Regulator may block BSkyB plans

Ofcom says new terrestrial service could hurt Freeview

LONDON — BSkyB’s plans for a terrestrial pay TV service, announced last week, are raising concern at the U.K. regulator that needs to approve the initiative.

The Office of Communications (Ofcom) is worried that the Murdoch-controlled satcaster’s plans might “unacceptably diminish the appeal” of Freeview, the digital terrestrial platform.

BSkyB’s plans involve replacing free-to-air stations Sky News, Sky Sports News and Sky Three with premium channels screening live football, movies, entertainment and news.

The paybox is worried about fresh competition, including the newly launched Virgin Media and a new soccer channel from Irish operator Setanta, due to bow in August.

The Setanta service will end BSkyB’s monopoly of broadcasting live Premier League soccer matches in Blighty.

Ofcom said Friday it would examine if BSkyB’s planned changes would “unacceptably diminish the appeal of the channels to a variety of tastes and interests, and whether a reduction in the current range of free-to-air channels would be compensated for by the proposed introduction of the new pay television channels.”

In other words, it is worried that the plan could diminish consumer choice and the appeal of Freeview, Blighty’s most popular way of watching multi-channel TV.

Freeview, in which BSkyB holds a stake alongside the BBC, ITV and Channel 4, is crucial to the British government’s plans to drive digital switchover.

This process starts next year and is due to be completed by 2012.

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