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BSkyB drops equity holding in BDB

BSkyB is understood to have dropped its equity stake in British Digital Broadcasting, one of the contenders for the digital terrestrial television licences, after coming under pressure from the competition authorities.

As a condition of abandoning its shareholding, Sky is thought to have negotiated an eight-year programming deal with Carlton and Granada, its two other partners in the consortium.

The Independent Television Commission told Sky to drop its stake last week after the European Commission and the UK authorities expressed concern about power being concentrated in the hands of a small number of players. Analysts said the deal was good news for Sky, as controlling programming will be the most immediately lucrative part of digital television.

The changes to BDB's bid inevitably leaves the ITC open to judicial review. The ITC has said in the past that applicants would only be justified in seeking legal redress if there had been "an unfair enhancement of the bid".

The changes to Sky's role in BDB will mean that Carlton and Granada will either take on the company's pounds 100m stake between them, or will seek another backer in the venture.