British Sky Broadcasting Plc looks to be running into further problems with the launch of its digital television service after reports in the UK press suggested British Interactive Broadcasting, in which the company has a 32.5% stake, is having problems clearing the European Commission regulators. The European Commission DG4 group is said to be concerned about BIB’s plans to subsidize its set-top boxes and competitive issues with rivals in the cable industry and British Digital Broadcasting, the digital terrestrial group jointly owned by Granada Group and Carlton Communications Plc. Industry sources say the European regulator is demanding that BIB, jointly owned by banking group HSBC, BSkyB and Matsushita Electrical Industrial Co, offer similar subsidies to the two rival operations. Should BIB fail to subsidize the box BSkyB may well be forced to foot the whole bill. BSkyB’s existing plans will already see the satellite broadcaster spend an estimated 600m pounds over ten years to subsidize the boxes in order to reduce the cost from an average of 400 pounds to around 200 pounds each. Despite doubts this week (CI No 3,325) BSkyB’s digital service is still officially scheduled to go ahead in spring of this year, although more caustic commentators have been questioning the satellite broadcaster’s definition of spring, suggesting that the service is now unlikely to go ahead before June at the earliest. A spokesperson for BSkyB commented: BSkyB has noted the recent speculation concerning the EU’s clearance of BIB and would emphasize that these reports are speculation. BSkyB and all BIB shareholders are confident that the EU will approve the venture once discussions have been concluded. The possible intervention of the European Commission once more raises the question of who exactly is meant to regulate deals in the television industry in Britain. The Independent Television Commission is the UK’s official TV regulator although the Department of Trade and Industry and telecoms watchdog OFTEL are both said to have an interest. The Government suggested earlier this year that it might eventually merge the ITC and OFTEL into a giant super regulator.
