BBC plan to create regional websites rejected

I found this development strangely disturbing. On the one hand, I can understand the "protectionism" but on the other hand I dislike a government agency interfering with internet content development.

British regulators rejected a plan on Friday to add locally focused
video news to BBC Web sites in Britain, dealing a setback to the
digital ambitions of the BBC, which has expanded aggressively on the
Internet.

The BBC Trust, which oversees the public
broadcaster, and Ofcom, the British media regulator, said the proposal
would have hurt rivals in the private sector, including the Web sites
of newspapers. Under the plan, the BBC wanted to spend £68
million, or $100 million, and hire 400 people to provide news, sports
and weather for dozens of local BBC Web sites.

Commercial rivals
said the £3 billion in public financing that the BBC receives
each year gave it an unfair advantage. The BBC Trust, which was created
last year, previously approved other contested BBC Internet
initiatives, including the addition of advertising to the BBC News Web
site outside Britain.

The decision on Friday was “the first major example of the trust showing its muscles,”
Roy Greenslade, a British media commentator, said in a blog entry on
the Web site of the newspaper The Guardian. “In that sense, it is
a landmark moment in broadcasting history.”

The move drew
interest across Europe because regulators in several countries,
including Germany, are scrutinizing public broadcasters’ digital
plans. The European Commission, in a proposal published this month, suggests that governments impose stricter conditions on financing for public broadcasters.

“In as far as commercial broadcasters, and indeed publishers and
other media owners, were looking for greater certainty that this kind
of scrutiny can work, this is a very positive step,” Ross Biggam,
the director general of ACT, a lobbying group for commercial
broadcasters that is based in Brussels, said of the British decision.

Ofcom said that if the BBC’s local video plans had gone ahead,
newspapers and other commercial providers of local news would have lost
readers and advertisers. They would have also been discouraged from
starting new services on the Web, the regulator said.

Underlining the challenges facing British newspapers, Enders Analysis,
a research firm, said Friday that their advertising revenue would fall
21 percent next year. Newspapers have been hit particularly hard
because of the migration of classified advertising to the Internet.

The BBC’s local video plans “would have been a
disproportionate step into a market where the private sector was
already active,” said Angela Mills Wade, executive director of
the European Publishers Council. “Now local publishers can
innovate in this area without the fear of getting squashed by a giant
elephant.”