Ofcom probes deeper, wider in BSkyB 'fit and proper' test

Murdoch biz inspection intensifies

Ofcom has widened a regulatory investigation scrutinising whether BSkyB - under the chairmanship of James Murdoch - passes the so-called "fit and proper" test (PDF) to hold a British broadcasting licence.

A Freedom of Information request sought by the Financial Times revealed that the communications watchdog had begun a deeper probe of the company, which is 39 per cent-owned by Rupert Murdoch's News Corp.

His son recently moved to New York and, in doing so, turned his back on his father's UK newspaper business. James Murdoch has been under the spotlight since phone allegations swamped News International, the British publishing arm of Rupert Murdoch's media empire.

It has now emerged that Ofcom boss Ed Richards met other senior figures at the regulator in January this year to effectively step up the watchdog's investigation of BSkyB by officially assigning it the status of "project". The probe is known internally as "Project Apple".

"Ofcom has a duty under the Broadcasting Acts 1990 and 1996 to be satisfied that any person holding a broadcasting licence is, and remains, fit and proper to do so," a spokeswoman at the comms regulator told The Register.

"In relation to the hacking and corruption allegations, new evidence is still emerging from the various enquiries. Ofcom is continuing to assess the evidence – including the new and emerging evidence – that may assist it in discharging these duties."

She added: "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 MPs."

As we reported in July 2011, Ofcom had initially held off from probing BSkyB in light of the phone-hacking scandal that led to the closure of News International's 168-year-old Sunday tabloid News of the World.

Various senior execs including then NI boss and erstwhile editor of the redtop Rebekah Brooks were forced out of the company. But James Murdoch remained as chairman.

His decision to move to New York in recent months to concentrate on News Corp's TV biz has led to some observers suggesting that the younger Murdoch was pushed out of NI in a move to limit damage to his tarnished credibility. Others have simply called for James Murdoch to altogether quit his dad's firm.

The Murdochs, at the very height of the phone-hacking saga, were audaciously hoping to buy the remaining part of BSkyB that News Corp didn't already own. That planned merger was ditched on 13 July last year, following immense political pressure in the House of Commons with MPs demanding News Corp to withdraw its bid.

As we noted at the time, however, News Corp signalled that it could, at a later date, attempt to buy out the remaining 61 per cent of BSkyB where US-based James Murdoch remains as chairman and non-exec director.

"News Corp reserves the right to announce an offer or possible offer or make or participate in an offer or possible offer for BSkyB and/or take any other action which would otherwise be restricted under Rule 2.8 of the City Code within the next six months," it said in July 2011. ®