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BSkyB faces a fine of up to £230m and a rethink of its

distribution strategy after the Office of Fair Trading (OFT) suggested

this week it had breached competition laws.

The OFT said it proposed to rule that BSkyB has abused its dominant

position in the market in the way it priced its premium channels, such

as Sky Sports 1 and Sky Premier.

BSkyB, under chief executive Tony Ball, has until March 29 to submit

evidence to the OFT. A final ruling is expected in mid-2002.

Should the Murdoch-owned satellite broadcaster lose its fight, rival

broadcasters such as Telewest, NTL and ITV Digital, which have paid

millions to show its channels, may sue BSkyB for damages.

"It is potentially good news for consumers and for competition in the

pay-TV market. We have long argued that Sky has abused its dominant

market position," said an ITV Digital spokesman.

A spokesman for BSkyB said: "BSkyB has not infringed the Competition Act

and welcomes its first opportunity to put its case to the OFT."