Channel 3 and Channel 5 licence renewals: renew, extend ... or auction?

On 31 December 2014, the licences that ITV plc, STV, UTV and Channel 5 require to run their channels on buttons 3 and 5, with access to half of the second Freeview multiplex, require renewing.

^{Published on 23rd May 2012 at 08:47 by Brian Butterworth on UK Free TV}
Today, Ofcom has published the legal "advise the Secretary of State" looking at the options for TV channels 3 and 5.

Since the formation of the ITV network in the 1950s, the licences to operate the services have been put up for auction with changes to the services happening in the 1960s, 1974, 1982 and 1993.

However, due to the digital switchover (and successful lobbying from ITV plc) the licences helf by ITV, STV, UTV and Channel 5 have been renewed "automatically".

Ofcom’s report today considers whether the existing licence holders will be able to contribute, at a commercially sustainable cost, to public service broadcasting in the 10 years from 2015.

Ofcom says it will be looking at:

Delivering benefits to viewers

The licensees provide public service programming, such as news and current affairs, which is valued by viewers. In return, they receive benefits, such as the right to appropriate prominence on TV listing guides and access to spectrum to broadcast on digital-terrestrial television (Freeview).

In the report to the Secretary of State, Ofcom has outlined three credible options for the licences and considers that each could deliver benefits for TV viewers. These are

1. Renew existing licences

The licensees have told Ofcom that, in broad terms, their existing public service obligations could be sustainable in the next licence period*. Ofcom’s analysis shows the Channel 3 and 5 licensees could continue to make a sufficient contribution to public service broadcasting beyond 2015.

This includes the possibility of establishing a separate, stand-alone licence for Channel 3 in Wales. We also suggest that changes to the Channel 3 service received by viewers in the south of Scotland may be appropriate to ensure the provision of Scottish news in that area.

2. Auction new licences

Re-auctioning would open up licensing to a competitive process. It may also test whether potential bidders – including the current licensees – could consider fresh approaches to public service broadcasting.

3. Extend the current licences

Extending the current licences for a shorter period could allow for a full review of public service broadcasting as part of a future Communications Bill. It could also give Parliament a chance to consider how public service content could be delivered in a world changed by the growth of digital media.

Ofcom believes that the three options are credible. The decision now rests with the Secretary of State.

Your comments are always welcome. Please use the form below to add your thoughts or questions to this page. We will get back to you as soon as we can.