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Thursday, 18 October, 2001, 14:11 GMT 15:11 UK
Watchdog calls for ITV shake-up
Jennifer James as Geena in Coronation Street
ITV giant Granada makes Coronation Street
The Independent Television Commission (ITC) is calling on the government to create legislation which could pave the way for a merger between broadcasters Carlton and Granada.

It wants new legislation to be introduced to combat a downturn in advertising revenue.

In his speech to an ITC dinner in Edinburgh on Wednesday, chairman Sir Robin Biggam said action was needed sooner rather than later.

His address is being seen by broadcast media as an indication that the ITC wants Carlton and Granada - ITV's two largest shareholders - to be able to form one company.

He said the proposed moves to relax the rules on media ownership and the setting up of the super-regulator Ofcom, scheduled to take effect in 2003, was not soon enough.

One company

He said interim legislation was needed to enable commercial TV to compete with the BBC in what he called "tough times".

"As a regulator, our hands are tied," Sir Robin said.

"We are governed by the current legislation, which, in key areas such as media ownership, is hopelessly outdated at a time when flexibility is required to meet the changes in the market and the technology."

The ITC is an independent body

The website of the industry magazine Broadcast,, reports that Carlton and Granada are facing a cash crisis due to a drop in advertising revenue and that closer collaboration could mean significant cost savings.

Carlton and Granada own most of the companies which run the 15 regional licenses of ITV.

Sir Robin said the BBC was still well served as the primary public sector provider.

'Steep decline'

"But the commercial sector - which also has public service obligations - is not in a position to compete," he added.

The economic climate had changed as it affected commercial TV companies, he said.

Advertising revenues had collapsed and forecasts for the take-up of broadband and interactive technology were in "steep decline", he added.

Sir Robin said the economic downturn was also putting ITV's regional services under pressure.

But he said if "flexibility" was given, a better service could be provided for the nations and regions in the UK.

"The key components of a new settlement with ITV will be their continuing investment in the delivery of services in the nations and regions, back-up by local governance and accountability and the support for a vibrant production sector out of London."

The Independent Television Commission acts as a watchdog for commercial TV in the UK by regulating and licensing it.

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