Execu3ve Summary
Recommendation – Allow ITV1 and Five to opt out of the PSB system after 2012 ITV1 and Five should be allowed to opt out of the PSB system in 2012 – two years prior to the end of their licences but after digital switchover. If they did opt out they would no longer have to keep any of their specific PSB commitments, they would keep their high reach digital terrestrial access but they would have to pay for the digital terrestrial frequency they had previously been gifted. Prices for this capacity would be set by regulators with regard to its opportunity cost. The proceeds would be reallocated by a new Public Service Content Trust (PSC Trust). Both ITV1 and Five would retain their right to remain on top slots in all electronic programme guides. However, if ITV1 and Five did opt out of the PSB system they would lose some currently gifted digital terrestrial capacity which would be handed back to the PSC Trust to be reallocated to the remaining commercial public service broadcasters. Recommendation – Relax ownership and competition constraints in return for programme investment commitments A new competition regime should be applied to TV in the UK which allows individual owners to control large shares of the advertising market. This would allow the merger of Five and Channel 4, or ITV and Five for instance but subject to new programme investment conditions. Such conditions already exist in France. These programme investment conditions would be set as a share of revenue and be based on the previous level of investment by the main commercial broadcasters over the last 5 years. In particular, the CRR mechanism should be removed from ITV1 in return for a programme investment commitment from ITV. This should be achieved by changing the remit of the competition authorities over broadcasting and requiring them to weigh consumer (viewer) and public value issues when determining advertiser funded broadcasting mergers and acquisitions rather than only the interests of advertisers. Recommendation – Channel 4 should retain its PSB status, be allocated more access privileges and be privatised Channel 4 should be privatised in 2012 but retain a PSB licence for at least 10 years. The majority of any proceeds of this privatisation would remain with Channel 4 to strengthen its balance sheet. It should receive extra digital capacity, reallocated from ITV and perhaps some from the BBC. It could choose to use or sublease this but retain the income from it. Channel 4 should also be granted cross promotional and linked access to BBC new media services such as www.bbc.co.uk, the iPlayer and Project Canvas. Channel 4 would be allowed to merge with Five under a more relaxed ownership and competition regime, but should it do so, the combined entity must be required to make a minimum level of investment in new programming in order to prevent consolidation leading to less UK programming investment. Channel 4’s PSB licence and allocation of frequencies would be administered by the PSC Trust which through its Public Access Division would control all the currently gifted digital terrestrial spectrum. As a PSB broadcaster, Channel 4 programming would also have a “most favoured nation” status for BBC CoFunding and PSC Trust public funding. Such funds would still have to be bid for on a contestable basis, but Channel 4’s high reach, PSB licence and access privileges would make it a favoured outlet.
policyexchange.org.uk
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