Inquiry ends as BSkyB agrees on pay-TV deal with OFT

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The Office of Fair Trading will this morning confirm it has reached undertakings with BSkyB, the satellite broadcasting giant, ending months of speculation about the regulation of the pay-TV market in the UK.

As a result of the undertakings, BSkyB's position in the market will not be referred to the Monopolies and Mergers Commission. BSkyB has made what some observers said last night were minor concessions on the way it "bundles" programming, including movies and sport, for distribution to cable operators. The changes will enable cable companies to "re-tier" their basic package of channels, taking fewer Sky services without sacrificing discounts.

John Bridgeman, the director general of the OFT, is believed to have been persuaded that the growth of the cable industry has not been unduly threatened by alleged monopolistic behaviour by the market leader.

But Mr Bridgeman will petition the Restrictive Practices Court to accelerate its case against BSkyB and the Premier League, which have signed an exclusive broadcasting agreement for top football. The OFT wants all statements from the defendants to be delivered by 15 October, rather than a month later, citing public interest issues.

The news emerged as BSkyB yesterday confirmed the appointment of Elisabeth Murdoch, the daughter of 40 per cent owner Rupert Murdoch, to the board. Ms Murdoch, who earlier this year was appointed general manager, broadcasting, will deputise for her father and two other News Corporation executives when they are unable to attend board meetings.

It is understood that Ms Murdoch's experience as the manager of two television stations in the US, both of them linked to Mr Murdoch's Fox Network, was the main reason for her appointment.

Ms Murdoch's arrival at BSkyB fuelled speculation that she was being groomed to take over eventually from her father. For the past few months, she has been directly involved in both programme distribution and dish installation operations at BSkyB, and attends key strategy sessions with Sam Chisholm, chief executive, and David Chance, deputy managing director.

Ms Murdoch, who has declined all requests for interviews, reports directly to Mr Chisholm and Mr Chance. She is one of two Murdoch children to hold senior positions at News Corporation companies. Her brother Lachlan heads up the Australian operations of the parent company.

Insiders deny there are any plans to reshuffle the top jobs at BSkyB, despite industry rumours that Mr Chisholm may begin to spend more time in Australia, where News Corp's Foxtel television venture has been having trouble.

With the OFT inquiry behind it, BSkyB is expected to concentrate on growing its European business, primarily through a joint venture with Bavarian mogul Leo Kirch, and to complete preparations for the launch of new channels, including some pay-per-view services, in the autumn.

But media analysts warned last night the company could still face regulatory pressures from Brussels, where competition authorities are watching developments in the pay-TV market in the UK and elsewhere in Europe.

Market Report, page 19