The Department of Culture, Media and Sport last night angered BSkyB, Rupert Murdoch's satellite broadcaster, by giving the BBC permission to offer its 24-hour news service free to cable operators.
BSkyB last month threatened to seek a judicial review of the BBC's plans to provide cable companies with the service free of charge, accusing the Corporation of predatory pricing. Cable operators are charged 49p a month per subscriber to receive Sky News.
The service, known as BBC News 24, is funded by the licence fee and will go on air next month on the existing analogue cable network and during the night on BBC 1. The Corporation also plans to make the service available on digital cable, satellite, and terrestrial television as these platforms become available next year.
Five cable operators have already agreed to carry the BBC's service, including Telewest Communications, Cable & Wireless Communications, Diamond Cable Communications, NTL and ComTel/Telecential. At least two of these - NTL and Telewest - are thought to have decided not to carry Sky News in areas where they are not contractually obliged to do so.
A spokesman for BSkyB said: "There is clearly no need for another 24- hour news service, but we look forward to competing with BBC News as we have competed in sport and other programming."
Tony Hall, chief executive of BBC News, said yesterday: "With hundreds of new channels on the horizon, BBC News 24 will give licence-fee payers a public service choice for the multi-channel age. "
The BBC's pounds 30m investment in 24-hour news, which forms part of the Corporation's preparations for digital television, has run into controversy as it will be funded by efficiencies and savings elsewhere in the Corporation.
The BBC's commercial arm, BBC Worldwide, has also signed a joint venture with Flextech, the cable and satellite programmer, which will see the creation of a number of pay-TV channels, four of which will begin broadcasting next month.
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