Phone Hacking: U.K. Regulator Deems BSkyB 'Fit and Proper' TV License Holder

U.K. media regulator Ofcom has ruled that pay TV giant BSkyB is "fit and proper" to hold a U.K. broadcast license, but it was critical of some of the decisions made by former chairman and current board member James Murdoch, the son of media mogul Rupert Murdoch.
 
In July 2011, amid the debate about the phone hacking scandal and other allegations, Ofcom had said that its duty was to review whether the company was fit and proper to continue to hold its broadcast licenses.

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Rupert Murdoch's News Corp., which has been at the center of the phone hacking scandal, holds a 39 percent stake in BSkyB and looked to buy the rest before abandoning the deal amid the phone hacking scandal. His son later gave up his role as leader of BSkyB and News International, the U.K. newspaper unit that has been engulfed in the hacking scandal, to move to News Corp.'s corporate headquarters in New York.

"Ofcom considers that, on the evidence currently available and having taken into account all the relevant factors, Sky is fit and proper to hold its broadcast licenses," Ofcom said Thursday. “Should further relevant evidence become available in the future, Ofcom would need to consider that evidence in order to fulfil its duty."

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But it also said it was critical of James Murdoch and some of his actions. "We consider James Murdoch’s conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged," it said," adding it "repeatedly fell short of the conduct to be expected of him."

But it emphasized that that "the evidence available to date does not provide a reasonable basis to conclude that James Murdoch deliberately engaged in any wrongdoing."

Some observers had suggested that a negative Ofcom ruling could lead the regulator to require News Corp. to reduce its stake or possibly even sell it completely.

BSkyB welcomed Thursday's news. “Ofcom is right to conclude that Sky is a fit and proper broadcaster," it said. "As a company, we are committed to high standards of governance and we take our regulatory obligations extremely seriously. As Ofcom acknowledges, our track record of compliance in broadcasting is good."

It added: "After a lengthy review process, we are pleased that Ofcom has now reached its conclusion and we look forward to continuing to develop our business for the benefit of customers and shareholders alike.”

Email: Georg.Szalai@thr.com

Twitter: @georgszalai