BSkyB still awaiting green light for Picnic

DTT, broadband service awaiting clearance for two years

LONDON -- BSkyB has mothballed plans to launch a combined digital terrestrial pay TV and broadband service after waiting almost two years for regulatory clearance "with no end in sight."

Sky announced plans to launch the so-called Picnic service at the beginning of last year but has been awaiting the green light from media regulator Ofcom, which launched an inquiry into the service after antitrust appeals from Virgin Media and other operators.

"We want to invest in Picnic because it will be good for consumers and a good opportunity for Sky, but the blunt truth is that Ofcom has spent 18 months looking at our proposals and there is no end in sight," a BSkyB spokesman said Friday.

"While regulation works at its own pace, no business can go on like this indefinitely, so we've had to take some pragmatic decisions," the spokesman said. "We will decide whether to reactivate the project when we have regulatory clarity."

Ofcom has incorporated the Picnic investigation into a more comprehensive review of the pay TV sector, which is expected to be released in 2009.

Picnic would have offered consumers three pay television channels, free-to-air digital channels and broadband access.