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Ofcom minded to stop local TV expansion

As uncertainty over the future of local TV services continues, Ofcom has said it is minded not to advertise any more local TV licences.

The news follows multiple requests from local TV services in recent months to have their local programme commitments reduced or simplified, with further stations having been taken over or merged with other broadcasters.

So far, Ofcom has either not advertised, or not re-advertise for local TV licences in 13 locations around the UK, as a result of no interest or failed applications. Locations affected include Gloucester, Inverness, Luton and Plymouth.

The licensing process was delayed further by plans to clear part of the frequency spectrum used by Freeview for future 5G services, which cast into doubt whether suitable frequencies would be available to reach enough people in each location.

Ofcom now says the majority of locations that are yet to be licensed for local TV are economically unviable, mainly because of the low reach the channels would have.

With funding to extend the local TV multiplex (the platform upon with the local TV channel would broadcast on Freeview) no longer available from the BBC, and with the local TV sector now having to look for alternative funding now the initial three-year start-up funding from the licence fee is expiring, Ofcom added that any local TV expansion would have "a significant negative financial impact on Comux", the operator of the local TV multiplex.

It warned that "the financial impact of launching additional services would not be limited to Comux. It could also be expected to impact the rest of the local TV sector more generally".

At the present time, the amount local TV licensees pay to Comux for transmission and network services may be reduced by the distribution of profits which Comux generates. But Ofcom says that the cost of expanding the network would "reduce the likelihood that this could continue and, as a result, the effective cost of transmission to existing individual local TV licensees would rise", putting the financial sustainability of local TV services under threat.

In the last month, local TV licence holders for Norwich and Swansea have successfully requested that their local programme commitments are reduced and simplified, with numerous local TV services across the country reduced to providing the minimum amount of local news required by Ofcom, plus a sustaining service of  low-cost syndicated or simulcast content. In Scotland, local TV operator STV - which runs a service in five locations north of the border - is undertaking a strategic review, which prompted newspaper reports that the future of the local service - STV2 - was under threat, as it struggles with profitability.

Ofcom is now consulting with affected parties until 1st June 2018, after which it will make a final decision on what to do next.