The BBC's governing body has ignored objections from pay-TV providers by clearing the broadcaster to take part in Project Canvas, a joint-initiative to develop a common on-demand IPTV platform.
The service, which will bring video-on-demand to Freeview and Freesat viewers, is expected to go live in 2011, however the BBC Trust has demanded that the BBC’s spending on the project be capped and that it publishes technical specifications for the service within the next three weeks, the Guardian reports.
It must also consult with other broadcasters, which could prove a sticking point given that pay-TV firms BSkyB and Virgin have objected to the BBC’s involvement, and could yet move to block the IPTV service, the UK daily said.
The UK’s Office of Fair Trading could also probe the venture.
Project Canvas is a BBC-backed venture between the UK's four terrestrial broadcasters – BBC, Channel 4, ITV and five – and operators BT, Arqiva and TalkTalk.
It aims to develop a common on-demand internet television platform in the form of a set-top-box granting access to content from each broadcaster. This service is widely expected to be named YouView.
The project is expected to cost £115.6 million (€140.5 million), with each partner contributing an equal amount.
While the BBC originally planned to invest £24.7 million in the scheme, the addition of new partners has reduced the cost to around £16.4 million, meaning the broadcaster should easily meet the Trust’s stipulation that the broadcaster should not exceed its planned investment by more than 20%.
The Trust estimates the project will drive the market for connected TV devices in the UK by 70% in 2015.