BSkyB says auction off OnDigital's frequencies could raise at least £8bn

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BSkyB, the pay-TV broadcaster, claims the Government could raise at least £8bn through auctioning digital terrestrial frequencies which are currently expected to be turned over to ONdigital for free as it expands its signal coverage across the country.

In a letter sent by BSkyB to the Independent Television Commission and several Government ministries, including the Treasury, BSkyB urges that consideration be given to alternative ways to enhance digital television coverage.

The intervention comes as bids for third generation mobile telecoms licences being auctioned by the government have surpassed £10bn. Industry insiders expect the auction for the five licences on offer to raise upwards of £15bn - over five times what the Treasury expected.

BSkyB contends that the sums communications companies are prepared to pay should be factored into Government plans to make digital television available to all homes by 2010. It argues that using cable, satellite and DSL technology could extend digital television and raise at least £8bn.

ONdigital, co-owned by Granada and Carlton Communications, will fiercely oppose an auction. It was granted a 25-year licence in 1998 in exchange for investing in the technology and infrastructure to prepare for the transition of analogue free-to-air television to digital transmission.