Regulator Ofcom has announced it is to launch a consultation into Sky's proposed Freeview-based service. The broadcasting giant said earlier in the week it wanted to launch a subscription TV service instead of the free channels it currently shows on Freeview.

The service would target those who didn't want to pay for full-fat Sky packages - the same segment targeted by rival services such as BT Vision.

The service would show Sky Sports 1 and in the evening Sky Movies and Sky One via the subscription service. However, it would mean the replacement of Sky's current key free-to-air offerings on the platform - Sky News, Sky Sports News and Sky Three. According to Ofcom, Sky "would use the remainder of its capacity to retail two further channels from third party providers in the daytime: a factual channel and a children's channel."

Ofcom says it will now be considering the impact on competition and the consumer interest: "As digital switchover approaches, the DTT platform is reaching a significant transition point which may have implications for the development of pay TV services."

"It is essential that Ofcom considers how it can best ensure fair and effective competition for the benefit of consumers in the light of the development of the DTT platform, Sky's strong market position in pay TV and the specific aspects of the proposal."

However, the regulator seems to concede that "consumers would be presented with an increase in choice."

The consulation ends in December. Sky currently has 8.6 million pay TV customers.