In a 163-page report issued late last week, the U.K. Competition Commission (CC) concluded that British Sky Broadcasting (BSkyB) should divest most, but not all, of the 17.9% stake it acquired in ITV in November 2006. ITV and BSkyB rank as the largest terrestrial broadcast and satellite television operators, respectively, in the United Kingdom. BSkyB paid U.S. $1.78 billion for the ITV stake in a transaction that resulted in BSkyB becoming ITV’s single largest shareholder. Noting that BSkyB “faces competition from the free-to-air TV offer, of which ITV is an important part,” the CC determined in October that BSkyB’s ownership of the stake in question “would be likely to lead to a substantial lessening of competition by giving [BSkyB] the ability to influence ITV’s strategy.” Following on that provisional ruling, the CC concluded last Thursday that BSkyB should partially divest its ITV stake to a level of 7.5% or lower on grounds that “below this level, there would be no realistic prospect that BSkyB would be able to exercise material influence in the ways that we had identified.” The CC also determined that BSkyB should refrain from seeking a seat on the ITV board and be restrained from conducting a partial sale of its shares to its affiliates. John Sutton, the U.K. secretary of state for business and enterprise, is expected to issue a final decision on the matter by January 29. Although Sutton must accept the CC’s findings with respect to BSkyB’s ITV holding, he can impose a remedy that differs from the partial divestiture recommended by the CC. A spokesman for BSkyB promised that BSkyB would “consider the contents” of the CC report and “make representations to Sutton in due course.”