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Wednesday, 1 May, 2002, 16:34 GMT 17:34 UK
And the digital licence goes to...?
ITV Digital stopped broadcasting on 1 May
ITV Digital stopped broadcasting on 1 May
The collapse of ITV Digital has led to the TV watchdog re-advertising the licences for the UK's digital terrestrial provider. BBC News Online looks at the possible runners and riders for the service.

Now that the long drawn out collapse of ITV Digital has finally come to an end, the next question is who will take over its licences.

Click here to see more information on the possible bidders

The now defunct service held three broadcast licences and the Independent Television Commission (ITC) has said they could be split up allowing more than one company or consortium to have a share of digital terrestrial broadcasting in the UK.

Possible bidders include
BBC
BSkyB
Channel 4
NTL/Telewest
Canal Plus
The problem is that the most likely candidates - the other big broadcasting companies - all face legal, financial or regulatory hurdles.

The ITC has set a timetable of six weeks from 1 May to find potential candidates for the licences.

During this period, the first two weeks will be for potential applicants to submit expressions of interest to the ITC.

Those who have done so by the deadline will have a further two weeks to submit full applications.

BBC Choice shows like Rent Free are still available
BBC Choice shows like Rent Free are still available
Finally the ITC will then assess the applications in the final two weeks of this period and expects to make an announcement on 12 June.

It would mean that only existing broadcasters or possibly a consortium who takes on ITV Digital's assets would be able to apply for the licences.

The ITC said the newly advertised licences will be more flexible than the previous licence.

Applicants will, for example, be able to apply for any combination of the three licences on offer or propose any mixture of free-to-air or pay TV services and interactive or data services.

Culture secretary Tessa Jowell said she was confident that the licences would be taken up.

She told BBC Radio 4's The World At One programme: "I certainly know of potential purchasers who have expressed interest and all that interest has to be translated into a specific bid.

Tessa Jowell confident of finding a buyer
Tessa Jowell confident of finding a buyer
"No doubt the potential buyer, the potential operator of the platform, will want to consider purchasing some of the assets from ITV Digital."

Those assets include the 800,000 ITV Digital set-top boxes.

Former culture secretary Chris Smith said he hoped a variety of broadcasters would take on the challenge.

He said: "I hope what we will see is a group of public service broadcasters together with two or three commercial operators coming together to offer a much more realistic package than ITV Digital did."

'Quality'

Media analyst James Bullock from ABN AMRO said that the current situation offers more questions than answers at the moment.

He said: "Any free-to-air TV offering will be caught in a classic Catch 22 situation.

"The level of consumer interest in the service would be dependent on the quality of the free-to-air line-up

"However, for the free to air channels to be profitable through advertising revenues alone, they would need large scale distribution, significantly wider than the current audience for digital terrestrial television."

So who are the possible bidders for the licence?

Back to top

BBC - Some industry experts said public broadcasters like the BBC may team up with other broadcasters to go after a new licence.

The corporation has already launched several digital-only channels - two for children, CBBC and CBeebies; the arts and discussion channel BBC4; BBC Choice for young adults; along with the existing BBC News 24 and BBC Parliament.

The problem is that BBC's charter does not allow it to run a pay-TV service.

However Gerald Kaufman, chairman of the Commons Culture Committee, believes he has a solution.

He said: "It would have to go into the BBC's commercial arm in order not to violate the restrictions of the charter, but that is one possibility."

BSkyB - BSkyB was originally a partner in the company that became ITV Digital.

The ITC, backed by European competition regulators, ordered it out of the consortium, saying it was already too powerful.

BSkyB is already the market leader in digital TV however several of its channels - Sky One and the sport and film services - were shown on ITV Digital until its switch off on 1 May.

Channel 4 - The company may be willing to supply FilmFour on any pay-TV service, as it had 29% of its audience on ITV Digital, according to research from the media buying agency Starcom Motive.

FilmFour claimed only 15% of its subscribers were on ITV Digital.

The recent losses posted by the company, of more than 20m, may persuade it to remain out of the race.

Canal Plus - The French company may be interested in the licence as it already provides the technology for the set-top boxes.

The main problem would be that the company does not provide much programming that would be of interest to a UK audience and would be forced to buy in the bulk of the content.

The company could, however, form a consortium with other broadcasters to ensure its technology continues to be used.

NTL/Telewest- The UK cable operators may be interested in taking up the licences, although the duo are saddled with heavy debts which may knock them out of the race.

Carlton/Granada- Some industry experts had linked the owners of ITV Digital of making a cut-price bid for their own service.

However a Carlton spokesman told BBC News Online that they were not interested.

The two firms have been keen to distance themselves from the failed digital venture in recent weeks and they may not want to get their fingers burned again.

See also:

23 Apr 02 | Business
ITV Digital in race to find buyer
23 Apr 02 | Business
What next for ITV Digital?
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