BBC gets into bed with Rupert Murdoch

The BBC has dumped ITV and Channel Four in favour of BSkyB as it applies for the terrestrial digital TV licences left by the demise of ITV Digital.

The two broadcasters will apply to the Independent Television Commission (ITC) this week for licences to run a free-to-air digital service.

The service would be funded by BBC licence fees and advertising and would be available to viewers through receivers costing £100, according to a newspaper report this morning.

Both broadcasters have been touted as possible bidders since ITV Digital hit tough times earlier this year. Reports last month suggested a licence bid by BSkyB had received the backing of the ITC and the government.

However, a spokeswoman for the BBC told silicon.com today: "There is no official announcement. This is speculation on the part of The Times. The BBC is in talks with various people on this."

But any such move is bound to anger rival broadcasters ITV and Channel 4, both of whom were forming a consortium with the BBC to apply for a licence.

The BBC is reported to have switched alliances after failing to agree on how the licences would be divided.

The joint BBC-BSkyB service would include Sky News, Sky Sports News and Sky Travel as well as the BBC's current digital channels, BBC Choice, BBC Four and BBC News 24.

Sky One could be included at a later date if audience take up reaches targets.

Channel Four will now apply for licences with Carlton and Granada - the companies behind the defunct ITV digital.

While Carlton and Granada are also interested in free to air services, Channel Four will seek licences for its subscription-based E4 and FilmFour offerings.

The deadline for licence applications is 17:00 (BST) tomorrow. The ITC has said it will deliver a verdict by 4 July.

For related news, see:
Prebble wobbles as ITV Digital falls down
http://www.silicon.com/a 53103
ITV Digital: Who is to blame?
http://www.silicon.com/a 53057
Lights go out at ITV