ITC makes waves as it steers for safety with Channel 5 decision

The man who rushed out of the Independent Television Commission’s press conference alongside me described it, on the phone to his newsdesk, as a “shock” announcement. “Surprise”, I felt, would be a more appropriate word for the BBC to use.

But, in truth, we should have been neither shocked nor surprised that the Independent Television Commission awarded the

Channel 5 licence to someone other than the highest bidder – after doing no more than what the law requires, and exercising its judgment about the applicants’ programme and business plans. After all, it had done exactly the same thing in the case of four of the ITV licences back in 1991.

If there was a surprise it was that UKTV failed because the ITC had doubts about its programmes, rather than about its finances or its ownership.

The group had, after all, bid more than 14m a year more than both Virgin and Channel 5 Broadcasting.

And, despite its name (and in defiance of the rule that says Channel 5 must be controlled by a European Union company), only one of UKTV’s main shareholders was British, while the other three were Canadian, Scandinavian and Australian.

UKTV proposed to get round this by vesting ownership in a trust based in Jersey. That such a firm rule can be circumvented so easily raises interesting questions about just how effective any future legislation on media ownership might be.

However, the ITC’s problems were not with UKTV’s ability to stay solvent for ten years, nor with who owned it, but with the quality and the “range and diversity” of its programme plans. It had similar qualms about Virgin. Both failed consortia reacted badly to the Commission’s decision and there are now mutterings about legal action.

But the Commission has survived one judicial review of its decisions, instigated by TSW when it lost its licence to Westcountry Television in 1991, and will almost certainly survive another.

Virgin says it strongly disagrees with the Commission’s “subjective judgments” – but the courts decided in the TSW case that the ITC was perfectly entitled (indeed expected) to make such judgments, provided they were not unreasonable.

The Commission, in consultation with its lawyers, will have gone to great lengths to ensure it appears reasonable.

Having said that there remains a suspicion that the selection process was driven not simply by dispassionate analysis.

The ITC will not admit to playing safe – largely because that isn’t one of the criteria for selecting licencees laid down in the Broadcasting Act. But that’s what it seems to have done, whether intentionally or not.

Channel 5 Broadcasting is very much part of the existing system. Its backers include MAI, which controls two ITV licencees, Anglia and Meridian, and Pearson, which controls a former ITV company, Thames. Its news service will be provided by ITN. And, although he will be neither the chairman nor the chief executive of the new channel, the driving force up until now has been Greg Dyke, once LWT’s chief executive.

These are all familiar names to the ITC. No doubt the commissioners decided that if anyone can deliver what they promise – namely a commercially-successful channel with a ten per cent share of viewing (roughly equivalent to Channel 4 or BBC2), based on a wide range of programmes of high quality, and all on a programme budget of just 110m a year, half that of Channel 4 and less than a fifth that of ITV – it is C5B.

A thwarted Virgin last week accused the Commission of opting for a fifth channel very similar to the existing four. If that is what it has done, the ITC can perhaps be forgiven.

It’s easy to forget, when four heavy weight consortia queue up for the licence-brandishing multimillion-pound bids, that Channel 5’s commercial success is by no means assured.

With cable and satellite television already in more than 4 million homes and making steady, if unspectacular progress, and the prospect of digital television just around the corner, Channel 5 faces a lot of competition.

Dyke points out that 80 per cent of us still make do with only four television channels, and would no doubt welcome an extension of choice that doesn’t require us to pay a subscription, buy a dish or decoder or pay for a cable connection.

He also says that Channel 5 will schedule competitively against the existing channels, seeking out their weak points, so that a few of its programmes will be able to attract mass audiences.

But there aren’t many weak points left in the ITV schedule. After scaring itself and its advertisers rigid when its ratings slumped during the spring and summer of this year, it is promising to schedule even more aggressively than ever and bolster its programme budget still further.

The ITC knows this, and could be forgiven if it decided to take as few risks as possible with the new channel. It’s just a pity it couldn’t admit as much.