BSkyB hangs onto broadcasting license; James Murdoch criticized

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LONDON -- British Sky Broadcasting, the satellite TV network partially owned by Rupert Murdoch, remains a “fit and proper” holder of a broadcast license despite the phone-hacking scandal that has engulfed Murdoch’s media empire, Britain’s communications watchdog said Thursday.

However, the regulatory agency harshly criticized James Murdoch, the former head of BSkyB, for his lackadaisical response to the hacking scandal, saying that he “repeatedly fell short of the conduct to be expected of him as a chief executive officer and chairman” of News International, the British arm of Rupert Murdoch’s giant News Corp.

Although BSkyB was not directly involved in the phone-hacking scandal, which has centered mostly on the now-defunct News of the World tabloid, its operations have come under scrutiny by media regulators because of News Corp.’s 39% stake in the network. The Murdochs had hoped to win full control of the broadcaster but were forced to ditch their takeover bid last year when the hacking scandal exploded over revelations that News of the World reporters had tapped into the cellphone messages of a kidnapped teenager.

The announcement by Ofcom, the communications watchdog, that BSkyB could hang onto its license came as a relief to the broadcaster, whose highly lucrative sports and entertainment programming reaches millions of homes in Britain.

“Ofcom is right to conclude that Sky is a fit and proper broadcaster,” BSkyB said in a statement. “As a company, we are committed to high standards of governance and we take our regulatory obligations extremely seriously.”

But the regulators’ criticism of James Murdoch, Rupert’s son and once a shoo-in to succeed him as leader of News Corp., was sharp.

Ofcom said that, based on current evidence, there was no definitive indication that James Murdoch knew of the full extent of illegal phone-hacking at the News of the World. Police say that there were potentially thousands of victims, including celebrities and senior politicians, whose private voicemails
were accessed by News of the World reporters trolling for scoops and sensational stories.

As allegations of such criminal practices mounted, James Murdoch failed as head of News International to try to get to the root of the matter, Ofcom said.

“We consider James Murdoch’s conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged,” the media regulator said.

[Updated Sept. 20, 10:15 a.m.: Although he has since issued a public apology, his cursory effort to investigate the hacking accusations raises “questions regarding James Murdoch’s competence in the handling of these matters,” Ofcom said.]

But it added that there was no evidence that he was complicit in any efforts to cover up widespread wrongdoing at News of the World.

After the hacking scandal broke wide open in July 2011, Rupert Murdoch summarily closed News of the World and abandoned his bid for full control of BSkyB. In April of this year, James Murdoch resigned as BSkyB’s chairman to prevent the broadcaster from being affected by fallout from the scandal. He remains a director of the company.

Ofcom said there was no evidence that Rupert Murdoch had acted inappropriately with regard to the hacking scandal.

[Updated Sept. 20, 10:15 a.m.: The affair has spawned three separate Scotland Yard investigations into media wrongdoing, which have so far produced dozens of arrests, including that of a former senior aide to Prime Minister David Cameron.

Earlier this week, two journalists and a police officer were arrested in a probe of illegal payments to public officials for information. On Thursday, police announced the arrest of a journalist in connection with an investigation into computer hacking.]

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-- Henry Chu