Government eyes BSkyB’s ITV stake

Department of Trade, Industry asks for probe

The government Monday intervened in the spat over BSkyB’s 17.9% stake in ITV — leading the Rupert Murdoch-owned satcaster to accuse pols of contradicting their own rules.

The Department of Trade and Industry has asked media regulator Ofcom to probe whether the paybox’s stake “raises public-interest concerns about the number of different owners of media enterprises.”

This is in addition to an inquiry by the Office of Fair Trading into how BSkyB’s stake affects competition.

The satcaster, already involved in a spat with rival Virgin Media over carriage fees for Sky One and other Sky channels, issued an angry statement:

“The Secretary of State’s action contradicts the government’s published guidance,” said BSkyB. “Any positive environment for investment requires that business should be able to rely with confidence on government guidance when making decisions.”

Pointing out that MPs made it clear that media plurality would be protected if BSkyB were to own no more than 20% of ITV, it added: “ITV is a major, public company led by an independent and experienced board. It is inconceivable to suggest that … Sky would be able to influence ITV’s broadcasting strategy or policies …, which remain entirely the responsibility of the board and, under its direction, management.”

The intervention was welcomed by Virgin Media. Under its old name, NTL, Virgin had tried to buy ITV but was out-maneuvered by BSkyB.

“Policymakers and the public have good reason to be concerned about BSkyB’s acquisition of material influence over one of its principal competitors and the resulting concentration of media ownership in the U.K.,” said Virgin Media CEO Steve Burch.

Virgin Media’s contract with BSkyB for Sky One and other non-premium channels expires Wednesday. Virgin claims the satcaster threatened to pull the channels unless it pays double in carriage fees.

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