Ofcom sets out options for the future of Channel 3 and Channel 5

  updated 22:00 with video

Twenty years since the last major change in the way the Channel 3 / ITV Network was introduced, the current media regulator Ofcom has today been outlining its proposals for the future of the two commercial networks on Channel 3 and Channel 5.

The licenses to transmit services on Channel 3 and Channel 5 across the UK could be put up for auction, in a move echoing the controversial ITV franchise round of 1991.

In a report to the Secretary of State, Ofcom states that the Channel 3 and 5 licensees could continue to make a sufficient contribution to the fulfilment of public service purpose. 

Despite the current holders of Channel 3 and 5 licences stating the benefits they receive in return for PSB status have declined significantly as digital switchover has progressed and choice for viewers has grown, Ofcom notes some continued benefits to the licence holders remain, namely a prominent position in the channel listings and access to a slot on digital multiplex D3&4 (PSB2) allowing them to broadcast terrestrially to 98.5% of the population.

The current Channel 3 and Channel 5 broadcast licences are due to expire on 31 December 2014. Ofcom has proposed to auction the licences for Channel 3 and 5. In its report, Ofcom explains its reasoning behind this option. Of the channel 3 / ITV licences it stated: "Re-auctioning could test whether potential bidders - including the current licensees - would be able to bring forward alternative models of PSB delivery. An auction would also offer an opportunity to restructure the licensing map to reflect more accurately national and regional identities within the UK. 

In the case of Channel 5, it would clarify whether a new bidder could offer a more significant commitment to original content production or important areas of public service content than the current licence holder."

Any change to the Channel 5 licence would come as a blow to current owner Richard Desmond's Northern & Shell business, who bought the channel in 2010 from RTL.

The Secretary of State for Culture, Media and Sport, currently Jeremy Hunt MP, will ultimately decide on whether to exercise his powers and intervene in the process. 

Amendments to the existing Channel 3 licences would be made subject to a consultation, if Jeremy Hunt did not intervene. Recent calls by Welsh Politicians for a separate Wales Channel 3 licence have fallen on fertile ground, as this is one of the proposals. Currently, Wales is grouped with the West region around Bristol, where until 2002, viewers received Channel 3/ITV network programmes via HTV, which operated as a dual region either side of the Severn Estuary.

Elsewhere, viewers in the South of Scotland - currently in the Border region - could have their Channel 3 provider changed, so that if STV won a possible auction, it could take over the Border Scotland region.

Controversially, ITV has proposed to shorten its regional news programmes in the regions it controls as part of its plans for 2015 and beyond, however the reduced timings for regional news would be balanced by re-introducing dedicated bulletins for regions such as Westcountry and Central East, who currently share news with West and Central West respectively.

The current licence regime was brought about following the 1991 franchise awards, when there were still 4 analogue terrestrial TV channels and Sky was still in its infancy. Each "franchise holder" had the right to transmit in a certain area, at certain times of the day from the then IBA, later NTL-owned transmitter network. The events in 1991 resulted in Thames, TVS, TSW, TV-am, Oracle losing their right to transmit terrestrially, and Carlton, Meridian, Westcountry, GMTV and Teletext Ltd began transmitting in their place from January 1993. 

At this time, Channel 4 became an independent station under the Channel 4 Corporation, and links between it and the pre-1993 ITV stations were severed. In June 1993, the last ITV Schools programmes were aired on Channel 4.

During the 1990s, the rules on ownership relaxed, and Channel 3 licence holders, as they were now known, could buy out or takeover another Channel 3 provider in another region. By 2001, all licences in England, Wales and the Scottish Borders were owned by just two companies: Granada and Carlton.

In 2005/2006, a number of changes were made to regional news regions across England and Wales, although the existing Channel 3 licence regions and the legal framework behind the service remained intact. The changes followed the merger of Carlton and Granada to form ITV Plc, which became the owner of the Channel 3 licenses across all of England, Wales, Scottish Borders - and last year, the Channel Islands. STV own two Channel 3 licences for Central and Northern Scotland, whilst UTV retains Northern Ireland. Further reductions followed in 2009.

Earlier this year, STV, UTV and ITV Plc announced that they had reached agreement on the future of the "ITV Network", whereby STV and UTV proposed to become affiliates of ITV in Scotland and Northern Ireland. 

At that time the Channel 3 regional licence holders realised that as a consequence of ITV Plc now controlling all of the Channel 3 licences in England, Wales, Borders and Channel Islands, plus the ITV Breakfast licence, the existing ITV Network Centre model and funding arrangements set up in 1993 were no longer workable in a modern media enviroment of digital spin off channels, on demand TV and HD simulcasts. It had subsequently resulted in legal challenges from all parties, and issues with the current set up is thought to be the reason behind UTV and STV HD versions not being included on Sky and Freesat EPGs. The proposed framework was submitted to Ofcom for consideration.

An auction of the Channel 3 licences would throw this agreement up in the air, as the owners of the licences in each region could change by early 2015, when the new licences come into force.

VIDEO: The 1991 ITV franchise announcement

...How many predictions in this news report from ITN News at 540 in 1991 came true?

ITV Regions in 1993:

Carlton (London weekday 0925-0600, Friday 0925-1715)
Central (later Carlton Central)
GMTV (Whole network 0600-0925), subsequently renamed ITV Breakfast
HTV (West and Wales)
LWT (London Fri 1715-Mon 0559, except 0600-0925 Sat & Sun)
Meridian (replaced TVS)
Scottish Television
Tyne Tees
Westcountry (replaced TSW, later Carlton Westcountry)

...Plus Teletext Ltd (replacing Oracle) operating the PSB text service on ITV, C4 and S4C

ITV / Channel 3 regions in 2012:

ITV plc owns licences for Anglia, Border, Central, Channel, Granada, ITV Breakfast, London Weekday, London Weekend, Meridian, Tyne Tees, Wales & West, Westcountry

STV operates its own Central Scotland licence, and owns Grampian TV. (0925-0600)

UTV retains its licence for Northern Ireland (0925-0600)

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