Channel 5 is alive but the losers are kicking

City & Business

CHRISTMAS 1992 brought nothing but sacks of coal for ill-fated Thames TV. Just as it was winding down, handing control of London's weekday airwaves to Carlton, the Independent Television Commission (ITC) dashed what seemed its last broadcasting hope. A politically inspired franchise loss, many thought, following the storm over its Death on the Rock documentary about the killing of three IRA terrorists in Gibraltar, had led to the loss of its Channel 3 licence. Then the ITC booted its twitching body into the grave, denying Thames Channel 5, Britain's fifth terrestrial channel. The irony: in 1992, Thames was the only bidder, offering just pounds 1,000 a year, but its bid did not stack up financially.

On Friday, the corpse came back to life. Christmas came early for Thames - now Pearson TV - as the ITC's second bite at C5 degenerated into further farce. The irony this time: Pearson-led Channel 5 Broadcasting's (C5B) pounds 22m a year bid was way below UKTV's pounds 36m and fronted, to boot, by Greg Dyke, former boss of Thames' weekend rival, LWT.

The ITC insists, after five months' deliberation and a week's tense prevarication, that its 10-member board was unanimous in ruling out UKTV, led by Canada's CanWest and Lovejoy producer SelecTV. Yet cries of "establishment fix" by both UKTV and Virgin, which Pearson matched to the last penny (more of that later), have a familiar and plausible ring.

Both were able to maintain a service. Financing was not a problem, the ITC said. Instead, both failed that highly subjective holy of holies, "the quality test". Despite UKTV's having twice as many independent producers as C5B, the ITC pulled it up over its "limited range of suppliers". Despite Virgin's radio success, and backing from Hollywood's Paramount studio, the ITC said record-breaking Richard Branson showed "little sign of innovation".

News and sport, or lack of, seem to have played a key role. Yet the ITC hardly kicked up a fuss when ITV ditched Dickie Davies and World of Sport. And there is a serious argument whether Virgin's proposed short news bulletins on C5 show more innovative thinking than more of the same: the long, repetitive broadcasts already shown on the BBC, ITV and C4.

None of this in any way suggests C5B will not provide a worthy service, starting in 1997 and reaching 70 per cent of the UK population over its 10-year franchise. Its mix of entertainment, sport, religion, news from ITN and the inevitable soaps mirrors conventional - and popular - ITV.

But hardly innovative, cynics say, so cut out the bull. After 1992, in perhaps its last big decision, the ITC can hardly afford another fiasco, the argument goes. So exclude UKTV over financial fears and - as we report below - SelecTV's uncertain future. Richard Branson is also hardly on ITC chairman Sir George Russell's, or Heritage Secretary Virginia Bottomley's, Christmas card lists. This may be just sour grapes, but TV insiders point out that Sir George also chairs Camelot, butt of Virgin's we-told-you- so attacks on the Lottery's excessive profits. After Virgin lost on quality, safe bet Pearson et al had a clear run against BSkyB's token pounds 2m bid, the last horse in the race.

Rupert Murdoch, though, is the only loser not crying into flat champagne. While C5 will spend millions retuning Britain's video-recorders, BSkyB is busy preparing the ground for the real, digital TV revolution yet to come. On Monday, the BBC - working with BT - also presents its pitch to analysts for more of the Government's planned 18 digital channels.

Serious hurdles remain for digital - not least who will pay for the 40 million set-top boxes at perhaps pounds 300 a throw - but the prospect does muddy the waters over C5's real worth.

In the meantime, UKTV and Virgin may be spitting blood. But a judicial review is unlikely to go ahead because "quality" is so subjective a ground.

A "smoking loose end" remains, however. Back in May, both C5B and Virgin amazingly bid exactly pounds 22,002,000 each. C5B has now said there will be no newcomers to its consortium but, despite previous assurances, the suspicion of collusion still lingers. An ITC spokes- man put it quite clearly on Friday: "Should any collusion be subsequently proved, we reserve the right to withdraw the licence. We have put on record what the consequences will be."

Greed at the Grid

ANOTHER, more protracted, farce lurched towards its conclusion this week. On Wednesday, the National Grid - or "National Greed" - finally unveiled details of its pounds 3.5bn on-off flotation, due next month. Though well-hashed, a flick through the press clippings reveals a boardroom tale of how not to lead by example, which is well worth re-telling.

In 1990, just before the electricity industry was privatised, National Grid directors were granted options over shares as "compensation" for perks given to other power bosses. The Grid - namely, the wires and pylons that have a monopoly over electricity transmission in the UK - was to remain private, owned by the 12 regional electricity companies (RECs) that were floated off.

Last year, four Grid directors already stood to make a total of pounds 2m on those options, twice as much as they had paid. Many of the "phantom shares" had, indeed, already been cashed in to a special company trust netting pounds 650,000. Further revelations followed thick and fast: large pay rises; share transfers to wives to save tax; pounds 850,000 of special dividends, not through merit, but purely down to the mechanics of how the Grid is to be floated.

Two directors finally bowed to pressure last week, saying they would donate all or part of their dividend windfalls to charity. Most would say well they might. Grid bosses have always complained they should be judged by the same yardstick as other REC directors. And so they have. Millions made in options because the industry was sold cheaply - the Grid was valued at just pounds 1.2bn in 1990 - are not so much incentives as handouts.

Winning innovations

FINALLY, on an upbeat and not unrelated note, congratulations to former Innovations editor Nuala Moran after winning BT's 1995 "Technology Journalist of the Year" award for a piece titled "Digital Smell of Success" which appeared in this section last year.

Patrick Hosking returns from leave next week.

Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features staging of a playground gun massacre
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
i100This Instagram photo does not prove Russian army is in Ukraine
Morrissey pictured in 2013
sportVan Gaal has £500,000 video surveillance system installed to monitor Manchester United players
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Life and Style
Martha Stewart wrote an opinion column for Time magazine this week titled “Why I Love My Drone”
lifeLifestyle guru Martha Stewart reveals she has flying robot... to take photos of her farm
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
filmReview: Sometimes the immersive experience was so good it blurred the line between fiction and reality
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Tyred out: should fair weather cyclists have a separate slow lane?
environmentFormer Labour minister demands 'pootling lanes' for women cyclists
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices