Government sides with Murdoch on satellite fees

The Government is set to back Rupert Murdoch this week in a battle over satellite carriage charges when it announces that the BBC and other public services must pay for their channels to be carried on BSkyB.</p>Mr Murdoch recently lashed out at the BBC, saying it was "untouchable". However, despite the rigorous personal efforts of BBC director-general Greg Dyke, who has lobbied MPs hard on the access charges the corporation pays to be on Sky, the Government will reject his plea that public service broadcasters should only pay a nominal amount for their channels to appear on the satellite service.</p>A senior executive at a terrestrial broadcaster said: "Every British government is scared that if they don't roll over for Murdoch, there'll be trouble.What we wanted them to take into account is that we're free-to-air public service broadcasters and we have to make ourselves universally available."</p>The Government decision would be a blow for the BBC, ITV and Channel 4, who wanted a "must carry" obligation imposed on Sky in the Communications Bill, which is expected to be published tomorrow. The Bill will instead stick with the current system for "conditional access" to Sky.</p>With the switch-off of the analogue TV signal fast approaching, all television in this country will be digital and Sky is by far the most successful digital platform. That leaves Sky as the "gatekeeper" for all television content in the digital era. The public service broadcasters fear that, in years to come, they will be held to ransom by Sky and have to pay vast amounts each year for a slot on the platform, which already has 6.3 million subscribers.</p>Mr Dyke has threatened to take BBC channels off Sky unless the satellite service is forced to carry its stations at cost. ITV already pays £17m a year for its slots on Sky and the BBC fears a massive escalation in its charge, which is due for renegotiation next year. The actual costs to Sky of encryption and transmission for carrying ITV or the BBC are thought to be just £200,000 a year.</p>Mr Dyke toured this year's political party conferences to press the BBC's case. In the last couple of weeks, he, along with Channel 4's chief executive Mark Thompson and ITV's Mick Desmond, called a special meeting in parliament to promote this cause to MPs.</p>A Sky source said: "The BBC pays a commercial rate for its electricity and phone use. This is tantamount to arguing that when Greg Dyke stays in a hotel, he should only just cover the hotel's costs. We invested £2bn to build Sky Digital. It is only right that we can share some of these costs."</p>In the draft Communications Bill, published earlier this year, the Government did signal that it was considering a "must carry" obligation on Sky for public service broadcasters. This obligation is already imposed on the cable companies. The parliamentary committee that scrutinised the draft Bill, led by Lord Puttnam of Queensgate, was also broadly in favour of the provision.</p>However, Sky has been pressing ministers forcefully against "must carry" and the Government has now decided to drop the idea. In a visit to London earlier this month, Mr Murdoch made clear his anger at what he perceived as special treatment for the BBC. "The BBC gets a free run at everything. It gets anything it wants and has done from any government," he said at Sky's annual general meeting. </p>