Select Committee on Welsh Affairs Second Report

16.  Memorandum submitted by the Independent Television Commission


  This memorandum is prepared by the Independent Television Commission (ITC). The ITC is responsible under the Broadcasting Acts for the licensing and regulation of all commercial television in the UK, with the exception of S4C. In addition, the ITC has no responsibility for those BBC services funded by the licence fee. The Members of the ITC are appointed by the Secretary of State for Culture, Media and Sport and include a National Member for Wales. There are at present 10 Members, under the Chairmanship of Sir Robin Biggam. The ITC has an office in Cardiff led by the ITC Head of Wales and the West.


  ITC licences all the regional ITV companies including HTV. This company uniquely holds a licence to provide services to two parts of its region, Wales and the West of England. The present licence runs for 10 years from 1 January 1993; the company successfully bid for that licence, promising an annual cash payment to the Treasury. At the time of the bids the company also put forward programming proposals which were incorporated in its ITC licence. Even though ultimate ownership of the company has changed, following its acquisition by United News and Media, these requirements remain at the level prevailing before the take-over. They include requirements to broadcast certain types of programme, in effect introducing an element of public service broadcasting to the commercial network. In particular, HTV Wales must provide a national service which reflects the diversity of life within Wales.

  Even though the licence has several more years to run, HTV have applied under the Broadcasting Act to apply for its renewal for 10 years from 1 January 1999. (10 other licensees have exercised the same right). A business plan has been supplied to the ITC on a confidential basis and is now being analysed. In the course of November, we expect to announce revised terms for the renewed licence, involving a new sum to be paid to the Treasury. HTV may reject these terms if they consider them unacceptable and reapply for licence renewal on one other occasion in the next two years. This process is entirely concerned with the financial terms on which the licence is granted. It is the ITC's responsibility to offer renewal terms, which are in the ITC's view, what the licence would fetch, were it to be put out to open tender. Calculations will take into account HTV's business plan but under the terms of the statue it is the ITC's view which must prevail, ie licence renewal is not a matter of negotiation.

  It is important to stress that this is renewal of the existing licence; before applying for licence renewal, HTV agreed several changes to their original licence and the financial terms put forward by the ITC will reflect these revisions.


  The fourth channel in Wales is allocated to S4C which broadcasts around 30 hours of Welsh language programmes per week in peak viewing hours, supplemented by programmes from Channel 4 provided free of charge. Channel 5's coverage is limited—frequencies on which the service could be carried were not found. NTL CableTel operates services in South Wales, and the ITC has recently awarded a local delivery franchise for North Wales and South Cheshire to Metro Communications Ltd.


  The digital age is now upon us, with the launch of digital services on three platforms, satellite, cable and terrestrial. These digital services will be able to carry far more channels than existing analogue services and dedicated channels for niche interests are likely to be a feature. It is, for example, already possible through analogue cable systems to receive the Parliamentary channel. The possibility of this sort of broadcasting is opened up even more by digital broadcasting. No one single digital platform has universal coverage. There will be areas of Wales which will not immediately be within the reach of digital terrestrial transmissions. Whilst we are delighted that a cable company is now investing substantially in cable operation in North Wales, it is unrealistic to believe that cable services will cover the entire country because of the economics of laying it in rural areas.


  The initial transmission plan for digital terrestrial television encompasses only 81 transmission sites throughout the UK (nine in Wales), compared with the 1,000 or so (more than 200 in Wales) currently employed for the analogue transmission of BBC1, BBC2, Channel 3 and S4C or Channel 4. The ITC is studying ways in which digital terrestrial coverage can be extended beyond this initial plan, so that it might eventually match as closely as possible the near-universal availability of analogue. One new technique we are investigating for this purpose is microwave transmission.

  The ITC has recently sent a paper to Government outlining that it should be possible to increase the coverage of digital terrestrial television to match the near-universal coverage of current analogue terrestrial services, if it is not possible to do so beforehand, once the analogue signal is switched off. The ITC has offered to work with the Government in devising such a plan, but this is a development for the long term as the ITC does not see much prospect of analogue switch off for 15 year or more. It is vital that viewers, wherever they are in the country, continue to receive their much valued free-to-air television services.


  The ITC regulates all commercial digital television services (ie, non-licence fee funded), with the exception of S4C's digital service which will be launched in November 1998. We are responsible for licensing the services and for ensuring that content meets our published Codes; we will continue to foster regional broadcasting. We submit an Annual Report each year to Parliament via the Secretary of State which sets out the performance of ITV licensees and those on other main terrestrial channels. We would also be happy to discuss with the Assembly or its Committee any points concerning the regulation of broadcasting about which it had an interest—in the same way as we appear before Select Committees of either House of Parliament.

  The Government of Wales Act makes no provision for any change in the ITC's role in Wales. We look forward to working with the new Welsh institutions to ensure a constructive and positive relationship.

26 October 1998

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