1.1 Following the Secretary of State’s decision not to block the renewal of the current licences, and having received applications for renewal from the current licence holders, we are required to consider whether or not to renew the licences of the current Channel 3 and Channel 5 licensees, in accordance with our duty under section 216 of the Communications Act 2003 (the ‘2003 Act’). In preparation for that determination we issued three consultations in relation to the licences in February 2013.
1.2 This statement concludes a consultation on the proposed programming obligations of the licences. Two other statements published in parallel set out Ofcom’s position on the methodology for determining the financial terms of the new licences, and on the establishment of a separate Channel 3 licence in Wales.
1.3 The licensees told us that, in broad terms and with some amendments, their existing PSB obligations would continue to be sustainable during the next licence period. We consulted on programming obligations that they proposed should carry through into the new licence period. In summary, these were:
1.4 We also sought views on possible amendments to the definition of peak-time across all PSB services.
1.5 Ofcom received 72 responses to the consultation, which we have considered carefully. In the light of these responses, the analysis set out in our section 229 report and further information we have obtained from the licensees, Ofcom has reached the decisions summarised below, and will reflect these in amendments to the current Channel 3 and 5 licences, and the new Channel 3 and 5 licences which will be offered to the existing licensees.
1.6 None of the licensees for Channel 3 and Channel 5 services proposed changes to their network and production obligations. We have decided to maintain the existing Channel 3 and Channel 5 obligations for national and international news and current affairs, original productions, independent productions and Out of London productions.
Regional News in England
1.7 ITV plc proposed that the regional news services that resulted from merging news services in 2009 should again become more localised services. However, to offset the cost of this change, the amount of regional content required in each of its English licences would be reduced (including Border to a lesser extent).
1.8 In most English regions, we agree that ITV’s proposals strike an appropriate balance between a sustainable service, and one that meets the needs of citizens for a more local and thus more relevant regional news service. Accordingly, we have concluded that the Channel 3 licences for regions other than Border, London and Granada should be amended to reflect ITV’s proposals.
1.9 In the London and North West England (Granada) regions, ITV’s proposals would reduce the volume of regional news without providing more localised coverage. These are large regions with significant populations. Accordingly, we have concluded that the Channel 3 licences for the London and North West England regions should retain regional news obligations consistent with a full 30 minutes of regional news in the early evening, though with shorter news bulletins outside peak.
Regional News in Wales, Scotland and Northern Ireland
1.10 The Channel 3 licensees proposed to maintain the current regional news minutage obligations in Scotland (outside of the Border licence), Wales, and Northern Ireland. In Wales, ITV proposed to meet these obligations in part by maintaining a full 30 minutes of news in the early evening, but to reduce the length of lunchtime, late evening and weekend bulletins in line with the proposed provision in England. Ofcom notes that, as a result, ITV would need to provide additional news programming in Wales to meet its regional news minutage obligations.
1.11 We consider that the licensees’ proposals represent an appropriate balance between a sustainable service, and one that meets the needs of citizens for news reflecting the different constitutional arrangements of their nations and regions. Accordingly, we do not propose to change the Channel 3 regional news minutage obligations for Wales, Scotland (outside of the Border licence) and Northern Ireland.
Regional Non-news in England, Scotland and Wales
1.12 The Channel 3 licensees did not propose any changes to the existing regional non-news licence obligations in Wales or Scotland (outside of the Border licence). In England (outside the Border licence), ITV proposed that regional non-news requirements (currently 15 minutes in a normal week) be met within news programming, as at present.
1.13 The current obligations do not prevent the Channel 3 licensees from providing more regional non-news content if they consider it viable. Given this, Ofcom considers that maintaining the current obligations would provide an appropriate backstop. Accordingly, we do not propose to change the Channel 3 regional non-news licence obligations for England, Wales or Scotland (outside of the Border licence).
Regional Non-news in Northern Ireland
1.14 UTV asked that its regional non-news obligations be reduced by 30 minutes to one and a half hours a week to bring it in line with those in the other devolved Nations.
1.15 Ofcom notes that UTV is not actually planning to cut the volume of programming and did not argue that the current levels were unsustainable. In addition audience data supplied by UTV indicates that regional programming is more popular in Northern Ireland than in many other parts of the UK. Accordingly, and in the absence of compelling arguments for reductions in the current level of programming, we do not propose to change the Channel 3 regional non-news licence obligations for Northern Ireland.
Regional News and Non-news in the Channel Islands
1.16 ITV proposed that the Channel Islands should have a combined regional programming obligation (covering news, current affairs and other regional programming) of 3 hours 20 minutes in a typical week, instead of 4 hours at present. As part of this, ITV proposed to retain a full 30 minute early evening weekday bulletin of regional news, but ‘to ensure a sustainable service’(-4-)to reduce minutage at other times of the day and at weekends.
1.17 Ofcom considers that ITV’s proposals reflect a reasonable balance between the demands of a news agenda driven by the specific geographical and constitutional circumstances of the Channel Islands, and the fact that the Channel Islands region has a much smaller population than any other Channel 3 region. Accordingly, we have concluded that the Channel 3 licence for the Channel Islands should be amended to reflect ITV’s proposals.
1.18 Part of the Border region lies within Scotland, but receives less regional programming than any other area in the nations. The referendum on the future of Scotland due next year highlights the particular need to ensure that viewers in all parts of Scotland are adequately served by programming of particular relevance to them. We proposed two options in our consultation for the regional programming obligations in the Border area. Option 1 was proposed by ITV, and comprised a 30 minute weekday news bulletin plus a weekly 30 minute current affairs obligation. These programmes would be for the whole of the Border region, but would have a particular focus on Scotland. Option 2 was proposed by Ofcom and went further, with a 90 minute current affairs obligation instead of 30 minutes. This 90 minutes could be shared with the other Channel 3 licensees in Scotland. Under this option, we suggested there should be split transmission for the England and Scotland parts of the licence area. On the basis of estimates, which we required from ITV, of the costs of the two options proposed in our consultation, we have concluded that, while both would be more expensive services on a per capita basis than most other ITV regions, neither would be disproportionately expensive.
1.19 We consider that the arguments made in favour of Option 2, which could meet consumers’ desire for a more local news service and citizens’ needs for a plurality of news about Scotland, are stronger than those for Option 1. We have also decided that the licence for Border should require separate DTT transmissions for the English and Scottish areas. This would allow DTT viewers in Scotland to see 90 minutes of regional current affairs in a normal week, while viewers in England would be able to see network programming. It will be a matter for ITV if it decides to provide split satellite transmissions – these are not provided under PSB licences.
1.20 Several respondents made clear that, in principle, they favoured an all-Scotland licence. While we recognise that many respondents would find this attractive, it would not be a straightforward option, for the reasons explained in more detail in section 4. In connection to this, we note that, recognising the risk to investment if existing licences are not renewed the Scottish Government was content with renewal of the existing licences, provided that the arrangements for regional news and current affairs in the Scottish part of Border reflected Option 2. An alternative proposed by some respondents – two separate licences for Border England and Border Scotland – is unlikely to be financially sustainable.
1.21 In our consultation we proposed to amend the Border licence to reduce the proportion of regional production required to an appropriate and sustainable level, taking account of the costs of provision and the statutory requirement for regional production. We do not consider that consultation responses raised issues that we had not already considered and we will therefore amend the licence as proposed.
1.22 Our consultation invited views on whether there would be merit in consulting formally on a proposal made by UTV and STV to extend the definition of peak time to 11pm, from its existing period of 6pm to 10:30pm. As we explain in section 5, given the concerns expressed around this specific proposal, and the wider ramifications and complexity of the issues, we do not consider that there is a compelling case for consulting on a specific proposal in the near term.