26.01.2004 – 11:03

Ofcom Media Office

Ofcom announces new ITV licence review process

Ofcom today announced a consultation on its new approach to the
review of licence terms for Channel 3 (ITV) broadcasters.

Ofcom plans to introduce a unified and streamlined process in
order to reduce the regulatory burden of licensing regulation. The
proposals recognise the important challenges facing the television
industry in the years ahead, including the need to plan for digital
switchover, the need to maintain public service broadcasting
obligations and, importantly, the need for the timetable for the
Channel 3 licence reviews to allow Ofcom to take full account of its
PSB Review.

The regulator is proposing to align the licence review periods for
all 16 Channel 3 licences so that all reviews can begin from 31
December 2004. This would enable licensees to operate according to a
consistent licensing timetable going forward.

Under previous plans, reviews for 8 licensees could begin from 31
December 2004, but the remaining 8 would be delayed until early 2007.

The Communications Act 2003 allows Channel 3 licensees to ask for
reviews of the financial terms of their licences from 31 December
2004. Ofcom's consultation document sets out proposals to simplify
the process for these reviews, to improve clarity and transparency
and to reduce the regulatory burden upon broadcasters.

Ofcom is proposing:

• to price all Channel 3 licences simultaneously by seeking to align the review periods of different licences;
• to complete the reviews by the end of June 2005 for any Channel 3 broadcasters applying on 31 December 2004;
• that licensees should be entitled to apply for a review only once during a review period; and,
• to reduce broadcasters' information requirements for the reviews, wherever possible, to bring greater simplicity and transparency. The full consultation document is available on Ofcom's website at www.ofcom.org.uk. Responses are invited by 1 March 2004.

Ofcom intends to publish a statement on the results of the
consultation, including a decision on the final timetable for the
reviews, by early April 2004. Views submitted on the general approach
to the reviews will be incorporated into a second consultation,
planned for June 2004, on a more fully-defined proposition for the
valuation methodology.

Background information

Ofcom is required to set financial terms for broadcasters'
payments for Channel 3 licences based on what it believes each
broadcaster would bid in order to win its licence in a competitive
tender. Payments take the form of a percentage of the broadcaster's
qualifying revenue (PQR) plus an annual fixed cash sum.

Section 225 of the Communications Act 2003 permits each holder of
a Channel 3 digital replacement licence to apply for a review of its
financial terms for payments to the Treasury, within a window of time
starting four years prior to the expiry date of its old analogue
licence. Ofcom is required, under Section 215 of the Communications
Act 2003, to offer to replace the existing Channel 3 analogue
broadcasting licences with new digital licences in 2004.

There are 16 Channel 3 analogue licences. These currently have
three different expiry dates; 31 December 2008, 31 December 2010 and
31 March 2011, which means that they have three different review
periods. The earliest review period, for licences with an expiry date
of 31 December 2008, begins on 31 December 2004. The review period
for later licences would begin on 31 December 2006 and 31 March 2007
respectively.

Ofcom is allowed, with the consent of relevant licensees, to vary
the licence periods under Section 3(4)(a) of the Broadcasting Act
1990. The shortening of the analogue licence periods will have no
effect on the duration of the digital replacement licences.

Ofcom is proposing the following review timetable for licensees
with an analogue licence expiry date of 31 December 2008:

Date                         Action

31 December 2004             Earliest date on which          
                                 relevant Channel 3 broadcasters

could submit applications

By end June 2005             Ofcom determines new            
                                 financial terms for

broadcasters who submit

applications on 31 December 2004

1 January 2005               New fixed annual cash sum       
                                 backdated to take effect on

this date for broadcasters who

submit applications on 
                                 31 December 2004

Start of licensee's next     New PQR rate to take   
    effect accounting period

Ends.

NOTES FOR EDITORS AND CSEs

Ofcom is the independent regulator for the UK communications
industries, with responsibilities across television, radio,
telecommunications and wireless communications services.

Our duties include:

• The promotion of choice, quality and value in electronic communications services, where appropriate by encouraging competition between the providers of those services
• Ensuring the most efficient use of the radiocommunications spectrum - the airwaves used for the transmission of all non-military wireless communications services
• Ensuring a wide range of electronic communications services, including broadband, is available across the UK
• Ensuring a wide range of TV and radio programmes of high quality and wide appeal
• Maintaining plurality in the media by ensuring a sufficiently broad range of ownership
• The protection of audiences against offensive or harmful material, unfairness or the infringement of privacy on TV and radio

For further details please visit www.ofcom.org.uk.

This information is provided by RNS

The company news service from the London Stock Exchange

ots Original Text Service: Ofcom
Internet: www.newsaktuell.ch/f

Contact:

Ofcom Media Office
E-Mail: mediaoffice@ofcom.org.uk
Phone +44/20 7981 3033
Internet: http://www.ofcom.org.uk