News of the World closure could influence proposed BSkyB takeover, Government says

When assessing News Corporation's bid for the 61% of BSkyB it does not already own, the Government will assess whether the newspaper's closure will affect media plurality, one of the criteria for deciding whether the deal should go ahead.

NotW publisher News International, which is owned by News Corporation, announced yesterday that the paper would close after this Sunday's edition has been published. News Corporation has been trying to complete a takeover of the UK's largest broadcaster since last year.

When deciding whether to allow the merger the Government has to take into account its effect on media diversity. It said today that the NotW's closure could influence that consideration.

"[The Culture Secretary Jeremy Hunt,] will consider all relevant factors including whether the announcement regarding the News of the World’s closure has any impact on the question of media plurality," a DCMS statement said.

In the statement DCMS said that it will be "some time" before a decision on the proposed takeover is made.  This is because of the number of responses the department had received to a Government consultation on the proposed takeover, the DCMS statement said. The department received 135,000 responses to the consultation, a report by the Financial Times said.

"The Secretary of State has always been clear that he will take as long as is needed to reach a decision," DCMS said. "The Secretary of State will consider carefully all the responses submitted and take advice from Ofcom and the Office of Fair Trading before reaching his decision."

Last week Hunt announced that the Government and News Corporation had agreed on certain conditions that the organisation must abide by in order to complete a takeover of BSkyB.   The undertakings detailed measures News Corporation must take in relation to BSkyB's news channel, Sky News, which it will spin off from News Corporation under the deal.

The undertakings build on original plans the Government agreed with News Corporation and consulted on in March. They force the company to separate Sky News from BSkyB in order to complete a takeover.

A consultation on those proposals received 40,000 responses, the Government said. Hunt said he altered the undertakings in order to "further strengthen" the conditions based on those responses.

The revised undertakings, which had been open to consultation until midday today, include plans for an independent director to be present at Sky News board meetings when editorial decisions are being taken. Sky News will also have to be promoted across other Sky channels, the revised undertakings said.

The changes received the blessing of Ofcom which had previously said the Government should ask the Competition Commission to consider the proposed takeover. The Commission could consider whether a prospective takeover would leave competition in the UK media market in a healthy state and whether it would benefit the organisations, customers and the economy.

News of the closure of the NotW came amidst continuing criticism of the paper's alleged phone hacking activities where journalists and editors at the paper are alleged to have commissioned a private investigator to hack into thousands of individuals' voicemail messages, including those of murdered schoolgirl Milly Dowler and families of the people killed in the 2007 London terrorist bombings.

The alleged hacking is the subject of a continued police investigation. A number of politicians and public figures have spoken out against the NotW and its former editors Rebekah Brooks and Andy Coulson.

Brooks is now chief executive of News International. Both Brooks and Coulson edited the paper during the time the alleged phone hacking activities took place.

Under provisions within the Broadcasting Act Ofcom must decide whether News Corporation is a 'fit and proper' organisation to own BSkyB.

In a statement released on Wednesday the media regulator said that it would was considering whether News Corporation would be a 'fit a proper' owner of BSkyB.

"In the light of the current public debate about phone hacking and other allegations, Ofcom confirms that it has a duty to be satisfied on an ongoing basis that the holder of a broadcasting licence is ‘fit and proper’," an Ofcom statement said.

"It is clearly not for Ofcom to investigate matters which properly lie in the hands of the police and the courts, however we are closely monitoring the situation and in particular the investigations by the relevant authorities into the alleged unlawful activities," Ofcom said.

Ofcom told OUT-LAW that it was not commenting on the DCMS statement today.

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