Sky Threatens Government Over Carriage Fees

Richard Freudenstein, chief operating officer of BSkyB, has warned that the group may slow the take-up of digital TV in the UK by ending decoder promotions if the government orders a reduction in carriage fees.

Speaking at yesterday’s Royal Television Society (RTS) dinner, Freudenstein claimed BSkyB could scupper government plans to switch off analogue TV transmissions if it is forced to slash the amount it charges to distribute ITV and the BBC on its platforms.

According to the Media Guardian, Freudenstein said: “We might consider how we do an offer of giving away a free box to all. We give away a free box whether they subscribe to Sky or not. We may decide that a certain number of subscribers is enough and you don’t need help to get towards switch-off.”

At the moment, anybody who takes out their first Sky TV subscription gets a free decoder worth around £200. The BBC has claimed that Sky is financing these expensive sets through overpriced carriage fees. Both ITV and the BBC have been lobbying the government to reduce the carriage fees they pay to Sky in order to be shown on satellite (see Rival Broadcasters To Appeal Against Sky Carriage Fees).

However, according to reports from last night, Freudenstein told the ITV companies to stop complaining, stating: “Just last week Granada trumpeted to the City that its digital dividend has increased by around £39m since the previous year. This is largely due to being on satellite. In addition, we calculate that ITV generated an additional £40m in advertising revenue because of its carriage on the satellite platform last year.”

BSkyB: 0207 705 3000 www.sky.com

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