ITV drops complaint as Sky talks resume

ITV has withdrawn a formal complaint against BSkyB as it begins contract negotiations with the satellite broadcaster over the broadcast of ITV's regional variants.

The complaint was lodged at the end of last year. ITV said the payments it makes to BSkyB to ensure its satellite viewers receive the correct regional version of ITV1 were unreasonable and in breach of BSkyB's obligations under European Union law.

Ofcom said it had closed its file on the case, but ITV said that once the negotiations were over, it might want to make the complaint again.

Negotiations on payment for regionalisation services broke down last year when ITV made the complaint. It is understood ITV wants a big reduction of the £17 million it is believed to pay BSkyB each year to encrypt and regionalise its channels.

Regionalisation means that viewers around the country get region-specific ITV1 on Sky Digital's Channel 103.

ITV's public-service obligations require it to show region-specific programming. It also derives significant revenue from advertising tailored to local audiences.