Aug. 29 (Bloomberg) -- James Murdoch, chief executive officer of News Corp.’s European and Asian division, defended his attack on the British Broadcasting Corp. and regulator Ofcom, which he said stifled independence and wasted money.

Speaking at the Edinburgh International Television Festival today, Murdoch said the state-funded BBC should compete less with private companies in providing news and buying shows. News Corp.-controlled British Sky Broadcasting Plc, the U.K.’s biggest pay-TV provider, competes for viewers with the BBC.

“We can either have perpetual growth of the state sector or we can have a flourishing independent news media and allow enterprise to really be the center of driving good things in the market place for people,” he said. “But you can’t have both.”

Murdoch, 36, son of News Corp. CEO Rupert Murdoch, was promoted in 2007, putting him in line to succeed his father. He gave a lecture last night in the Scottish capital criticizing what he called government interference in television.

James Murdoch said the license fee paid by British households with a television set is a “regressive” tax and penalizes the poor. The fee funds the BBC.

Ofcom has said that BSkyB may be using its “market power” in the wholesale supply of channels to limit their distribution to rivals, thereby restricting consumer choice. Ofcom is consulting on proposals to regulate prices.

Murdoch said Ofcom’s decision to intervene should be “based on hard evidence of harm.” He today blamed the regulator for “tinkering” and “micro-management.”

Lost Opportunities

“We have limited choice, and we have central planning,” Murdoch said yesterday. “The result is lost opportunities for enterprise, free choice and commercial investment.”

Murdoch oversees Asian broadcaster Star Group Ltd., U.K. newspaper unit News International, whose publications include The Sun, and Italian pay-TV operator Sky Italia. The Italian business has about half the subscribers after five years that Sky has gathered in the U.K. after about 20 years, Murdoch said.

The governance of U.K. broadcasting is authoritarian, he said. “This whole approach is based on a mistaken view of the rationale behind state intervention and it produces bizarre and perverse outcomes,” he said, adding that BSkyB spends 1 billion pounds ($1.63 billion) a year on U.K. content.

To contact the reporter on this story: Rodney Jefferson in Edinburgh at r.jefferson@bloomberg.net

Last Updated: August 29, 2009 09:10 EDT