Under James Murdoch, Sky had planned to pull its three free-to-air channels, which include Sky News, and replace them with a premium line-up available through a new-specification digital-terrestrial set-top box.
The Sky offering would have included some coverage of Premiership football to combat the expected impact of Setanta showing live games on its sports channels from next summer. The introduction of the pay channels was also intended to take advantage of Freeview's popularity; it is available in 8.2m homes, according to Gfk.
Sky's proposals prompted rival broadcasters, including Setanta and pay-TV service Top Up TV, to lobby Ofcom to launch an investigation into the pay-TV market, and Sky's position within it.
Sources said that Ofcom has decided Sky will not be permitted to axe Sky News from the platform, although a spokesman for the regulator said that the formal application, including a public consultation, has not yet begun and that Ofcom has asked Sky to submit additional information. A Sky spokesman said: 'We have made an application to Ofcom and are in dialogue about what happens next.'
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