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[HCDX] BBC and Ofcom clash over ITV regional news subsidy
BBC lobbyists and senior Ofcom executives involved in furious row over the size of public subsidy needed for ITV regional news
The tussle over the future of regional news programming on ITV has descended into a furious row between Ofcom and the BBC, after corporation lobbyists and senior executives at the regulator clashed over the degree of public subsidy needed.
Senior Ofcom insiders are understood to be "furious" that the BBC is rubbishing the regulator's estimates that a replacement service for ITV's regional news, provided by independent consortia involving media companies around the country, could cost Â40m to Â60m a year for a basic offering or Â80m to Â100m annually for something more fully developed.
Yesterday the Financial Times quoted BBC officials saying Ofcom's figures were "fantasy".
A senior Ofcom executive directly involved with the issue said today: "This is an extraordinary development, for the BBC to say that our numbers are fantasy. It makes them look foolish, engaging in name calling, attacking Ofcom directly, at a key moment for the industry. I am furious.
"We have not overstated the figures. In our initial public service review [published in September 2008] we put a figure of between Â30m-Â50m to meet the gap, but we were quite tentative about it."
The row centres around the future use of the so-called "switchover surplus" - money left over from the Â130m a year of licence fee funding set aside to help the most vulnerable and disadvantaged get digital TV receivers between now and 2012.
Sir Michael Lyons, the BBC Trust chairman, has already set out the corporation's stall, arguing in a speech last month that the licence fee should not be used to pay for "things that have nothing to do with the BBC's public purposes".
Lyons' comments were seen as a riposte to Ofcom chief executive Ed Richards' suggestion that the digital surplus could provide funding for the independent consortia he envisages will take over ITV regional news provision.
The BBC is fighting a concerted last minute rearguard action ahead of the publication of communications minister Lord Carter's final Digital Britain report later this month, which will set out the government's plan for the future of UK public service broadcasting, among other things.
BBC officials want to prevent the licence fee being "top sliced", or used directly, to fund an ITV regional news service once ITV pulls out of providing the programming in 2012.
The BBC is also insisting that the use of any switchover surplus until 2012 should be directed into universal broadband provision.
At the government's behest, Â650m of licence fee money was earmarked to subsidise the digital switchover between 2007 and 2012 â Â130m a year. However, based on lower-than-forecast takeup of the switchover subsidy scheme so far, it is estimated a Â250m surplus could be left between now and 2012.
Most senior civil servants involved in drafting the final Digital Britain report, due to be published on June 16, are today finalising their contributions to the document, which will then be presented to cabinet ministers.
At the same time, the BBC's offer to form a local news partnership to help ITV out in the short term, by sharing its newsrooms, studios and camera crews is said to offer such modest savings, of around Â7m, on a cost base of between Â50m-Â60m a year, that ITV has reservations about the project. The commercial broadcaster is understood to consider Ofcom's independent consortia plan to be a better long-term solution.
In yesterday's FT BBC insiders asserted that their ITV local news partnership proposal was worth more than Â20m a year, not Â7m - in effect reducing the amount of licence fee money that would be required to subsidise a replacement service further.
An ITV spokesman said: "We are committed to helping find a solution to secure the future viability of regional news on Channel 3 and the BBC partnership might make a modest but valuable contribution to this."
â To contact the MediaGuardian news desk email editor@xxxxxxxxxxxxxxxxxxx or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000.
http://www.guardian.co.uk/media/2009/jun/02/bbc-ofcom-clash-itv-regional-news
-Jaisakthivel, Chennai, India
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