Statement on short term regulatory decisions

Published 21|01|09

Executive summary

1.1 Phase one of Ofcoms public service broadcasting review identified that the level of obligations on commercial public service broadcasters was unsustainable. In Phase two of the review, we consulted on a number of proposed changes to the regulatory obligations on Channels 3, 4, Five and Teletext. These proposals were designed to deliver a viable and sustainable level of public service content in the transition period from now until the current public service broadcasting model is altered. The specific changes were put forward in light of the declining value of public service status for commercial broadcasters, and the opportunity cost of their regulatory obligations.

1.2 We recognised a need to balance the value of licence benefits with the cost of public service broadcasting obligations. Without this balance, there is no incentive for commercial public service broadcasters to retain their public service licences. This is particularly the case for ITV plc. The licences it holds retain significant public service obligations, including the regional obligations rooted in Channel 3s original federal structure. If the obligations of ITV plcs licences significantly outweighed their benefits, ITV plc could feasibly surrender its public service licences and pursue an entirely commercial strategy using broadcasting spectrum through an alternative multiplex (such as SDN, which it owns). In such a scenario, much of ITV plcs public service content would be likely to be lost completely, including regional programmes.

1.3 In formulating proposals based on this underlying analysis, we listened to what ITV network audiences told us they valued most namely regional news gathering and programmes transmitted at times when most people were watching. Accordingly, we concentrated the declining available benefits of public service status on maintaining journalistic resources in the field, maximising the level of localness in programmes and maintaining the volume of public service programmes broadcast in peak-time, when most people watch.

1.4 In reaching the decisions (summarised below), we have carefully considered and taken into account all the consultation responses which are summarised in the annex to this statement and published in full (where non-confidential) on Ofcoms website at http://www.ofcom.org.uk/consult/condocs/psb2_phase2/statement. We have reviewed each of our original proposals in light of them and considered whether there were viable alternatives, particularly bearing in mind the declining value of the public service broadcasting licences as outlined above.

1.5 These decisions do not represent a permanent solution to the mounting pressures on commercial public service broadcasters ability to contribute to the overall public service broadcasting system. Ofcoms advice to government and Parliament about how these longer term issues should be tackled is set out in the final statement of Ofcoms second public service broadcasting review Putting Viewers First which has been published alongside this document .

1.6 We plan to implement changes to the volume of Channel 3 programmes in the devolved nations and English regions as originally put forward, except in relation to the quota for programming other than news in Northern Ireland. Here, the original proposal for a minimum of one and a half hours per week has been revised upwards to a minimum of two hours per week. This change is in response to strong stakeholder reaction against the original proposals; and because of the specific conditions pertaining to Northern Ireland which differ from the other nations including later digital switch-over.

1.7 The quota for programming other than news in Wales and Scotland will be revised to one and a half hours per week, as per the proposals. Within the quotas in all the devolved nations, as now, 45 minutes must be in peak and 30 minutes in near peak, reflecting the continuing need to maintain public service output at the most suitable times for audiences. The requirements for current affairs are also retained. The changes will be implemented with effect across the calendar year 2009 and thereafter.

1.8 The requirement for news programmes on stv, UTV and ITV Wales will reduce to 4 hours per week.

1.9 As with programming other than news, our proposals in relation to the broader pattern of regional ITV news bulletins were aimed at maximising those elements which audiences told us they valued most i.e. local news gathering and programmes transmitted at times when most people were watching. Thus we are retaining content in the main peak-time regional programme, and a full bulletin after News at Ten, separately for every existing region and almost every existing sub-region. The proposals we published in phase two represented a substantial improvement to ITV plcs original plans in relation to regional news, and were put forward only after pre-consultation with the company, The circumstances of each nation, region and sub-region were considered carefully in formulating our proposals, as set out in Section 7 and Annex 1 of the Phase two document .

1.10 The consultation specifically invited respondents to let us know of any alternative means to achieve our desired objectives. 33 consultation responses were received from a range of public bodies and individuals, in relation to regional news. Almost all were opposed to the changes, although some were reluctantly accepting of the reasons for change. We have considered the responses carefully, and particularly appreciate the strong attachment felt by audiences both to news for regions (such as Border and Westcountry, for example), and to programming other than news in the devolved nations.

1.11 Generally, however, the comments from stakeholders expressed regret about any diminution of the current output, without putting forward alternatives that would be viable in the economic circumstances. One respondent suggested the regional news could be sponsored. This is not possible under current legislation. Our underlying economic analysis - that the costs involved in holding a public service broadcasting licence will soon outweigh the benefits - was not challenged by respondents.

1.12 The pattern of delivery of Channel 3 regional news in England and Southern Scotland, with effect from within the first quarter of 2009, will therefore be:

• Border and Tyne Tees areas will be served by a single regional main weekday news bulletin, containing variations of 15 minutes for each of the Border and Tyne Tees areas, and by a separate 9 minute bulletin after News at Ten
• West and Westcountry areas will be served by a single regional main weekday news bulletin, containing variations of 15 minutes for each of the West and Westcountry areas, and by a separate 9 minute bulletin after News at Ten
• Thames Valley and Meridian areas will be served by a single regional main weekday news bulletin, containing variations of 15 minutes for each of two separate sub-regions comprising the former Thames Valley and Meridian South areas and the Meridian South East area, and by a separate 9 minute bulletin after News at Ten
• Anglia region will be served by a single regional main weekday news bulletin, containing variations of 6 minutes for each of the Anglia East and West areas and a separate 9 minute bulletin for each sub-region after News at Ten
• Central region will be served by a single regional main weekday news bulletin, containing variations of 6 minutes for each of the Central East and West areas and a separate 9 minute bulletin for each sub-region after News at Ten
• Yorkshire region will be served by a single regional main weekday news bulletin, containing variations of 6 minutes for each of the Yorkshire East and West areas and a separate 9 minute bulletin for each sub-region after News at Ten
• There will be no change to the regional pattern in the Granada or London regions or in ITV Wales.

1.13 Proposed changes to the volume of Channel 3 regional news slots, to the volume of regional content other than news in England, and to the combined level of news and content other than news in the Channel Islands received little comment from stakeholders, adverse or otherwise. The volume of news in the English regions and Border will reduce to 3 hours 45 minutes per week. Content other than news in England and Southern Scotland will fall to 15 minutes per week, which can be provided within the news slots, bringing the combined total to 4 hours per week. In the Channel Islands the minimum volume of news and content other than news will be 4 hours per week. Ofcom intends to effect these changes within the first quarter of 2009.

1.14 We will set the ITV network current affairs quota at 50 minutes on average per week with effect from 2010. However, 40 minutes of this must be delivered in peak-time, as now.

1.15 The ITV network quotas for expenditure on and volume of production from outside London will be set at 35% from the calendar year 2009 on.

1.16 The quota for out-of London production on Channel 4 will be set at 35% from 2010, within which a quota of 3% will be set for production from Scotland, Wales and Northern Ireland combined. We plan to review - and consider increasing - these quotas once the future of Channel 4 is clearer, in response to the issues set out in our statement on the longer-term options.

1.17 We will set the originations quota for Channel Five at 50%, with a 40% figure in peak-time, with effect across the calendar year 2009 and thereafter.

1.18 We will allow Teletext to reduce the number of regional news regions from 19 to 13; reduce the minimum regional page count for content other than news on the analogue service by 40% to 24 pages (the same as the digital service); and to reduce national news page count by a third, from 30 to 20 pages, with effect within the first quarter of 2009.