UK broadcasting regulator Ofcom is ramping up its investigation into whether BSkyB is a “fit and proper person” to hold UK broadcasting licences. Ofcom says it set up a dedicated team in January (called Project Apple) to investigate material emerging from the Levenson inquiry into phone hacking and corruption at News International’s UK print titles.

The Ofcom examination is looking specifically at James Murdoch’s role on the newspapers, as well as that of News Corporation generally. The Ofcom statement is blunt and to the point: “Ofcom has a duty under the UK Broadcasting Acts 1990 and 1996 to be satisfied that any person holding a broadcasting licence is, and remains, fit and proper to do so,” the regulator said. “New evidence is still emerging from hacking and corruption allegations. Ofcom is continuing to assess the evidence, including the new and emerging evidence, that may assist it in discharging its duties.”

“Ofcom has written to, met and is in dialogue with the various authorities investigating the allegations. This includes the police, the relevant parliamentary committees and British MPs,” Ofcom said.
It seems the BSkyB board was made aware of the investigation and considered its position back in January, and Jeremy Darroch (BSkyB’s CEO) also reviewed the position in advance of previous board meetings in September and December.

The Financial Times, in its comment on March 9, suggested it was time for James Murdoch to make a swift “abdication” from his position as Chairman at BSkyB.

While there is no suggestion that BSkyB has itself breached any rules (indeed, it is widely accepted that Sky has played a very fair and above-board games) the risks for BSkyB remain huge. If Ofcom finds against BSkyB because of James Murdoch’s involvement and supervision at News’ assorted newspapers, then News Corp could be forced to divest either part or all of its 39 per cent holdings.

Unfortunately, there’s more. James Murdoch, so the rumour-mill suggests, has not impressed the all-party Culture, Media and Sport Select Committee of the UK parliament. He is due to appear again at the end of March. The BSkyB board might be best advised to ask James to step down pending an absolute clearing of the air. The risks from keeping him at Sky far outweigh the benefits.

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7. Analyst: “TV Industry consolidation inevitable”
8. Intelsat: ‘Insider trading’ appeal lodged
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