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UK regulator probes BSkyB’s fitness to broadcas

UK communications regulator Ofcom has intensified its investigation into whether BSkyB, the country’s biggest pay TV operator with over 10 million subscribers, should be allowed to continue as a broadcaster.

Ofcom was already investigating BSkyB in the wake of the phone hacking scandal involving the “News of the World” and other British tabloid newspapers published by News International, a subsidiary of News Corporation. The point is that NewsCorp also owns 39 percent of BSkyB, and so the outcome of Ofcom’s investigation will depend largely on revelations from the Leveson Inquiry into the culture and practice of British print media following the News International phone-hacking scandal. This scandal really broke to public attention during June and July 2011, but most of the alleged tapping of celebrities, members of the Royal Family and people in the public eye, occurred between 2005 and 2007.

Investigations led to employees of the newspapers being accused of engaging in phone hacking as well as bribing police officers. Partly out of damage limitation, News Corp owner Rupert Murdoch closed down the News of The World in July 2011. At the same time, UK Prime Minister David Cameron set up an inquiry under Lord Justice Leveson to look into the specific claims about phone hacking at the News of the World as well as allegations of illicit payments to police by the press. A separate exercise was also put into action to review the general culture and ethics of the British media.

This has provided evidence for Ofcom for its investigation of BSkyB, which will be judged against its rules for being “fit and proper” to hold a UK broadcast license. Ofcom has pointed out that while it takes no account of criminal allegations until proven, it does not have to wait for court verdicts to act on other relevant information. Such information is coming from the Leveson Inquiry that is still ongoing, leading to a changing perspective from week to week. This does mean that Ofcom could, in theory, revoke BSkyB’s broadcasting license in the absence of any successful criminal prosecution. Although, evidence from the Leveson Inquiry and other sources would have to be very damming and conclusive to do that.

The consensus of legal opinion is that such revocation is unlikely for several reasons. One is that being deemed fit to broadcast is seen as more about the content itself rather than actions relating to a separate branch of the media — print in this case. Second, the owner is BSkyB, not News Corp. which is merely a minority shareholder, so Ofcom’s legal case for any revocation could be challenged. The case could be particularly tenuous if BSkyB had no board members in common with News International, the wholly owned News Corp. subsidiary involved in the hacking scandal.

Ofcom has pointed out that it has revoked a license in the past, that of four adult pay-TV channels in November 2010. But this was for repeatedly airing material deemed to be almost hardcore pornography for viewing during the pre-watershed hours before 9pm. That was content related, and fairly extreme in that owners concerned, Bang Channels and Bang Media, had failed to respond to Ofcom directives and had not paid a £150,000 ($230,000) fine.

BSkyB has a virtually unblemished record in terms of content, and is generally considered to be a well-run company at arm’s length from the Murdoch empire; even if it is a ruthless competitor both as a rights holder for sports and movies, and as a pay TV operator. Therefore, it looks like revelations from the Leveson Inquiry will have to imply even greater iniquities than have been revealed so far to seriously threaten BSkyB’s continuation as a broadcaster.