Sky hits out at Ofcom probe

BSkyB has hit back at the Department of Trade and Industry’s order to Ofcom to conduct an investigation into its £940m acquisition of a 17.9% stake in ITV last November, saying it contradicts Government policy.

A spokesman for the satellite broadcaster says DTI minister Alistair Darling’s action “contradicts” the Government’s published guidance. He says: “It is inconceivable to suggest that, as a result of a 17.9% 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 and, under its direction, management.”

Sky will, however, work fully with the DTI, the Office of Fair Trading (OFT) and Ofcom during the process.

Darling (pictured) said earlier today: “I am today asking Ofcom to conduct an initial investigation into the public interest issues that may be raised by this transaction and to report back to me.

“I wish to emphasise that this decision only means there will be an initial investigation by Ofcom and is without prejudice to any decisions I take subsequently on whether a fuller investigation by the Competition Commission may be necessary.”

The regulator will report back to him by April 27 on whether the purchase raises public interest concerns about the “number of different owners of media enterprises”.

The OFT announced last month that it had concerns over the size of the stake Sky had acquired. The OFT will also report to Darling in April.

Sky’s surprise purchase of ITV led Virgin founder Sir Richard Branson to accuse the satellite broadcaster of a “cynical attempt” to thwart cable company Ntl’s attempt to merge with the commercial broadcaster. Branson is the largest shareholder of the cable company – now rebranded Virgin Media.

Since its relaunch earlier this month, Virgin Media and Sky have been at loggerheads. The two broadcasters are locked in a row over the price Sky charges Virgin Media to carry its basic channels and negotiations between the pair have stalled.

Branson and Virgin Media chief executive Steve Burch wrote an open letter to customers, which appeared in press advertising at the weekend, outlining the reasons why Sky is planning to take Sky One, Two, Three, Sky News and Sky Sports News off Virgin’s service. It is understood that Sky retaliated by airing a second burst of ads last night that appeal to cable viewers to complain to Virgin about the changes to their service.

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