Ofcom 'closely monitoring' phone-hacking claims with regard to BSkyB bid

Broadcast regulator Ofcom has said it is "closely monitoring" the revelations about phone hacking at the News of the World in reference to the bid by the newspaper's parent company News Corp to take full control of broadcaster BSkyB.

In a statement today, the regulator acknowledged that it has a duty "to be satisfied on an ongoing basis that the holder of a broadcasting licence is 'fit and proper'".

The statement stressed it was "not for Ofcom to investigate matters which properly lie in the hands of the police and the courts", but said that it was "closely monitoring the situation and in particular the investigations by the relevant authorities into the alleged unlawful activities".

A spokesperson for the regulator told Journalism.co.uk it was not launching any kind if investigation into the revelations about phone hacking but would continue to monitor the situation.

Ofcom recommended in January, that News Corp's bid should be referred to the competition commission. It advised secretary of state Jeremy Hunt that the bid "may be expected to operate against the public interest".

However, following undertakings from News Corp to "spin off" Sky News under a separate entity, Newco, in an effort to ensure media plurality, Hunt decided against referring the bid to the commission. But Ofcom retains the power and obligation to make sure that the owners of broadcasters such as BSkyB are fit and proper.

Hunt was attacked by Labour MPs in the House of Commons today for appearing to stick to his statement that he was ready to give the bid a green light, despite damning revelations about phone hacking at News Corp newspaper the News of the World.

Former home secretary Jack Straw said: "Now that the secretary of state is in possession of information relating to News Corp which he could not have possibly have been in possession of when he made his initial decision, it must be open to him as a matter of law and make the reference that is now sought."

But attorney general Dominic Grieve defended the culture secretary's position, stressing that he was subject to a quasi-judicial process and would be breaking the law to change course based on new information about phone hacking.

Grieve added that it was for Ofcom to decide whether News Corp was a fit and proper organisation to hold a broadcasting licence, and not the secretary of state.

Labour MP Chris Bryant, who has campaigned for a public inquiry into phone hacking, agreed that it was for Ofcom to rule on the fit and proper person issue, but argued that they could not do so unless Hunt paused in his decision-making process over the bid, which is currently under a week's further consultation and could be completed by as early as the end of the month.

However, Grieve responded that Ofcom had the power to intervene at any stage in the process if it felt that News Corp was not fit and proper to hold a broadcast licence.

Former Liberal Democrat leader Menzies Campbell asked Grieve; "Does not the government, as the overall regulating authority, retain a discretion in relation to the management of this industry throughout the United Kingdom?

"And does not that discretion allow the government to give consideration as to whether the directors of any company have been fulfilling their public obligations?"

Grieve said that he had "no doubt" that Campbell was correct, and that his question would be "borne in mind by the government in reviewing the process of this takeover bid and indeed the competition laws underlying it". He went on to reiterate that the government had a process to follow in terms of making a decision over the bid, and stressed that Ofcom was "entirely independent of the government" and said he was "not the person who who should be offering my opinion to Ofcom on the matter".

Labour leader Ed Miliband also called for a pause in the decision-making process during prime minster's questions this morning.

Cameron responded: "If you don't follow the correct legal processes you will be judicially reviewed and all the decisions you would like to make from a political point of view will be struck down in the courts".

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