BSkyB's plans to replace its free-to-air channels on digital terrestrial television (DTT) with pay-TV services are to be scrutinised.

The pay-TV giant announced earlier this week that it wanted to replace the three free-to-air channels it currently offers on Freeview with five subscription channels.

But the UK's media regulator said today that the plans raised potential concerns about competition and has launched a consultation on the proposals.

Ofcom stressed however that it was not making a specific recommendation in regard to the plans at this stage.

Under exiSting arrangements BSkyB provides Sky News, Sky Sports News and Sky Three on the DTT platform on a free-to-air basis.

But the company now wants to replace the channels with Sky Sports 1 and in the evening with Sky One and Sky Movies SD1. The remainder of BSkyB's capacity would be used to offer a factual channel and a children's channel from third party providers during the daytime.

Ofcom said that while the Sky proposal would increase the choice and availability of pay-TV services on the DTT platform, it could make prevent other providers from operating on Freeview, which has a limited capacity.

Explaining the reasons for its decision to consult on the plans the regulator stressed: "Ofcom wants to ensure that consumers have the benefit of innovation and new services on digital TV while ensuring fair and effective competition in pay-TV, both on DTT and more widely."

BSkyB has claimed that its proposals, which it is seeking to put into practice as part of a new service known as Picnic, will benefit its customers. The company's chief executive James Murdoch described the plans as a "big step forward for customers who are hungry for value and simplicity".

Ofcom's decision to review the plans will come as a further blow to BSkyB, which was told by the Competition Commission earlier this week that its 17.9 per cent stake in broadcaster ITV restricted competition.

04/10/2007 11:21:01