BSkyB said in a statement: "We continue to believe strongly in Picnic. It will be good for consumers and a good opportunity for Sky.
"While our launch plans are already well advanced, there is no definitive conclusion in sight to the Ofcom process. Consequently, we intend to wind down preparations by redeploying as many of the team as possible to other parts of Sky.
"We will decide whether to reactivate the project when we have more certainty over the Picnic TV proposal. This is not as a result of any change of view as to the attractiveness of the opportunity," it added.
Ofcom response to Sky's statement on its "Picnic" proposal
As Ofcom announced in May 2008, we are currently considering BSkyB's Picnic proposal in conjunction with the PayTV Market Investigation.
The Picnic proposal raises complex issues, and is likely to have a significant effect on the future development of the PayTV market as a whole. As all parties are aware, Ofcom will very shortly issue a further consultation document. Any decision to suspend the project is entirely a business matter for BSkyB.
Ofcom rejects the implications of BSkyB's comments today and would highlight the following facts:
1. Having announced Picnic in a press statement in February 2007, BSkyB took two months to submit the necessary application and a further two months to provide sufficient information to enable Ofcom to publish a consultation document on the matter.
2. When Ofcom consulted on both the Picnic proposal and the PayTV Market Investigation, several stakeholders, including BSkyB, responded late to these submissions. BSkyB submitted its response on the PayTV Market Investigation over six weeks after the 26 February 2008 deadline.
3. We have received a number of supplementary submissions from stakeholders after deadline dates which we are bound to consider. The most recent one from BSkyB arrived as late as 13 August 2008.
4. BSkyB has raised a series of procedural points throughout this period, including a repeated concern that we are spending insufficient time considering its arguments.
Ofcom's objective is to conclude this work as efficiently as possible while carrying out our duties to promote competition in the interests of consumers and citizens.
It seems there is some disagreement between Ofcom and BSkyB!