BBC tells BSkyB to lose ITV stake

Competition at risk, says network

LONDON — The pressure on BSkyB, the Murdoch-backed U.K. paybox, to divest its stake in terrestrial web ITV is increasing — with the BBC the latest to join growing criticism of the move.

In a submission to the Competition Commission, which is investigating the 17.9% stake bought last November for around $1.8 billion, the BBC’s chief operating officer Caroline Thomson said BSkyB’s holding in ITV could jeopardize competition.

She said the stake “may change its strategic direction in a way that would have a negative impact on the achievement of various policy objectives and would harm the competitive process.”

The corporation said it was worried about the impact on news provision, competition for TV rights, ITV’s investment in British production and the distribution of content and channels.

Channel 4 also criticized the satcaster’s ownership of what is the single biggest stake in ITV, which despite sliding audiences remains Blighty’s biggest commercial terrestrial web.

Channel 4 said the stake would “lead to a substantial lessening of competition in U.K. broadcasting and related markets.”

Sky News competes with ITV-backed Independent Television News — which makes Channel 4 News — and BBC News.

It is the first time the BBC and Channel 4 have commented publicly on BSkyB’s holding in ITV, which two other British regulators, Ofcom and the Office of Fair Trading, have also raised concerns about.

News Corp. chair Rupert Murdoch maintains he is not worried by the regulatory scrutiny.

“We have done nothing illegal,” he said. “The 20% limit in ownership (in the 2003 Communications Act) was known as the Murdoch clause, and we stayed under the 20%.”

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