Virgin Media 2008 Annual Report Download - page 26

further, more detailed, joint submission to Ofcom with BT, Setanta and Top Up in July 2007. Ofcom
published its first consultation document in December 2007 outlining its initial assessment of the pay
TV market. This was followed by a second consultation in September 2008 whereby Ofcom proposes to
address concerns about competition in the pay TV market by imposing a regulated wholesale
must-offer obligation on BSkyB in relation to specific premium sport and movie channels, including the
HD versions of those channels. We submitted detailed responses to both of Ofcom’s consultations.
Ofcom’s next formal stage will be to publish a further document based on the responses it received to
the second consultation. This is unlikely to be a final decision but should be determinative on the
majority of the issues. The exact timing of this is unclear at this stage, but we expect it to be by August
2009.
Ofcom is also consulting on a proposal by BSkyB to replace its three free-to-air channels on
Freeview with a bundled offering of five pay TV services, referred to as Picnic, including the Sky
Sports 1 and Sky Movies. Ofcom is running the consultation process in conjunction with the Pay TV
Market Investigation and therefore the exact timing of any further consultations is unclear at this stage.
Digital Britain Report
In January 2009, the U.K. government published a preliminary report (the Interim Digital Britain
Report) which is aimed at providing ‘‘an ambitious and clear strategic vision from Government and a
new and stronger sense of co-operation between Government, regulators and industry’’ to secure the
U.K.’s place at the forefront of the digital economy. The preliminary report outlines the government’s
plans to identify any market failures that may impede a full roll-out of digital infrastructure in the
U.K., its commitment to act, where necessary, to ensure the timely delivery of high-speed networks
across the U.K. and to consider whether any further measures are necessary to ensure universal access
to broadband services. Following the publication of the Interim Digital Britain Report, the government
will work closely with industry participants and regulators through a number of working groups and
meetings to consider specific proposals, with a view to publishing a final report in summer of 2009. At
this stage, we are unable to assess the impact that the final report may have on our business.
Corporate Responsibility
We are committed to demonstrating corporate responsibility, or CR, across all of our business
activities. We have implemented a CR governance structure to deliver more effective scrutiny and
management of the issues most likely to impact our reputation as a responsible business. During 2008,
we deployed a risk management process to identify and better understand CR issues related to our
business. Our CR Committee, chaired by our chief executive officer and comprised of members of our
senior management, convenes quarterly and advises on the most effective means of managing the CR
risk and opportunity that emerge from this process. We also appointed CR Champions across each of
our divisions to provide the CR Committee with operational insight into area-specific challenges.
Our approach to managing CR was communicated to a wide range of stakeholders with the
publication of our first CR Report in June 2008. The CR Report addressed our view of our
responsibilities to our customers and employees, our commitment to support charities and communities,
our commitment to improve our environmental performance and outlined a clear set of objectives for
further improvement of our CR performance.
Seasonality
Some revenue streams are subject to seasonal factors. For example, fixed line telephone usage
revenue by customers and businesses tends to be slightly lower during summer holiday months. Our
customer churn rates include persons who disconnect their service because of moves, resulting in a
seasonal increase in our churn rates during the summer months when higher levels of U.K. house
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