Murdoch blasts regulators for excessive intervention

Takes aim at BBC's 'megalomania'

LONDON -- BSkyB CEO James Murdoch on Thursday attacked the U.K.'s media watchdogs for overregulation in the broadcast sector and branded the BBC's Internet ambitions "megalomania."

Speaking at a media conference in London, Murdoch also said he played no part in the recent appointment of BBC chairman Michael Grade to the post of executive chairman of ITV, despite being the commercial broadcaster's largest shareholder.

Murdoch's comments come as media regulator Ofcom and antitrust watchdog the Office of Fair Trading begin a review of BSkyB's acquisition of a 17.9% stake in ITV on the grounds that it might constitute a "material change of control" in ITV's ownership.

"Too many people in broadcasting have been brought up in the straitjacket of a heavily regulated and interventionist structure. The idea of a free marketplace of ideas -- which we should welcome as a wonderful, indeed a noble thing -- makes them nervous," he said at the media gathering on international regulation.

Though he stopped short of calling for the investigation to be halted, he warned that knee-jerk action could have negative outcomes.

"Regulators must act with deliberation and care because they cannot predict the future or second-guess the market. Otherwise we will be in the territory of frequent and ill-judged interventions," Murdoch said.

Under media ownership rules, Sky is allowed to take up to 20% in ITV, but under separate competition rules, shareholdings over 15% can be examined to see if they give the owner control over strategic decisions.

"Did I have a role in it, no I did not," Murdoch said when asked if he had been involved in the hiring of Grade. "As you would expect, we did not seek or have any material influence and don't seek any special consideration."

Murdoch welcomed Grade's appointment as good for ITV and said he would bring "strong leadership" to the commercial station.

Murdoch reserved his strongest criticism for the license fee-funded BBC, which he said continues to be an unregulated market distortion.

"The U.K.'s main state broadcasting agency, the BBC, infamously fantasizes about creating a 'British Google' -- and wants the taxpayer to fund it," he said.

"This is not public service, it's megalomania," Murdoch said. "Perhaps it is not a coincidence that the BBC has managed so far to escape any meaningful oversight by concocting a governance fudge that (British confectionery retailer) Thornton's would be proud of. Delusions of grandeur will flourish in the absence of proper accountability."