Britain's media regulator, Ofcom, is to launch an investigation into the pay-TV market.
The announcement follows a spat between BSkyB and Virgin Media and the news that it is also being investigated over its purchase of an 18% stake in Britain's largest commercial broadcaster, ITV.
Regulator Ofcom said it would investigate the market after receiving a submission from BSkyB's smaller rivals BT Group Plc, Irish group Setanta, Top UP TV and Virgin Media.
Ofcom is to consider whether to refer the market for further scrutiny from the Competition Commission in an investigation which could last many months.
If referred, any Competition Commission enquiry could last up to two years. It could then impose structural remedies such as asking groups to sell off some of their assets or behavioural remedies over how they sell their products.
BSkyB, which has Murdoch's son James as its chief executive, immediately rejected any suggestion it had reduced competition.
The investigation will cover subscription and video-on-demand TV on cable, digital terrestrial television (DTT) or Freeview, satellite and TV over the Internet.
It will also look specifically at BSkyB's plans to remove three of its free channels -- Sky News, Sky Sports News and Sky Three -- from the popular Freeview platform to make way for subscription-based channels showing soccer and movies.
That decision put BSkyB in direct competition with Setanta and Top Up TV which are set to use a different subscription system on Freeview to show some Premier League games.
