UPDATE:  I should add — I am now a News Corp (Class A) shareholder … as of 25 Jan 08, although not in significant amounts (sadly)…

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Folks, by now everyone has seen the outcome of the government’s review of BSkyB’s 17.9 percent stake in ITV. The full details can be found on the DBERR website: here. The upshot: BSkyB is told to divest down to below 7.5 percent.

I thought the most interesting aspect of DBERR’s decision was its endorsement of the logic of the Competition Commission with respect to the nature and scope of the competition law remedy:

‘The Competition Commission recognised the potential for these remedies to reduce the scope for BSkyB to influence ITV’s strategy although it also noted the risks inherent in a long term remedy that places complete reliance on the independence of a third party and the need for continued monitoring of actual performance and of the contract between BSkyB and the voting trust. (emphasis added)’

But wasn’t contract-based separation (with 230 undertakings) and long-term monitoring the government’s preferred remedy in the BT Settlement? How is that consistent?

Surely that is the weakest part of the government’s decision and one that I imagine a court would ultimately over-turn. I’m guessing a court would find that — if the government intends to intervene on a massive scale and use a somewhat vague public interest justification to block media ownership that is otherwise consistent with the thrust of the 2003 Act — then it needs to tread carefully and use the absolute least intrusive means by which to ensure the public interest. In this case Sky proposed safeguards to address media pluralism concerns and the government appear to have been too quick to dismiss them in this case. But the same government readily accepted similar remedies in the case of BT. (And let’s keep in mind — the public interest harm with Sky was predicted — with BT it was demonstrated).

Onward and upward…