A video on demand service dubbed Project Kangaroo would unfairly dominate the market, the Competition Commission (CC) has ruled.

The online joint venture between the BBC, ITV and Channel 4 would provide a 'one-stop shop' for video on demand, allowing users to access recently-aired programming and archive material.

Services such as the BBC iPlayer and Channel 4's 4OD software would continue to provide catch-up content meaning that Project Kangaroo's unique selling point would be its provision of archive programming.

But a summary of the CC's provisional findings shows the commission believes the joint venture would hamper competition in the supply of video on demand services to UK internet users.

Peter Freeman, CC chairman and chairman of the inquiry group, said Project Kangaroo - or UKVOD to give the proposal its full title - clearly had "much to offer" viewers.

"However, we are concerned that a loss of rivalry between BBC, ITV and Channel 4, who are normally regarded as close competitors, could restrict existing and future competition for video on demand," he explained.

"Whatever benefits viewers would gain from this rivalry would clearly be lost."

Mr Freeman added that the three corporations' control of the majority of domestic programming meant third parties would struggle to provide a similar service to Project Kangaroo.

"UKVOD would have the ability and incentive to impose unfavourable terms when licensing domestic content to rival VOD providers," he added.

"At the extreme, UKVOD might withhold content from its rivals altogether. Any reduction in access to content would be likely to impact unfavourably on viewers."

The CC is to hold further hearings with the interested parties, with the final report due on February 8th.

03/12/2008 11:05:37