Is it time OFCOM revisited its fit and proper person test for Sky?

Today we hear the news that James Murdoch returns to  the Chairman's post at Sky   the BBC reports 

He quit after News Corp, his father Rupert's business, failed to push through a takeover of the broadcaster.

News Corp owned 39% of the BSkyB business.

James Murdoch also resigned as chairman of News International after claims that journalists working for the organisation had hacked into phones of celebrities

shouldn't that be he mainly quit in the aftermath of reporting of the Phone Hacking scandal to prevent BskyB failing a Fit and proper person test and losing its broadcasting licence?

Let's look at the Ofcom Report here  In its conclusions  Ofcom says

"33. In our view, the evidence available to date does not provide a reasonable basis to find that James Murdoch knew of widespread wrongdoing or criminality at NOTW or that, by allowing litigation to be settled and by allowing NGN and News International executives to make the representations they did, he was complicit in a cover up. 

34. However, a company director is required to exercise reasonable care, skill and diligence in the exercise of his functions. He may delegate, but has a duty to supervise appropriately. We consider James Murdoch’s conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged. In respect of the matters set out above, in our view, James Murdoch’s conduct in relation to events at NGN repeatedly fell short of the exercise of responsibility to be expected of him as CEO and chairman. 

35. James Murdoch has apologised for his conduct. He has acknowledged in a letter of 12 March 2012 to the CMSC that “wrongdoing should have been uncovered earlier. I could have asked more questions, requested more documents and taken a more challenging and sceptical view of what I was told, and I will do so in the future He has said that “I do think - and I share responsibility for this and I am sorry for it - the company took too long to come to grips with these issues. We agree. 

36. We consider that the events set out above raise questions regarding James Murdoch’s competence in the handling of these matters, and his attitude towards the possibility of wrongdoing in the companies for which he was responsible.

The final paragraph being particularly damning  on James ability to fulfill the role as Chairman.

After Discussing Rupert's lack of Involvement it comes back to say in effect that Because  James has stood down from his position as Chairman, he is just to be considered as an ordinary director, and as an ordinary director doesn't have enough influence to call the broadcast licence into question

45. Sky plc’s board has been subject to several recent changes. In addition to James Murdoch, it comprises 11 non-executive and two executive directors. James Murdoch is no longer the chairman; that role is now held by Nicholas Ferguson. The other non-executives are experienced individuals who would be expected to be capable of exercising effective independent oversight. Only three board members besides James Murdoch hold roles outside Sky plc which are linked to News Corporation. We have obtained an account from Sky plc of its governance structure, including the arrangements for board oversight of risk management and other controls within the business. 

46. In the circumstances, and notwithstanding our views in relation to James Murdoch’s conduct, we do not consider, having taken into account all the relevant factors, that on the evidence available to date Sky is no longer fit and proper to hold broadcast licences. Whilst we consider that James Murdoch’s conduct in various instances fell short of the standard to be expected of the chief executive officer and chairman, we do not find that James Murdoch’s retention as a non-executive director of Sky means that Sky is not fit and proper to hold broadcast licences. We recognise that whether it is appropriate for James Murdoch to be a director in light of the events is a matter for the Board and shareholders of Sky.

But the  decision concludes with the following paragraph

47. Our duty to be satisfied that a licensee is fit and proper is ongoing. Further evidence may become available in the future, which Ofcom would be obliged to consider in order to fulfil its duty. In particular, Ofcom considers that the findings of the Leveson Inquiry and the results of pending criminal proceedings (including evidence given in such proceedings) could be relevant to its performance of its duty under section 3(3).

Surely the re-installation of James in the position of Chairman is something  OFCOM is " obliged to consider in order to fulfil its duty." having criticised him so heavily in the report. as having raised questions to both his competence and attitude to wrongdoing, it is hard to see how the increase in influence gained in this promotion wouldn't cause OFCOM to at the very least ask some questions.

One thing that Might prevent OFCOM from having to make any decision yet might be the second part of Leveson. It could be seen as reasonable to delay till all the  evidence is in from that and that could give James an opportunity to develop a  reputation of competence and business ethics in post that they seem to think he was previously lacking.