There has been an update to this story today,
It seem that the BBC's intention is to allow S16mm for acquisition and then only transmit it in Standard Definition, and not HD.
In the article there are specific examples of material that has been shot on S16mm since the ban that has been aired year after year but only in SD. It's a shame that a format that when shot well can produce such amazing images is treated in this way, while the technical reasons for digital artifacts can be understood.
The artical can be found here, TVBEurope Super16mm: An SD delivery for HD http://ow.ly/qKLvv