THE prospect of Rupert Murdoch's £8 billion takeover of BSkyB, Britain's biggest commercial broadcaster, seemed increasingly unlikely last night after Ofcom said it would talk to the police and other authorities about the conduct of News International in the wake of the phone-hacking scandal.
The industry watchdog said it wanted to determine if the allegations against the News of the World were relevant to whether the parent company, News Corp, would be a “fit and proper” owner of BSkyB.
Crucially perhaps, Ofcom said a licence holder would not necessarily have to be charged with a criminal offence for the issue of propriety to be questioned.
The development came as Simon Hughes, deputy leader of the Liberal Democrats, questioned whether BSkyB should be stripped of its broadcasting licence altogether.
He referred to how Tom Watson, the Labour backbencher, had in the Commons claimed James Murdoch, News International chairman, had “‘authorised money to be paid by his company to silence people who had been hacked and to cover up criminal behaviour within his organisation’”.
He also mentioned that Mr Murdoch had confirmed that he had been wrong to approve out-of-court settlements with hacking victims.
Mr Hughes told Ofcom: “I would like you to make a judgement as to whether BSkyB can still be considered to be fit and proper to hold a broadcasting licence as long as James Murdoch continues to act as chairman of the company.
“The admissions made by and the allegations made against the chairman of BSkyB must directly reflect on and influence, the reputation of BSkyB and its fitness and propriety to continue to hold a broadcasting licence.”
He added: “In the case of James Murdoch I do not believe it would be acceptable for a person who led an organisation which has a corporate culture of misleading the watchdog for its print media and has admitted to making payments to stop information coming out about his company – which will now lead to criminal convictions – to be in charge of a company, which holds a broadcast licence.”
In its response, the watchdog said it would be unfortunate if any of its actions prejudiced the police inquiry.
“However,” it told Mr Hughes, “as you would expect, we are monitoring the situation closely and, in particular, the investigations by the relevant authorities into alleged unlawful activities in regard to any evidence or findings of any relevant conduct.
“In this regard, we are writing to the relevant authorities to highlight our duties in relation to ‘fit and proper’ and indicating we would like to be kept abreast of the timescales of their investigations and of any further information which may assist us in the discharge of our duties.”
Ofcom’s decision to contact relevant authorities – which include the Press Complaints Commission and Commons committees, as well as the police – could put back its recommendation ever further.
Consultation on News Corp’s controversial bid for the satellite broadcaster concluded yesterday and Jeremy Hunt, the Culture Secretary, had been expected to announce his decision in favour of Mr Murdoch succeeding in gaining control of BSkyB as early as next week.
However, the Department for Culture, Media and Sport yesterday made it clear it was likely the Secretary of State would take “some time” to reach his decision. Speculation is that this could now drag on to the autumn.
When the month of September was mentioned to the department, a spokesman replied that Mr Hunt would “take as long as is needed”, adding: “He will consider all relevant factors, including whether the announcement regarding the News of the World’s closure has any impact on the question of media plurality.”
Last month, the Culture Secretary paved the way for the deal to go through when he agreed to beefed-up proposals that would see Sky News run as an independent company to allay fears that the deal would give News Corp too much influence.
But with the hacking scandal deepening, the department has now received an unprecedented 160,000 responses to its consultation process; in the previous consultation, it received 40,000.
It added Mr Hunt would take advice from Ofcom and the Office of Fair Trading before reaching his final decision.
At his press conference yesterday, Prime Minister David Cameron said the Culture Secretary was following “the proper legal processes and procedures” and added: “His role is to take the advice of independent regulators and, as his department have made clear this morning – given the events of recent days – this will take some time.”
Meantime, as Ed Miliband, the Labour leader, again called for News Corp’s takeover bid to be referred to the Competition Commission, Lord Oakeshott, the Liberal Democrat peer, noted: “If News Corp, after what has been revealed this week, passes the fit and proper test, the question has to be asked, what does it take to fail?”
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