Murdoch control of BSkyB at risk

U.K. media regulator reviews satcaster's status

LONDON — The inquiry into whether News Corp.’s satcaster BSkyB is a “fit and proper” owner of a U.K. broadcasting license has been stepped up by local media regulator Ofcom.

The Financial Times has revealed that the regulator set up a team, known as Project Apple, in January to scrutinize the ever-growing mountain of evidence that has emerged from the Leveson inquiry into press ethics, politicians’ committees and police probes involving phone hacking and corruption at News Corp.’s newspaper arm, News Intl.

In the worst case, Ofcom could revoke the U.K. broadcasting license of the highly profitable BSkyB, which News Corp. controls via its 39% shareholding.

Other options include putting pressure on James Murdoch to stand down as chairman of the satcaster, and forcing News Corp. to scale down its stake in BSkyB.

Ofcom began preliminary inquiries into BSkyB’s broadcasting license last summer, after it emerged that the cell phone belonging to murdered schoolgirl Millie Dowler had been hacked by the News of the World. News Corp. subsequently closed the paper.

Since then 10 journalists at sister newspaper The Sun, who allegedly bribed public officials, have been arrested.

A Freedom of Information request by the FT revealed Project Apple.

The regulator will pay special attention to a report by a committee of pols on phone hacking, due to be published this spring.

Both Rupert and James Murdoch, who last week ankled as executive chairman of News Intl., were grilled by this committee.

The regulator said: “Ofcom has a duty under the U.K. Broadcasting Acts 1990 and 1996 to be satisfied that any person holding a broadcasting license is, and remains, fit and proper to do so.

“New evidence is still emerging from hacking and corruption allegations. Ofcom is continuing to assess the evidence, including the new and emerging evidence, that may assist it in discharging its duties.”

Ofcom officials are believed to be liaising with the London police teams investigating hacking and bribery allegations, and scrutinizing evidence given to Leveson.

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