Murdoch's BSkyB to buy The Cloud's Wi-Fi hotspots

Satellite broadcaster BSkyB is to buy Wi-Fi hotspot network The Cloud, according to a report published yesterday in The Sunday Times.

BSkyB has yet to comment on the report - but it seems unlikely that the Sunday Times would have got its facts wrong. The paper is owned by News International, the UK subsidiary of media tycoon Rupert Murdoch's News Corporation, which holds a controlling minority stake in BSkyB.

News Corp's proposed takeover of BSkyB is currently being mulled over by culture secretary Jeremy Hunt, who last year received a report from communications watchdog Ofcom, which is believed to recommend that the deal be referred to the Competition Commission.

By buying The Cloud, BSkyB would enable its Internet service provider arm, Sky, to provide its 2.8 million home broadband customers with access to broadband away from home, similar to the way rival BT offers its subscribers Internt access via its BT OpenZone network.

The Cloud has a network of 22,000 publicly accessible Wi-Fi hotspots around Europe, including locations in cafes, bars and restaurants.

The Sunday Times article (which is behind a paywall) also hints that a deal to buy The Cloud could provide BskyB with a new way to distribute its TV programmes, noting: "Sky already offers its subscribers sport and news content on their mobiles but this deal promises to improve the service."

The new deal could also enable BSkyB to drum up revenues by aggressively marketing the service to other content providers as a way of getting their audio and video content in front of a growing mobile audience.

Broadband minister Ed Vaizey recently suggested that he supports a watering down of net neutrality - the principle that all Internet content should be given equal priority - opening the way for ISPs such as Sky to charge premium rates for streaming higher-bandwidth content such as video.

In the past, online media operators such as MySpace and the BBC have subsidised The Cloud to serve their content for free.

By charging content providers to serve their content, The Cloud would be going head-to-head with BT's newly-announced pay-to-stream service, Content Connect, which offers video content providers with a higher-quality service streamed from localised servers.