Blair Declares Satellite TV Proxy War on Murdoch

01 March 2007

LONDON: The BBC has received provisional approval from its ruling body, the BBC Trust, to launch a new free-to-air satellite TV service. A direct competitor to NewsCorp's BSkyB, the newcomer will debut in 2008 and is also expected to act as a host platform for ITV and Channel 4.

The government and the BBC are concerned that around 27% of UK homes - some 6.75 million households - are currently unable to receive terrestrial digital broadcasts via the Freeview platform.

When digital switchover is completed by 2012, there are concerns that viewers living outside Freeview reception areas will have no alternative but to subscribe to Sky for channels, some of which they are already funding via the mandatory TV licence fee.

Says BBC Trust acting-chairperson, Chitra Bharucha: "For those seven million homes yet to make the switch, it needs to be clear that the benefits of digital television do not need to equal 'pay television'."

Historically, there has been little love lost between the BBC and Clan Murdoch. And there are signs that the UK government is prepared, for the first time, to risk a confrontation with Britain's other ruling family - specifically this week's announcement of an investigation into NewsCorp's UK media interests [WARC News: 27-Feb-07].

A BBC satellite TV service would be a real and present threat to BSkyB, which currently enjoys monopoly status in those regions of the UK where cable and Freeview are not available.

On Tuesday Sky told its newspaper sibling The Times, it is "keen to ensure that any licence fee-payers' money is not used to subsidise an attack on its core revenues".

Political considerations aside, however, satellite TV offers benefits not available with terrestrial digital broadcasts. It can carry hundreds of channels with zero capacity constraints on high definition content.

And a major drawback to the terrestrial service is its limitation to only five HD channels, leaving it hopelessly out-gunned by cable and satellite rivals.

The BBC Trust will announce its final decision after a 28-day consultation period. According to The Times, major changes to the plan are unlikely.

Data sourced from The Times (UK); additional content by WARC staff