More info from The Gaurdian:
"Irish twist to BBC/Sky row
Owen Gibson
Monday March 17, 2003
The BBC is facing exile in up to 6.6 million TV homes in an extraordinary power struggle that could force the government to choose between Rupert Murdoch and Greg Dyke.
The BBC director general's decision to sever ties with Sky TV in digital satellite broadcasting will mean viewers may no longer see BBC1 and BBC2 listings pop up first when they switch on their TVs because of a conflict of interest with an Irish broadcaster.
Instead it is likely viewers will to have to scroll through six pages of listings to find the two main BBC channels, which will be relegated to 52nd and 53rd slots in the on-screen equivalent of the Radio Times that helps satellite viewers navigate through hundreds of channels.
The demotion of BBC1 and BBC2 could have enormous impact on the corporation's audience figures and force a showdown with regulators and the government.
"This is a negotiating gambit and it is as much about the BBC and what it wants from the government as it is about what the BBC wants from Sky ," said one source close to the situation.
The BBC announced last week it was cutting free of the BSkyB TV network in a bid to save £85m in encryption fees, but it has now emerged that a contractual arrangement with RTE in Ireland could hamper its plans to go it alone.
The BBC currently pays Sky TV £150,000 a year to have the two top slots in the "electronic programme guide" but once the corporation moves to its own satellite, which will also broadcast straight into Ireland, it will no longer be guaranteed the prime positions.
RTE 1 and Network 2 channels are guaranteed the two top slots in the Republic and BSkyB insiders have indicated they will not be prepared to move them to make way for the BBC's new unencrypted broadcasts.
At the moment both the BBC and RTE can take top slots in the countries they serve because the conditional access technology allows parallel EPGs in different regions.
But because the BBC plans to use a new satellite that has a cross-border footprint this will become no longer possible.
Mr Dyke today insisted he will go ahead with the move, even if the BBC channels were relegated to the bottom of the list on the EPG.
But as the number of television channels on the Sky Digital system continues to multiply, the BBC's digital channels face getting lost among the hundreds of channels available.
Research shows digital TV viewers are notoriously fickle and if they can't find what they want to watch immediately are likely to give up and watch something else.
And even if RTE was willing to move for the BBC, the broadcaster does not have the right to "trade" their slots with the BBC channels because the system is managed by Sky, which is obliged to provide EPG slots on a "fair and non discriminatory" basis.
"Anything that requires differentiation for different regions requires some sort of conditional access service from Sky. I don't see how the BBC are going to get around this," said one City analyst.
Executives at Murdoch-controlled BSkyB and at least one former ITV executive believes Mr Dyke's latest move is designed to force the government to introduce a lifetime guarantee maintaining the BBC's position at the top of the EPG.
"The BBC is doing exactly what we thought we could do at ITV. It just won't work," said the former ITV executive.
However, the culture secretary, Tessa Jowell, has made it clear in earlier stages of the communications bill that she is not going to intervene in a new "must carry" row about BSkyB carrying BBC channels.
Last week the government's media adviser, Ed Richards, told an advertising conference the BBC's decision was part of commercial negotiations between the two companies and the government would not intervene.
The BBC said there were a number of technical issues it intended to discuss with Sky and for which it expects to pay a "fair market rate", including the issue of switching between various regional versions of its programmes.
"The BBC will try to paint Sky as some sort of evil operation and force the government to take sides," said one industry observer.
A BBC spokeswoman played down the concerns, saying: "These are the very points about which we are going to start negotiating with Sky. However, if things aren't working out, we will go to Oftel and take other steps.""
As I said before the BBC are really making the situation worse.
