From May 30, when the existing contract with BSkyB expires, the BBC will end its £85m carriage deal with Sky. It will broadcast its eight TV channels, including BBC One, BBC Two and digital channels BBC Three, BBC Four and BBC News 24, on a free-to-air unencrypted digital satellite signal.
This means viewers will be able to watch the BBC's channels without a Sky viewing card, through any make of digital satellite receiver. The broadcaster said current and future Sky subscribers will still be able to receive the channels.
The move was welcomed by the UK broadcasting establishment as both Channel 4 and ITV came out in support of the BBC action.
BBC director general Greg Dyke said: "This is an important decision for the BBC, which will save us a considerable amount of money. It will also bring new benefits to viewers right across the country, will broaden the appeal of digital satellite and enable as many people as possible to get the BBC's digital channels."
The row over the cost of carriage on Sky Digital has been brewing for months. News that the BBC was thinking of pulling its channels from the network first emerged in October. At the time, the BBC denied the reports, saying: "The BBC has a long-standing commitment to broadcast its television, radio and interactive services on all platforms and, as such, has no plans to pull its services from satellite television. Our contract to be on the BSkyB platform comes up for renewal next year, and all negotiations will be done in the best interests of licence-fee payers."
Channel 4 responded quickly to the news and said that, while it had no plans to follow suit, it saw the move improving public service broadcasting.
Channel 4 chief executive Mark Thompson said: "We have a satisfactory broadcast arrangement in place with BSkyB for some years ahead and there is no immediate need for Channel 4 to follow the BBC's lead.
"However, we believe that the BBC's move, if successfully implemented, will improve the chances of the UK's public service broadcasters, including Channel 4, continuing to reach viewers by digital satellite at a sensible cost in the longer term and for that reason we welcome it."
ITV said it understood entirely why the BBC has felt it necessary to take this course of action. Clive Jones, joint managing director of ITV, said that the public service broadcasters have long argued that the price Sky charges for conditional access is too high.
He said that although ITV currently needs Sky's conditional access facilities in order to deliver the best regional service to viewers, the service was far too expensive.
"We understand entirely why the BBC has felt it necessary to take this course of action and wish it every success. The £17m per annum ITV pays for this service bears no relation to the actual cost of the service, which we estimate to be no more than a few hundred thousand pounds, and is in stark contrast to the other two digital platforms, which provide viewers with the right regional variant of our channels at no extra cost."
Jones laid the blame on the regulator and said it was this body that allowed a dominant market player to extract monopoly prices from customers without fear of recourse from the regulator.
"We hope the BBC's announcement will focus the minds of peers on this issue as the communications bill enters the House of Lords. We are calling for an amendment to the bill that will require Ofcom to take account of the particular nature of public service broadcasters and their obligations to viewers when deciding whether Sky's charges are appropriate. We are happy to pay a fair rate to Sky, but if we have to divert millions of pounds from onscreen investment to underwrite Sky's pay-TV business, it is viewers who will ultimately lose out," he said.
From the money it will save, the BBC said it will improve access to its national services in Scotland, Wales and Northern Ireland, as well as making all 15 regional variations of BBC One in the UK available on digital satellite and listed together on Sky's Electronic Programme Guide.
"For the first time ever, all the BBC's regional and national services will be available to viewers right across the UK. This means that a Scot living in London can get BBC One Scotland, or a native of Yorkshire living in Cornwall could watch regional programmes from their home region," Dyke said.
The BBC said the decision allowed it to move all its channels on to one satellite, Astra 2D, which will also mean it can limit their reach to the UK, eliminating the need for encryption for rights purposes.
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