Memorandum submitted by Local Broadcasting
Group Limited (LBG)
I know that Richard Price has spoken to you
already about what has happened at LBG, about our intense disappointment
at the funding shortfall, our expectation of further funding,
and our longer term belief that local television services will
and should become a regular part of the broadcasting landscape.
I know, too, you have told Richard you still wish to be supportive—for
which our thanks.
The action we have taken is due partly to the
present economic climate and technical problems with the strength
of the television signal in certain LBG licence areas. However,
it is also because of the uncertain regulatory environment in
which we operate. The fact that RSL licences are only for four
years (in contrast to ten years for ITV companies), and can be
withdrawn at any time for an alternative use, makes it difficult
to attract new investors. Investment is also hindered because
RSLs have no guarantee of digital capacity, and therefore no future
after analogue switch-over.
The ITC has been most complimentary about the
quality of our schedules and our attempts to create credibility
for this new sector. The ITC's approval to operate the revised
schedules for a maximum of six months is currently being sought.
During this period, the administrators will seek to find a solution
to the funding shortfall.
Richard and I continue to believe that free-to-air,
high quality, local television will become a valued part of the
television landscape and hope that a restructured LBG will play
an active part in developing this service. As a measure of the
potential of local broadcasting, Telewest has confirmed it will
screen the LBG local schedule in those areas where the LBG analogue
signal and its cable network match.
The comments we submitted to the consultation
on the Communications White Paper, and in our briefing, remain
valid. If the Government could, in the next few months, urgently
address our two key issues—extending the length of RSL licenses,
and assigning local television digital spectrum—this would
provide a catalyst for further investment. The ITC has said it
believes that the length of the licence is for Parliament to determine,
not the ITC.
We believe these questions have a wider significance
in terms of the Government's considerations about the shape of
the future broadcasting marketplace. With the decline of ITV's
regional broadcasting commitments and the moves towards further
ownership consolidation, local broadcasters could—given
a stable regulatory environment and a longer-term future—become
the main provider of television serving local communities.
It is still our intention, therefore, to submit
written evidence to your Select Committee inquiry, and we would
still very much welcome the opportunity to give oral evidence.
In the meantime, should you need further information, please do
not hesitate to contact me.
4 December 2001
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