Sky empire faces being broken up

The idea is to separate the content side of Sky from its satellite distribution arm. It's not such a far-fetched idea as some analysts are suggesting.

A very similar thing happened to BT which was forced to separate its network arm - Outreach - from the rest of the BT empire so that all broadband suppliers faced a level playing field.

According to a report in The Independent on Sunday, the proposal was submitted to Ofcom earlier in the year but a Bskyb spokesperson said, "We're in the increasingly odd position of not having seen this submission."

One benefit from the proposal would be that it would force Bskyb to offer transparent wholesale prices for its content. That would make it easier for the company's rivals to offer content such as Sky Sports and Sky Movies.

It would be hard for Sky to argue that it didn't have a near stranglehold over premium sports content - especially since it bought a significant stake in another content provider, ITV.

The newspaper report argues that under the new Enterprise Act, it would be relatively easy for Ofcom to enforce a breakup of Sky without having to find the company guilty of any specific offence.

Rupert Murdoch's empire has always had a cosy relationship with the British government but with a new hand at the till, this protection might just disappear.

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