BBC in threat to charge Sky for channels as retransmission fee row rumbles on

The BBC has raised the prospect of charging BSkyB to carry its channels as it attempts to force the satellite broadcaster to stop charging £5 million (€5.9 million) a year in retransmission fees.

The UK’s four main terrestrial broadcasters – the BBC, ITV, Channel 4 and Channel 5 – pay an estimated £10 million to Sky to retransmit their signals via satellite, with the BBC paying half of the total.

James Purnell, recently appointed as director of strategy and digital at the BBC, has made he issue of retransmission fees a priority.

John Tate, director of policy and strategy at the BBC, said: “Sky should do the decent thing and stop charging licence fee payers to carry BBC services that, in reality, underpin their ability to generate enormous profits. This free ride needs to stop.”

BSkyB responded by saying that its fees were about recouping costs. “The BBC directly benefits from the billions of pounds we’ve invested in our TV platform and the technical services that support the 49 channels they run over the Sky platform. These payments are no different to paying for electricity, studio facilities or any other operational costs,” said a spokesman.

This issue has come to the fore as the BBC sets about completing the implementation of its £700 million cost-cutting plan, with the BBC and Channel 4 arguing that Sky has failed to recognise the benefits that carriage of their services brings to the satellite platform.

In January, culture minister Ed Vaizey used a speech at the Oxford Media Convention to call on BSkyB to cut the fees. Vaizey said the government wanted “to see a solution to the current situation on so-called retransmission fees where Public Service Broadcasters and licence fee payers have paid large amounts to satellite providers for the content to be carried” and said that “zero fees either way” would mirror the arrangement currently in place between public service broadcasters and cable platforms.

Vaizey said that “if the industry can’t find a way to stop imposing this cost on licence fee payers and PSBs, we will look at our options for intervention”.