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    BSkyB to cut BBC transmission charges by more than 5m a year

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    Mark Sweney GuardianThursday 8 March 2012

    DATELINE: 9/3/12

    BBC local radio services facing controversial cuts have found an unlikely saviour – BSkyB. The satellite broadcaster is reducing what it charges the BBC to transmit its TV channels and radio stations by more than £5m a year, with the corporation planning to use the windfall to reduce the local radio cuts.

    BSkyB charges TV and radio broadcasters annual fees to carry their channels and stations on its satellite service with ITV, Channel 4, the BBC and Channel 5 currently paying about £24m a year.

    Sky has said that it will slash those costs by over 50% by 2014 – from £24.4m to £11m for the main broadcasters – a combined saving of more than £16m.

    The biggest beneficiary will be the BBC, which has almost 50 radio and TV channels on Sky, which will save £5.5m a year from 2014.

    John Tate, the director of policy and strategy at the BBC, said that most of the cash savings would go toward reducing about £10m a year in cuts that the corporation is looking to make in its local radio operations.

    The BBC pays £9.9m a year, this will drop to just £4.4m in staged cuts by 2014.

    ITV currently pays £8.1m but by 2014 will pay £3.1m, a £5m a year annual saving. Channel 4 will see its annual fees fall from £5m to £2.7m, while Channel 5's will drop from £1.4m to £800,000.

    BSkyB is reducing the charges to all of the hundreds of broadcasters that pay to have channels on its platform.

    The public service broadcasters have been lobbying for BSkyB to pay a considerable amount to carry their channels as they are the most popular on the Sky platform.

    They argue that research estimates based on international comparisons indicate that BSkyB should pay as much as £120m a year.

    "The value Sky gets out of carrying BBC channels is huge, if Sky had to pay for that it would be hundreds of millions of pounds," said Tate. "Licence fee payers are being unfairly disadvantaged, the logic is that Sky should be paying to carry the most popular channels."

    BSkyB argues that the charges, which are regulated by Ofcom, have reduced over time as the broadcaster has recouped set up costs of £1bn.

    "We have published a new rate card which sees a reduction in platform contribution charges for more than a hundred channels on the Sky platform, including all public service broadcasters," said a spokesman for Sky. " Our charges … have reduced as the costs of developing the platform have increasingly been recouped."

    A Sky spokesman refuted the argument that it should pay PSBs for their channels.

    In the US, News Corporation, Sky's biggest shareholder with a 39% stake, has successfully persuaded pay-TV operators to fork out transmission fees for its Fox free-to-air network.

    Historically, the four network broadcasters in the US received no money from cable and satellite operators for their channels, but the situation has changed in recent years.

    Mark Thompson, the BBC director general, used the News Corp transmission fees to argue that Sky should also be paying to broadcast terrestrial channels in the UK, in his MacTaggart lecture at the MediaGuardian Edinburgh International Television Festival in 2010.

    However, Sky argued that it was wrong to draw a comparison between US transmission fees and the UK TV market.

    © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. guardian.co.uk,




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    Last modified: Friday, March 9, 2012

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