Business

Can Hunt do Murdoch deal over Ofcom concerns?

BBC business editor Robert Peston on News Corp and BSkyB

Thinking is frequently a bad idea.

Last week I thought it was unlikely (though not impossible) that the culture secretary, Jeremy Hunt, would be negotiating with James Murdoch of News Corporation to remedy the harm to media plurality or choice that Ofcom has concluded would be the consequence of News Corp's £7.5bn plan to buy all of British Sky Broadcasting.

Today I think Mr Hunt is doing just that - or at least over the past few days a number of informed sources have told me that is what Mr Hunt is doing.

And there is quite a lot of sizzling detail about all this in today's FT.

As I revealed in a post earlier this month, Ofcom has made a clear recommendation to Mr Hunt that the proposed takeover should be referred to the Competition Commission for further scrutiny, because of the potential damage to plurality or media choice for citizens, especially in the provision of news.

However when I said that I thought it was unlikely that Mr Hunt would endeavour to negotiate a way around this impasse, my reasoning was that I thought Mr Hunt would wish to avoid the perception that he is bending over backwards to help News Corp - particularly in the wake of what happened to Vince Cable, the business secretary, when he was seen to be prejudiced in the other direction (that perceived bias earned Mr Cable a rebuke from the prime minister, who transferred responsibilities for media policy and regulation from the Business Department to Mr Hunt's department).

Now sources close to Mr Hunt deny he is doing any favours for News Corp or for James Murdoch, who runs all of News Corp's European and Asian operations.

They insist there is nothing strange in Mr Hunt's failure yet to publish Ofcom's report - which he received on the last day of 2010 - or to say how he will respond to its recommendation.

Everything he is doing, his colleagues say, is guided by the culture department's lawyers. And his aim is to minimise the prospect of a legal appeal against whatever he ultimately decides is the right way of responding to Ofcom's judgement.

Which is a bit puzzling because sources close to News Corp tell me that they don't regard a reference to the Competition Commission as such a dreadful outcome - which rather implies New Corp isn't poised to resort to the courts at this stage.

A legal challenge would in fact be much more likely from other media groups if Mr Hunt were seen to be wilfully ignoring Ofcom's recommendation by not ordering an investigation by the Competition Commission.

Anyway it's not proving quick or easy for Mr Hunt to make up his mind. Officials tell me that we're unlikely to hear Mr Hunt's verdict till the end of the month - and perhaps not till early February.

All that said, the notion that Mr Hunt might not follow Ofcom's advice makes sense of one thing that has been puzzling me.

Given that the Ofcom's recommendation is of relevance to an assessment of the value of BSkyB's shares, I've been slightly surprised that the culture department hasn't been forced by the Financial Services Authority to put out some kind of statement to the Stock Exchange, following the leak to me of Ofcom's verdict.

Of course, such a statement would not have been necessary from Mr Hunt if there were a reasonable chance that he won't be following Ofcom's advice.

You can keep up with the latest from business editor Robert Peston by visiting his blog on the BBC News website.

More on this story

Around the BBC