Sky attacks BBC's use of licence fee to fund Project Canvas

LONDON - BSkyB has issued a strong objection to the BBC's use of taxpayer's money to fund Project Canvas in a submission to the corporation's regulator the BBC Trust.

Canvas, a joint venture between the BBC, ITV, BT and Five, is set to materialise in time for Christmas 2010 when new digital set-top boxes -- expected to be priced between £100 and £200 -- are expected to hit shelves.

The boxes will allow viewers to watch internet-based services such as the iPlayer via their TV as part of an attempt to play catch-up with pay-TV rivals such as Sky.

Sky is not complaining about the BBC's plans to use the internet to deliver programming to TV sets via a set-top box, instead the satellite broadcaster is concerned the corporation will "stifle innovation" in the market.

The company believes the BBC licence-fee funded attempt to establish its own platform rather than contributing to an industry-standard system for delivering online content to TV sets will impede new developments in the market.

Stephen Nuttall, Sky's commercial director, said: "They shouldn't go off and do their own thing and use their unique funding to drive a coach and horses through the market development."

Sky wants the Trust to force the BBC to allow anybody -- not just public service broadcasters -- to join Canvas. The company's SkyPlayer could potentially be incorporated into Project Canvas.

Sky's submission to the BBC Trust will be published today, while the BBC has not yet revealed how much it is investing in Project Canvas.

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