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.

Sport
Alexis Sanchez has completed a £35m move to Arsenal, the club have confirmed
sportGunners complete £35m signing of Barcelona forward
Voices
Poor teachers should be fearful of not getting pay rises or losing their job if they fail to perform, Steve Fairclough, headteacher of Abbotsholme School, suggested
voicesChris Sloggett explains why it has become an impossible career path
Sport
world cup 2014
Sport
Ray Whelan was arrested earlier this week
PROMOTED VIDEO
Arts and Entertainment
In a minor key: Keira Knightley in the lightweight 'Begin Again'
film
Arts and Entertainment
Celebrated children’s author Allan Ahlberg, best known for Each Peach Pear Plum
books
News
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
News
Wayne’s estate faces a claim for alleged copyright breaches
newsJohn Wayne's heirs duke it out with university over use of the late film star's nickname
Life and Style
It beggars belief: the homeless and hungry are weary, tortured, ghosts of people – with bodies contorted by imperceptible pain
lifeRough sleepers exist in every city. Hear the stories of those whose luck has run out
News
Mick Jagger performing at Glastonbury
people
Life and Style
fashionJ Crew introduces triple zero size to meet the Asia market demand
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Santi Cazorla, Mikel Arteta and Mathieu Flamini of Arsenal launch the new Puma Arsenal kits at the Puma Store on Carnaby Street
sportMassive deal worth £150m over the next five years
Arts and Entertainment
Welsh opera singer Katherine Jenkins
musicHolyrood MPs 'staggered' at lack of Scottish artists performing
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Arts and Entertainment
Currently there is nothing to prevent all-male or all-female couples from competing against mixed sex partners at any of the country’s ballroom dancing events
Potential ban on same-sex partners in ballroom dancing competitions amounts to 'illegal discrimination'
News
business
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Business Analyst Consultant (Financial Services)

£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Systems Administrator - Linux / Unix / Windows / TCP/IP / SAN

£60000 per annum: Harrington Starr: A leading provider in investment managemen...

AVS, JVS Openlink Endur Developer

£600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...

Technical Support Analyst (C++, Windows, Linux, Perl, Graduate)

£30000 per annum: Harrington Starr: A global leader in trading platforms and e...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice