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| Ofcom rejects licence fee plan | Ofcom rejects licence fee plan |
| (21 minutes later) | |
| Media watchdog Ofcom has rejected plans for the BBC to give existing licence fee money to other broadcasters. | Media watchdog Ofcom has rejected plans for the BBC to give existing licence fee money to other broadcasters. |
| Ofcom's report stated: "We reject 'top slicing' the BBC's funding for programmes and services." | Ofcom's report stated: "We reject 'top slicing' the BBC's funding for programmes and services." |
| But it says unused cash allocated to digital switchover before 2012, and surplus licence fee money after then "are both credible funding options". | But it says unused cash allocated to digital switchover before 2012, and surplus licence fee money after then "are both credible funding options". |
| The regulator's report also left the way open for a possible merger between Channel 4 and Five. | |
| Ofcom also proposed that the partnership between Channel 4 and BBC Worldwide be extended. | |
| The report examined structural changes in the commercial broadcasting sector, including the digital switchover in 2012 and pressures on television advertising. | |
| It estimated this will leave a shortfall in funding for commercial TV of up to £235m a year by 2012. | |
| Ofcom said the key was not to prop up Channel 4 for its own sake but to ensure there was a viable institution apart from the BBC that would provide public service content that the market would not. | |
| The alternative would be to give Channel 4 public funding directly, relieve it of its public service remit and make it a fully commercial network, or mothball it. | |
| ITV should be an essentially commercial network, Ofcom said, but should retain a "modest but important public service commitment" to news and UK content. | |
| The channel's networking system was probably unsustainable, the report found. | |
| Public service | |
| The BBC had offered to share some news gathering resources with ITV, but Ofcom said the government needed to create an alternative plan to secure the long-term future of local news in Scotland, Wales, Northern Ireland and the English regions. | |
| It suggested the establishment of independently funded bodies to provide regional news, at a cost of £30 to £50 million. | |
| Channel 4's chief executive, Andy Duncan, told the BBC a merged company "with Channel Four at its heart" would provide financial stability and safeguard public service broadcasting. | |
| He said:"In five, ten years' time, we want in Britain the BBC and one other strong organisation providing public service broadcasting in this country. | |
| "We don't want to have a situation where we're only reliant on the BBC - good as it is - because I don't think that's good for the public and I don't think it's good for the BBC." |