgin Media.
Ofcom said consumer groups had also raised concerns about one aspect of the market -- the loss of BSkyB channels on Virgin Media's pay TV platform.
"After careful consideration, Ofcom has today announced that it will investigate the pay TV market, including obtaining information from market participants," the regulator said in a statement.
"Following this assessment Ofcom will decide whether to make a market reference to the Competition Commission."
The investigation covers subscription and video-on-demand television services on cable, digital terrestrial television (DTT), satellite and TV over the Internet.
Ofcom said it would also look at the implications for consumers and competition of BSkyB's move into the pay DTT market. Last month, BSkyB said it would remove three of its free channels -- Sky News, Sky Sports News and Sky Three -- from the popular digital platform Freeview to make way for subscription-based channels that will show its Premier League soccer, entertainment and movies.
Ofcom has already said it would review a number of issues including whether this would "unacceptably diminish the appeal" of the Freeview offering and whether a reduction in the range of free-to-air channels would be compensated for by the proposed introduction of the new pay-TV channels.