Well that's what they get for living in an area with no population...
Nah, seriously. Dealing with Border first, I know that ITV PLC own the area. However the regulator should stipulate that, if they wish to merge the Border and Tyne Tees area, that the Border Scotland area should be handed to SMG as this new programme will be utterly irrelevant to this audience.
SMG should then be told they can have the area if they provide certain requirements - the sub-opt being the obvious minimum requirement. It would still be less than ideal and result in Borderland seeing a lot of central Scotland news, but it would be better than the alternative.
STV would be very unlikely to say no as I suspect it has been STV's dream to make 'altogether Scotland' a reality, along with the additional advertising revenue. ITV would probably be happy if it was part of a bigger settlement allowing them to merge a few regions as it would make up for it in the savings.
What I think ITV has to watch is that, with the dawn of increasing localness - with newspapers and other publications becoming more and more local - and newspapers producing their own video bulletins, that local viewers and advertisers don't just abandon them for the atlernatives. But I understand things have never been more competitive, and the financial problems of producing a regional programme watched by thousands. Very difficult time for them.
ITV need to decide whether localness is part of their USP and heritage, and connection with the audience, and whether it's worth paying out that extra money; or whether they want to be a higher budget Sky One.