In a ruling on Thursday, Ofcom said: “In July 2011, in light of the public debate about phone hacking and other allegations, Ofcom confirmed that it had a duty to consider whether Sky was fit and proper to continue to hold its broadcast licences.
“Ofcom considers that, on the evidence currently available and having taken into account all the relevant factors, Sky is fit and proper to hold its broadcast licences.”
Ofcom said, however, that “should further evidence become available” it may review the issue. Criminal investigations into phone hacking continue and several court cases involving senior executives from News International are pending.
However, the conduct of James Murdoch, who resigned as chairman of BSkyB in April (but remains a non-executive director) and has also relinquished his role at the UK newspaper group, was questionable, Ofcom concluded.
The regulator said: “Ofcom considers on the basis of the evidence available to date… James Murdoch’s conduct in relation to events at NGN [the newspaper group] repeatedly fell short of the conduct to be expected of him as a chief executive officer and chairman.
“However, Ofcom considers that the evidence available to date does not provide a reasonable basis to conclude that James Murdoch deliberately engaged in any wrongdoing.”
While acknowledging that many of the circumstances over phone hacking were outside of Mr Murdoch’s control or unknown to him, Ofcom criticises severely his failure to make himself aware of the deepening scandal.
“We consider James Murdoch’s conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged.
“We consider that the events… raise questions regarding James Murdoch’s competence in the handling of these matters, and his attitude towards the possibility of wrongdoing in the companies for which he was responsible,” Ofcom said.
The regulator said that Mr Murdoch’s non-executive role on the BSkyB board did not impact on its “fit and proper” test, because there were other “experienced individuals who would be expected to be capable of exercising effective independent oversight”.
Ofcom continued: “We recognise that whether it is appropriate for James Murdoch to be a director in light of the events is a matter for the board and shareholders of Sky.”