DIGITAL BRITAIN: THE REPORT. The prospect of a merger between BBC Worldwide and Channel 4 has become less likely after the government backed away from proposals to merge the two organizations in whole or part.
A public corporation, funded by advertising, Channel 4 has found it increasingly difficult to meet its public service obligations. However, in the Digital Britain report published today the government admitted “further work needed to be done by both the BBC and BBC Worldwide on the practical and strategic implications of further structural separation.” It added that changing the terms under which Channel 4 acquires its rights might have wider consequences for a successful UK production sector. “We have made clear to both parties that we are ready to facilitate such joint ventures if commercial terms can be agreed, with the appropriate approvals within the parties’ governance arrangements and any relevant regulatory clearance.”
Work on partnerships of scale between the two organisations on areas including digital channels, advertising and DVD sales was welcomed in the report. This suggests that the UKTV channels currently 50% owned by Virgin Media might in time come under a joint venture between Channel 4 and the BBC’s commercial wing.
The BBC’s work on the IPTV protocol Canvas is noted, the report says that the BBC Trust in considering the proposals it should take in the ability for commercial operators to run monetized services on Canvas-enabled devices. It also says there should be clarity on the incorporation of conditional access and scope for rival EPG/search gateways.
However, the corporation faces the top-slicing of the annual £142.50 licence fee, the money used to fund regional news in the commercial sector. Sir Michael Lyons, chairman of the BBC Trust, called for a full public consultation on the issue. “The money belongs to the licence fee payer and if this money raised for one purpose is used for another it can only be with the public’s support.” Sir Michael said the proposal raised long-term issues about the independence of the BBC.