Ofcom has launched an inquiry into BSkyB's plans to offer pay-television channels using its current Freeview capacity.

The broadcaster currently provides Sky News, Sky Sports News and Sky Three on the digital terrestrial television platform on a free-to-air basis.

Under the new plans, these channels would be replaced with Sky Sports 1, Sky One and Sky Movies 1.

Sky also plans to use the remainder of its capacity in the daytime to sell two further channels from third-party providers, including one factual and one children's channel.

The public consultation will judge whether Sky and its Freeview subsidiary National Grid Wireless will have an impact on competition if they get the go ahead.

"Sky welcomes the fact that the process is moving forward," a spokesman for the broadcaster told vnunet.com.

The proposed Picnic service will offer broadband, telephone and digital terrestrial television services.

"Picnic will increase competition in TV, broadband and phone services and bring viewers a better choice of channels through their aerial," said an official Sky statement.

"Sky believes these plans are a positive step for the digital terrestrial TV platform and we look forward to responding to Ofcom's consultation in due course."