Cable group ntl's hopes of agreeing a tie-up with ITV have been rekindled by Friday's announcement by the Office of Fair Trading (OFT) that BSkyB's purchase of a 17.9% stake in ITV may have resulted in a de facto merger. Launching a short consultation on its provisional finding, the OFT said "it may be the case that a relevant merger situation" had been created by Sky's surprise shares raid in November.
The OFT gave interested parties a deadline of next Thursday to comment on the stake purchase, and whether it amounted to Sky "acquiring material influence over ITV". If the OFT concludes that Sky does exert a material influence if could refer the matter to the Competition Commission, which could force Sky to sell all or part of its stake, acquired at a 16.6% premium for £940m, making Sky ITV's largest shareholder. ITV's board subsequently rejected a 122p-per-share offer, saying there was "little, if any, strategic logic for ITV to combine with ntl".
Sky said it noted Friday's announcement and would respond to the OFT "in due course". Ntl and its largest shareholder, Sir Richard Branson's Virgin group, said the OFT's provisional finding supported their view that Sky's stake purchase was "intended to give it influence over the future direction and strategy of ITV".
Media regulator Ofcom is currently investigating whether Sky's stake amounts to a change of control which could "affect ITV's ability to meet its public service targets" in a probe that marks a first in the regulator's three-year history.

The BBC Trust is provisionally approving the launch of the corporation's planned free-to-view satellite service, Freesat, in partnership with ITV. According to the Trust, the service offers licence fee payers alternative access to digital services in the lead-up to the 2012 switchover, which is guaranteed subscription free. The Trust says after considering market impact, it acknowledges there may be some negative effects, but those should be balanced against the potential positive of greater choice. A decision will be made in April after the recently launched 28-day public consultation.
Over 8m homes currently have Freeview and when the analogue switch-off takes place in 2012, its coverage will be the same as that of the present analogue TV service. Some viewers are not able to receive it at the moment, because not all transmitters have been upgraded. Acting BBC chair, Chitra Bharucha, says the new guaranteed subscription-free satellite service gives the public another option when deciding which platform to choose. She says over half of those who have yet to switch are outside the Freeview coverage area and for those homes, Freesat means they can access BBC digital services already paid for in their licence fee, but which until now they have been unable to receive subscription-free. Bharucha says the Trust has decided Freesat meets the BBC's Charter and Agreement definition of 'non-service', which does not need a Public Value Test.

Cable group Virgin Media has threatened to take its dispute with pay-TV rival BSkyB to the high court if the warring companies fail to strike a deal over the next month.
Virgin, which has 3.3 million cable TV customers, claims Sky, with 8.4 million subscribers to its satellite service, is guilty of "abuse of dominance" for pulling its basic channels such as Sky One its cable network. The cable operator said it would take the dispute over distributing Sky's channels to the high court if it is not settled within 30 days.
"Following Sky's withdrawal of its basic channels from Virgin Media's TV service, Virgin Media has formally advised Sky that it will pursue action in the high court if their carriage disputes are not resolved within 30 days," Virgin Media said in a statement.
"This comes on the heels of Sky's rejection of an offer by Virgin Media to have the matter resolved through legally binding arbitration by an independent expert."
Virgin said it would seek damages if the dispute is not resolved, adding that it wanted to pay a "reasonable commercial rate" for Sky's channels.
Virgin Media is also seeking to renegotiate the deal to have its own channels, including Living TV, distributed on Sky's digital satellite service.

Whitehaven will become the first English town to have entirely digital TV on November 14, 2007. The Cumbrian town of 25,000 homes will swap analogue BBC2 for its first digital multiplex on October 17, with analogue BBC1, ITV1 and Channel 4 going off four weeks later.
The switch is being coordinated by Digital UK, and will be a test of its campaign to raise awareness and the government's measures to help elderly and vulnerable viewers make the digital switch. Viewers nationally are being targeted through promotions on the BBC and commercial TV, including a sponsorship deal with Channel 4 quiz show, Countdown.
Six months before switch in each region, every home will receive two letters to advise them how to go digital, there will be campaigns in the local press and radio, and every home will also receive a letter about the help scheme. Onscreen captions will appear between programmes encouraging people to prepare for the switch, and in July, Five will be available in digital - the first time it's been on air in Whitehaven. There's also an education programme to teach primary-school children in each region about Digital Switch - presumably to maximise the pester power for parents to get CBBC and Cbeebies.
The change in Whitehaven will take place at around 2am on October 17, when analogue BBC2 will be replaced by a digital multiplex comprising BBC1, BBC2, BBC Three, BBC News 24 and CBBC. Four weeks later, on November 14, the analogue signals for BBC1, ITV1 and Channel 4 will be switched off, and the remaining digital multiplexes will go live.
At the end of this year, Digital UK will announce a switch date for Selkirk in Border, the first major region to go digital, soon to be followed by dates for Caldbeck in Border, and the HTV West transmitters. Britain's first digital switch experiment took place two years ago, in the villages of Ferryside and Llansteffen in South Wales.

Britain could lose out to the tune of £15billion if Ofcom doesn't set aside spectrum for high definition TV on Freeview. The stark warning comes in the BBC's official response to the Digital Dividend Review, in which Ofcom proposed auctioning off the former analogue TV frequencies when Digital Switch is complete in 2012.
The BBC, ITV, Channel 4, Five, TV manufacturers and many thousands of viewers would prefer a portion of the analogue spectrum to be reserved for a new Freeview multiplex, broadcasting free hi-def TV channels.
Mark Thompson, the BBC's director general, said: "High Definition is already a consumer reality, and it's one that really adds value for audiences. "It's a technological advance that we think can and should be available as far as possible to all viewers of digital television – whether they watch through cable, satellite or an aerial, and whether they choose pay or free-to-air services. "If pure market mechanisms are applied to the whole Digital Dividend, our fear is that it will jeopardise the success of universal access to high quality public service broadcasting, free-to-air on all main platforms and also lead to an erosion of the digital terrestrial platform and its ability to compete."
The £15billion figure was calculated up by independent consultants Independen, to compare to Ofcom's estimate that an open auction could net £5-10billion for the Treasury.
It includes the cost of upgrading to another platform such as Sky or cable to get HD for around 6million Freeview homes, and the loss in audiences, advertising revenue, quality and social value to the Freeview platform if it doesn't have HD. Independen estimated the loss to consumers and society could range from £4.1-£15.6billion.
The BBC's response also critiques Ofcom's research into viewers' desire for HD, the technical assumptions underlying the DDR, and estimates of Freeview channels' ability to compete in an open auction.
It also suggests that Ofcom should use the DDR as an opportunity to draw up a long term plan for Freeview beyond 2012, including a long-term migration to MPEG-4 for a greater range of SD channels as well as HD.

The BBC's DAB digital radio coverage is being extended to the Scottish Borders. A new transmitter in Selkirk will join up the BBC's current digital radio coverage north and south of the border and bring digital radio to another 40,000 people in the Melrose, Galashiels and Hawick areas.
BBC chief operating officer Caroline Thomson said: "For many years, our digital radio coverage in Scotland and England has been separated. It's good news that we're now able to join up the two nations." The new transmitter is expected to be in service by the beginning of this winter.
The BBC said it was also looking to install a DAB transmitter serving the Cumbrian towns of Whitehaven and Workington.

Channel 4 has expressed interest in joining the Freesat proposition, which was approved by the BBC Trust and officially announced by the BBC and ITV today.
In a statement, the broadcaster said: "As a public service broadcaster we are committed to offering our innovative, high-quality content to UK viewers across all meaningful platforms. We note with interest the BBC and ITV's announcement to launch an independent, free-to-air satellite platform, and we are open to discussing our possible involvement in due course."
Channel 4 is currently party to an exclusive digital satellite carriage deal with Sky for its entire bouquet of channels, with the exception of the free to air Film4.
"Under the Communications Act we would expect to become subject to obligations to ensure the availability of the core channel on all satellite platforms, which would require that Channel 4 was available on Freesat," the broadcaster explained.

Channel 4 is looking for Ofcom to give it an easy way onto Freesat before its Sky encryption contract expires. The broadcaster said it would look forward to joining the BBC and ITV in setting up a free satellite TV service for UK viewers who can't get Freeview.
However the Channel 4 family are all tied into encryption contracts with Sky, with the exception of Filmfour, which became free-to-air when its Sky contract expired last year.
A statement from Channel 4 said: "As a public service broadcaster we are committed to offering our innovative, high-quality content to UK viewers across all meaningful platforms. We note with interest the BBC and ITV's announcement to launch an independent, free-to-air satellite platform, and we are open to discussing our possible involvement in due course."
"Under the Communications Act we would expect to become subject to obligations to ensure the availability of the core channel on all satellite platforms, which would require that Channel 4 was available on Freesat."

Sky's plans to launch a subscription package on digital terrestrial have been put on hold after Ofcom launched a public consultation. Sky announced in February that it wants to withdraw its three channels from Freeview and replace them with a subscription service offering movies, sports and entertainment.
The plan met with a storm of criticism and media regulator Ofcom has now decided to run a public consultation this autumn. The 10-week consultation will be launched in the autumn, once Sky and National Grid Wireless (the digital terrestrial multiplex operator) have finalised their technical and business plans.

Commercial radio companies in the UK are calling for a timetable to go from analogue to digital within eight years. The broadcasters want a timetable like the one for digital TV, so they don't have to spend decades paying for both analogue and digital licences. RadioCentre, the commercial radio industry's umbrella group, will ask Ofcom next week to set a date for analogue radio switch-off, and some companies want to go completely digital as early as 2015.
Andrew Harrison, chief executive of RadioCentre, said: "If you've got every home wired up to broadband, every home with a digital TV, everyone with a 3G phone and an iPod, the traditional analogue radio is going to look very old-fashioned.

Ofcom has published details of the final digital switch power outputs and frequencies for Britain's 81 main TV transmitters. The frequency plan will enable installers - or savvy DIYers - to pick the right aerial for their location, at least a year in advance of their local digital switch.
The main transmitter details will be supplemented by details for local relay transmitters as each ITV region nears its switch-off date.

A group lead by Channel 4 has won the race to launch a second commercial DAB service.
The new multiplex will reach more than 86 per cent of the adult population, with ten channels including comedy, drama current affairs and music. The 4Digital Group comprises Channel 4, Sky News, magazine publisher Emap, UTV, Carphone Warehouse and Christian broadcaster UBC. Ofcom chief exec Ed Richards said: "Today’s licence award is an important development for radio listeners who will benefit from a greater variety of commercial national radio services. "The award will give a real boost to the DAB platform, which we believe will form the cornerstone of radio provision in the future."

Launching by July 2008, the new stations will be:
E4 Radio: youthful interactive entertainment
Channel 4 Radio: contemporary public service speech
Pure4: intelligent contemporary adult
Talk Radio: news, views and entertainment
Closer: female adult contemporary music, celebrity and lifestyle
Sky News Radio: rolling news
Sunrise Radio UK: Asian entertainment
Virgin Radio Viva: female-friendly pop with attitude
Original: adult album alternative
Radio Disney: children's service
There will also be a "wide selection of podcasts provided by a range of diverse companies" which can be recorded on the latest DAB radios. 4 Digital beat competition from a National Grid Wireless group, which included the BBC and radio giant GCap, which already owns the Digital One DAB multiplex, and is bidding for numerous local DAB muxes.
The 12-year licence will use a network of 174 transmitters, and will be expanded with two more stations within 11 months of launch.

Pubs and clubs will be paying an average 11 per cent more this year to show Premier League football via satellite. Sky will raise its prices from September 1, after a five-month discount period, when pubs were able to sign up for the 2007/2008 football+ package at last year's price. It's the first season when Sky doesn't have a monopoly - a third of the year's games will be shown by Setanta Sports on Sky, cable and digital terrestrial.
Tony Payne, of the Federation of Licensed Victuallers' Associations, said the above-inflation rise was 'of concern'. Sky and Setanta have signed a 'pub deal' so that pubs using satellite can pay for both matches from both broadcasters on one bill. Depending on the pub's size, the monthly bill for showing Sky Sports can vary from £80 to £2,500.

Channel 4 is today launching a time-shifted digital version of its main channel. Channel 4+1 becomes the first terrestrial channel to have a time-shifted version, offering viewers an exact replica of Channel 4's schedule delayed by one-hour.
The timeshifted channel is launching on Freeview, Sky Digital and Virgin Media, and brings the total number of timeshifted channels on digital platforms to more than 40.
Last month Channel 4 CEO Andy Duncan said the launch of Channel 4+1 was "a logical strategic move … consistent with our commitment to do everything appropriate to secure Channel 4's public service model longer term".
The time-shifted channel replicates TV advertising, including regional variations, giving advertisers an additional benefit. The channel is available on Sky Digital on 135.

"This will be a major digital platform in the UK and we have worked very closely with the BBC to get it right," said John Bozza, director of broadcast sales, Arqiva Satellite Media Solutions.
"When we reach the time for digital switchover in the UK it's vital that every household is able to receive free digital TV. We are looking forward to working with Freesat and helping the channels on our existing satellite multiplexes to access the Freesat platform," he added.
However, Arquiva's Freesat transponders will be on the Eurobird1 satellite, which has a pan-European footprint compared to the BBC's preferred satellite, Astra 2D.

It warned, however, that potential benefits to the digital terrestrial platform would be negated post-digital switchover were the BBC forced to transmit only a four hour service on DTT compared to a full nine hour service on satellite and cable. The regulator added that BBC HD would likely drive take-up of MPEG-4 capable set top boxes, leading to eventual "spectrum efficiency" benefits if it permitted an earlier introduction of MPEG-4 standard definition channels.
BBC HD's impact on commercial broadcasting was also found to be generally positive. It is understood that the UK's major commercial broadcasters told Ofcom that the channel would "strengthen the commercial rationale for HD broadcasting" and would likely "accelerate the pace at which other public service broadcasters move into HD broadcasting". Ofcom advised, however, that the BBC Trust should enforce a service licence regulation mandating that BBC HD remain mixed genre in nature; in essence, preventing it from showing a high number of movies in competition with Sky's high definition movie channels. The BBC Trust's own public value assessment found that BBC HD would deliver a "medium to high level of public value" and that "a significant proportion of the audience would value the proposed service." Like Ofcom, it said that BBC should run for nine hours on digital terrestrial as it will on digital satellite and cable.
The channel's launch now depends on the full verdict of the BBC Trust's public value test, which is expected in November.

This morning, at a media sector analysts' briefing, Ofcom said that capacity to provide 4 high definition services across the country on DTT could be created without reducing the number of existing standard definition services and without reserving spectrum.
It said that post-switchover, a transmission mode change from 16 to 64 QAM - effectively a reversal of the switch to the more robust 16QAM that took place after the collapse of ITV Digital - along with efficiency improvements permitted by statistical multiplexing, and the adoption of DVB-T2, a second generation DTT standard with a new modulation scheme, would create more capacity without the need for new spectrum.
Ofcom added that a change focused on altering technology rather than adding a seventh multiplex would be "quicker and less expensive" and "better for viewers" because a multiplex addition would be "likely to require over 1m households to change aerials." The regulator will launch a consultation on the HD issue later this year.

Sky plans to work with multiple manufacturers - at launch, primarily Sagem - to offer Picnic boxes that would be capable of receiving both MPEG-4 and existing MPEG-2 channels.
The topic of MPEG-4 adoption was most recently addressed by Ofcom in its discussion on the potential impacts of BBC HD - one of which being the channel potentially driving take-up of MPEG-4 compatible boxes, leading to "spectrum efficiency" benefits if it were to allow a switch to MPEG-4 from MPEG-2 earlier than expected. Sky's Picnic plans to offer "next generation" MPEG-4 boxes may appeal to the regulator for the same reasons.
Pricing was not announced today, but Picnic will be marketed as a triple-play solution including TV, Sky Talk, and Sky Broadband.
"The launch of Picnic will be a big step forward for customers who are hungry for value and simplicity," said Sky chief executive James Murdoch. "We are looking forward to the conclusion of the regulatory approval process so we can get going delivering a great service and real savings to customers."
Sky has readied a significant amount of marketing material, including the logo (pictured above) and a website for prospective customers to register their interest.