Ofcom has criticised plans from the BBC to offer all its TV and radio programming on-demand online.
The broadcast regulator is worried that the BBC's planned on-demand service may have a 'negative effect' on its commercial rivals, deeming it likely to limit their investment. It said such a situation 'would not be in the long-term public interest'.
The comments were made in Ofcom's first market impact assessment looking at BBC proposals for future services.
The assessment examines how an on-demand download service would impact the market. The regulator has given the whole report to the BBC Trust - which oversees the broadcaster - for it to evaluate both the service, and the public value such a service from the BBC would provide.
Rival services may suffer
The BBC on-demand service - which could see BBC programmes being aired simultaneously online and on TV - will rival Channel 4's recently launched 4oD , as well as ITV's forthcoming on-demand service.
Ofcom is also worried that DVD sales and rentals might suffer as an effect of the BBC service. It has advised the BBC to only allow users to keep programs for a restricted time period, proposing 14 days rather than the planned 13 weeks.
The Ofcom assessment says: "The ability to store programmes for up to 13 weeks could have negative effects on competition and therefore investment in consumer choice. Ofcom believes this storage window should be reduced or removed."
The BBC on-demand service will be supported by an application called iPlayer , and will also be available through NTL/Telewest's cable TV service.
By 2011, Ofcom estimates that the BBC on-demand service could account for around four billion viewer and listener hours.
