Ian Burrell: BSkyB is the business – provided the Murdochs aren't in full control

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The Independent Online

BSkyB, so the media regulator Ofcom begrudgingly admitted last week, is a "fit and proper" company to hold a broadcasting licence. It's rather more than that.

In less than a generation it has transformed the British broadcasting landscape. It has become a new home for some of our most-loved creative talent, from Sir David Attenborough – who uses its 3D technology to push the boundaries of natural history programming – to Steve Coogan, who has taken Alan Partridge to Sky Atlantic.

Breakthroughs such as High Definition pictures and the Sky+ recording box have revolutionised the viewing experience. BSkyB introduced to Britain the idea of the rolling news channel, which is still the primary television news service in Fleet Street newsrooms. It has flooded British sport with cash and markedly improved the television coverage of football, rugby, cricket and golf. And it has done all this while running a commercial business that makes £1.2bn profit a year in an economic downturn.

Those are facts. We might deplore the impact Rupert Murdoch has had on other sectors of the British media over the past 43 years and be revolted by the corrupt practices of News International. We might retain deep fears about the degree of influence that this manipulative media mogul exerts over our society. But BSkyB is an impressive act.

Until recently it remained an outsider in British television. Its base was a ramshackle collection of ugly buildings in an unfashionable and distant suburb of London near Heathrow airport. Today, the visitor to BSkyB's Isleworth headquarters cannot fail to be impressed by its vast modern campus, dominated by the vast Sky Studios building which is home to eight studios (five HD), 45 edit suites, 14 voice-over suites and four audio suites. It opened last year at a cost of £233m.

Should we be frightened by this broadcasting muscle? Three years ago in Edinburgh, James Murdoch, as chairman of BSkyB and head of News Corp in Europe, Asia and the Middle East, used the MacTaggart Lecture at the city's International Television Festival to attack the "chilling" scale of the BBC. His words were partly based on the threat posed bv the corporation's website to News Corp's print media interests. A year later at the same event, Murdoch was slapped down by the BBC director general Mark Thompson, who pointed out that BSkyB had grown so large that it threatened to "dwarf" the BBC. Thompson criticised Sky for not "pulling its weight" by investing in original British programming.

Two years after that bruising exchange the atmosphere in the British television industry has altered. When James's sister Elisabeth – whose Shine television business is part of the News Corp empire – gave the MacTaggart last month she was looking to make friends. She even criticised her confrontational brother and his obsession with profit.

Last week's long-awaited Ofcom report into the corporate governance of BSkyB aimed its criticisms mainly at James, a former chief executive and chairman who is now merely a non-executive director of the broadcaster. The regulator found that his actions in response to the phone hacking scandal at News Corp's News Group Newspapers suggested he was not up to the job of running a major company.

Ofcom acknowledged that during James's tenure at BSkyB (he was CEO between 2003-2007 and executive chairman from 2007-2012) it "continued to be a successful company" and that he should be "given credit" for its good compliance record during these periods. But for the past five years the dynamic leadership of BSkyB has been set out not in the Harvard vowels of James Murdoch but in the Geordie inflections of its CEO and former chief financial officer, Jeremy Darroch.

The sense that BSkyB is no longer a pariah in British television circles is borne out by the people who now work there. Programming chiefs Sophie Turner-Laing and Stuart Murphy are both ex-BBC. One of the grittiest social commentators in British drama, Paul Abbott (creator of Channel 4's Shameless) made his latest work, Hit & Miss, for Sky Atlantic. BBC and Channel 4 stars such as Charlie Brooker, Sanjeev Bhaskar, Ruth Jones and Simon Bird are all working for Sky. Coogan, one of the most high-profile critics of News Corp over phone-hacking, has agreed a second series of Partridge's Mid Morning Matters for Sky Atlantic next year.

And then there is Sky Arts, which some might regard as a cynical attempt to win over the chattering classes, but which can also be seen as a strategic complement to Sky Atlantic, encouraging middle-class converts to join BSkyB's 10 million-plus subscriber base.

Comments about Sky Arts by the incoming BBC director general George Entwistle in his first interview last week suggested the channels have touched a nerve. "If you're going to do arts, aspire to half a million people watching, not 5,000!" he told the Radio Times. When I spoke to the Culture minister, Ed Vaizey, he had a different view. "I think Sky Arts is a great pioneering channel in terms of live broadcasts of opera, arts in 3D, hour-long discussion programmes," he said. "That's Sky's great strength, that it's a vigorous competitor – and [in] sport, news, arts it does reimagine traditional areas of output and helps keep everybody on their toes."

Indeed when Entwistle was asked at a press briefing on Wednesday if he felt threatened by the "flight" of TV talent to Sky his outlook was wholly different from that of his predecessor two years earlier. "They are spending more on original content. That's got to be good for the British creative ecology and in engendering competition, which I do believe leads to improved standards," he said.

Ofcom's ruling may open the way again for News Corp to try to turn its stake in BSkyB from 39.1 per cent to 100 per cent sometime next year. The impact this would have on the balance of power in British media would depend on whether News Corp retains its British newspaper interests, which face further reputational damage from forthcoming criminal prosecutions. Until then, it's hard to argue that Sky – the result of Rupert Murdoch's creative vision in 1990 and now shorn of his younger son – is a bad thing for Britain.