MUMBAI: The Department of Trade and Industry (DTI) in the UK has ordered that country's media watchdog Ofcom to investigate pay TV service provider BSkyB's purchase of a stake in commercial broadcaster ITV.
The aim is to see how this might affect pubclic interest.
The British trade secretary, Alistair Darling, has asked Ofcom to review whether BSkyB's purchase of a 17.9 per cent stake in ITV "raises public interest concerns about the number of different owners of media enterprises".
The move reports state is a victory for Virgin Media. It has been lobbying for an investigation. its argument is that the investment in ITV by a firm that Murdoch’s News Corp has a stake in threatens media plurality in the UK.
Ofcom's initial findings will be submitted by 27 April. This could result in the BSkyB stake in ITV being referred to the Competition Commission for a fuller investigation. Last year in November BSkyB had purchased for £940 million 17.9 per cent of ITV.
Cable firm NTL now known as Virgin Media had tried to buy ITV for £5 billion. Sky says that its minority shareholding in ITV has no bearing on the considerations of the public interest test relating specifically to media plurality. It says that it is inconceivable to suggest that, as a result of a 17.9 per cent shareholding in ITV, Sky would be able to influence ITV's broadcasting strategy or policies, including programming or editorial decisions, which remain entirely the responsibility of the board.
Sky adds, "In its short history, Sky has fundamentally increased choice for viewers, consistently pioneered innovations, invested in and developed quality on-screen content, and is now challenging incumbent telecom and cable providers with lower-cost broadband and phone services. Sky makes a significant contribution to plurality in the highly competitive media sector."
Meanwhile BSkyB could take a hit of up to 20 million pounds if it loses a deal to show its basic channels on Virgin Media. Interestingly though analysts say that it is the other firm that could suffer more in the long run. The deal concludes on 28 February 2007.
