ITV says "jump", OFCOM ask "how high?"

Sure - which is pointless, because the BBC already exists as a public service broadcaster. My view is that you should simply auction off the spectrum without any condition attached, and then allocate the revenue gained to address any specific distributional objectives.

I have to admit, Mr Q, that in the grip of the biggest market failure for, oh, eight years, it must take balls of chrome to argue for an unregulated market...

or indeed, putting all your eggs in one basket

I realise there is little point in saying this, as it has been said around 67 times without you giving a proper answer, but...


I thought you were all for competition?

I actually think it's too much government intervention in the US which has caused the current financial crisis. But I appreciate that's not the conventional wisdom.


And I believe this will be the third time in this thread that I've explained this: competition is not an end in itself. One of the key reasons we like competitive markets is because it drives us towards efficient pricing and quantity outcomes. But the provision of public services does not require this. The point to make here is that there aren't always net benefits to competition. Consider power lines running down a street: consumers don't get a particularly better service if there are 2 or more firms supplying the power lines. They only need one set of power lines to deliver electricity to their house. In fact, if we did have multiple sets of competing power lines, consumers would actually face higher prices, because the basic infrastructure is very expensive. Such duplication is therefore undesirable.

In the context of TV, end users - the viewers - aren't directly paying for what they consume. They can just switch on a TV without having to pay a network (other than the BBC of course). To this end, efficient user pricing isn't a particularly valid consideration - the good is non-excludable, so you can't make viewers pay aside from through taxation. Given that there is a regime of taxation in place (the licence fee currently, but as I've argued, other existing mechanisms would work just as well) which is used to fund a dedicated public service broadcaster, I see no reason to impose costly public service obligations on commercial broadcasters. If your concern is with the quality of public services being provided, then this can be addressed through the development of standards and regulations which can be directed at the public service broadcaster.

Not for price, no, there is no need.

But for the actual quality of the television, then yes, there is a need.

And again, as I just said:

If your concern is with the quality of public services being provided, then this can be addressed through the development of standards and regulations which can be directed at the public service broadcaster.

To take the power line example again, a single provider of power lines might provide only poor quality lines with erratic connections to the grid. A competitor would encourage them to lift their game - consumers would simply switch to the rival firm to get a better quality of service. However, the costs of duplicating the infrastructure would be extremely costly. Alternatively, you could just develop service standards and impose penalities if the monopoly service provider doesn't meet their obligations. Now, in principle, I'm not a huge fan of regulation - but in the case of services being provided by the government, I actually think establishing clear guidelines for what is expected to be achieved is probably a good thing.

ITV faces Ofcom fines of £80m a year if it surrenders PSB licences (MediaGuardian)

Unusually tough line from Ofcom, for once. I'm sure they'll be claiming that they don't really mean it in no time though...

It's all very well Ofcom saying they will do this, and even collecting £160m over the next 2 years until the franchises effectively expire. But it serves no purpose anyway: the money goes to the Treasury to buy Bank shares, not into broadcasting. The viewer loses and ITV plc wins their case in that their PSB 'benefit' remains untouched.

It's like buying a car from a dealer on credit, then handing back the V5 registration document after a couple of years, cancelling most of the loan payments, but still expecting to be able to run the car into the ground before scrapping it. I don't think anyone would see that as reasonable!

The biggest penalty Ofcom have is to remove ITV plc's gifted portion on DTT and their guaranteed EPG position on all digital platforms henceforth. Those are worth far more; in a stand-off I fear that Ofcom will blink before Grade does though!

It's time Ofcom grew a synthetic backbone, at least for 2 years, and did their job as regulators and enforcers.

I appreciate that if all the English & Welsh franchises disappeared off Channel 3 it would look bad initially. But government regulators have been here before (ITVSWW) and provided an interim service. I'm sure somebody would step in - probably BSkyB, Virgin Media or RTL/FIVE. ITV plc would be begging to sell their programmes to whoever got the interim service. Virgin have always wanted 'Living' to be the pseudo 'Channel 6' and could easily provide a national temporary service. There was a similar (less clumsy) arrangement for TSW taking over from Westward in 1982. They took over the company and provided financing and facilities after Westward decided to 'throw in the towel' early.

There is no shortage of other providers these days, it's not like the 1960s/80s. I imagine somebody would quickly buy up the redundant basic ITV News regional facilities so that they could meet the minimum contractual requirements (or replace them with portakabin studios).

I've agreed in part to what ITV plc have wanted so far, on a commercial basis - but now they are just seeing how far they can push the regulator and it's time that a line was drawn. Ofcom should really be saying "we are removing your licences because you have breached your contracts, you will now suffer the consequences". But they won't.

[/rant]

Lovely to see them all sounding off publicly against one another, but this is after all show business.

If ITV really were to decant en mass to MuxA (SDN) then this would happen by negotiation, ITV would give something suitably impressive looking back to OfCom and wouldn't be fined at all, but lauded for public spiritedness. Channels 4 and five would have a bean feast on Mux2, C3 analogue would just drift off into outer space whilst ITV couched up for a few more transmitters to equalise MuxA (at least where it wanted to).

where would this lead STV/ UTV there still get the show. does this mean

Emmerdale/ corrie/ x factor could all be show on ch3 in Scotland and Ni but on other channels in england but not scotland?

It would neatly solve the problem of trying to squeeze all the current PSB services into just two muxes post the conversion of Mux B into DVB-T2/MPEG4/HD.