Murdoch awaits Ofcom report into BSkyB deal

Officials from the media regulator Ofcom worked late into last night to prepare today's report on whether the proposed £8bn buyout of BSkyB by Rupert Murdoch's News Corporation should be subjected to a Competition Commission inquiry.

Ofcom's team, which includes specialist lawyers and economists and is headed by chief executive Ed Richards, is expected to continue finalising the document – described as a "substantial report" – this morning before presenting it to the Culture Secretary Jeremy Hunt.

The decision falls to Mr Hunt after being taken out of the hands of Business Secretary Vince Cable, who was recorded telling undercover reporters he had "declared war" on Mr Murdoch. It is expected that the Culture Secretary will make his ruling in the middle of January. The buyout is being noisily challenged by Mr Murdoch's rivals, which are confident that Ofcom will recommend a referral. Yesterday an "alliance" of competing media groups including the owners of the Daily Telegraph, The Guardian, Daily Mail and Daily Mirror, released details of an ICM poll which found that 63 per cent of the public believe the buyout should be scrutinised by the competition authorities.

The European Commission has already approved the deal, concluding that it was "confident that this merger will not weaken competition". But Ofcom has been investigating whether the buyout would reduce the plurality of UK media. Observers have speculated that the deal would allow News Corp to strengthen ties between its papers (including The Sun, the News of the World, The Times, The Sunday Times and Wall Street Journal Europe) and Britain's biggest broadcaster by turnover.

Commentators suggest Sky Sports and Sky News content could be made exclusively available on the websites of News Corp papers and subscriptions to both the television service and newspapers could be bundled together at special rates. After the emergence of Mr Cable's comments, News Corp issued a statement to say it was "shocked and dismayed" and that the outburst raised questions about whether its bid was being treated with "fairness and due process".

The company will be happier that the decision on whether or not to subject the buyout to a further six months of investigation will be made by a senior member of the Conservatives, which Mr Murdoch's papers supported at the election. But Mr Hunt, who has promised he has not prejudged the issue, will be cautious about rejecting the findings of the regulator and the storm of controversy that has already blown up around this issue means it will be a surprise if Ofcom does not back a more extensive inquiry.

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