...as BBC tries to fend off Murdoch's digital assault

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The Independent Online
The BBC is mounting a last-ditch effort to prevent the creation of what it fears will be a private monopoly in digital television controlled by the media mogul Rupert Murdoch.

In response to today's deadline for consultation on the Department of Trade and Industry's guidelines on digital television, the BBC will again call for mandatory licensing of the technology used to scramble and decode signals.

The war waged against television violence by Virginia Bottomley, Secretary of State for National Heritage, is sure to be seen as wholly marginal when set against the crucial question of who will control access to the 200-channel universe promised by the digital revolution.

Mr Murdoch, who controls 40 per cent of the satellite broadcaster BSkyB, is the owner of the United Kingdom's only functioning "conditional access" technology used to drive set-top boxes. The BBC fears that he will dominate access to the digital pay-television market, just as he has controlled the gateway to analogue pay-television.

The public-service broadcaster is expected to gain limited support from the Labour Party, which is likely to call for a debate on the guidelines when they are published next week.

"Barring a change of heart from the Government ... we will be calling for a debate on the matter," Geoff Hoon, Labour's spokes-man on trade and industry, said yesterday. "We think these guidelines make more sense for a mature market, rather than for a new market [such as digital television]."

The BBC is expected to argue that the DTI's guidelines, which provide for the regulation of conditional access through Oftel, the telecommunications regulator, fall well short of what is necessary to pre-empt a monopoly. The BBC, which plans to launch as many as eight pay channels, wants to be able to operate its own subscription management system, without going through the digital gateway controlled by Mr Murdoch. It is not convinced that the current guidelines will ensure access. The Government believes Oftel can provide a level playing field for all broadcasters.

ITV companies, represented by the ITV Association, are expected to be less critical of the guidelines. All the same, the ITVA will today call on the DTI to ensure that broadcasters are able "to distribute their own smart cards, and manage and authorise subscribers".

According to a source at ITV, "these guidelines are better than nothing". He added that ITV companies expected competing conditional access systems to develop. However, if BSkyB launches its digital satellite service next year, ITV fears Mr Murdoch could seize "first-mover" advantage. It will argue that "if there is going to be a single proprietary conditional access system in operation, it is vital that broadcasters have a choice of suppliers at the subscriber-management level".

Channel 5 said it was relaxed about the regulations. A senior source said: "We believe the BBC is making unrealistic demands, and these have been sensibly ignored by the DTI."

Suggestions that BSkyB will delay the launch of its digital service have been discounted by insiders. However, it is understood that the award of contracts to make the set-top boxes will not be made until the regulations have been approved.

Business comment, page 17