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Friday, November 9, 2007

BSkyB chief attacks 'police powers' to collect licence fee

BSkyB chief attacks 'police powers' to collect licence fee

James Murdoch yesterday launched an attack on the BBC's state funding and "police powers" to collect the licence fee as the chief executive of British Sky Broadcasting gave further details of its new technology plans.

The BBC had seen a 28 per cent increase in its funding over the past five years while its audiences had declined by more than 10 per cent, Mr Murdoch claimed.

"In most cases where the private sector starts to innovate and provide things, the state happily steps back. Here we have a state that's stepping forward and I think we have to question that," he said at the Monaco Media Forum. Viewers should be wary of the use of state funds for a national news service, he said. "I wonder if we're wary enough."

Mr Murdoch's comments were challenged at the event by Ashley Highfield, the BBC's director of future media and technology, who denied any state influence over the BBC's news coverage. "I made no comment about your news," Mr Murdoch told Mr Highfield in a testy exchange, "[but] the BBC's a state agency with police powers to collect a tax."

BSkyB is facing two investigations by Ofcom, its regulator, and a Competition Commission review of its 17.9 per cent stake in ITV, taken a year ago.

The group has begun a public relations campaign in recent weeks to emphasise the choice and competition it has brought to the UK television market since the satellite broadcaster launched 18 years ago.

Yesterday, Mr Murdoch said Ofcom had done "a tremendous job", but questioned whether any "regulatory bureaucracy" could keep up with the pace of change in the media and communications industry.

Regulators should challenge transgressions, he said, "but do it when these happen rather than determine an outcome and then create a long-winded system for getting there".

Mr Murdoch also addressed how technology was changing BSkyB's business, saying that it was working to introduce ethernet-enabled set-top boxes with as much as a terabyte of local memory enabling users to store their media on the devices.

BSkyB could defend its profit margins as it expanded from pay television into broadband and telephony better than incumbent telecoms providers with legacy tariffs to protect, he argued, because telecoms costs had come down faster than the cost of making television.

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