ITC 'altered rules' for Channel 5 bid

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The Independent Online

Media Correspondent

The rules of the Channel 5 licence bid changed in "the middle of the game", unbeknown to the majority of Independent Television Commission members, the High Court was told yesterday.

The rules had been improperly and illegally altered, but the Commission as a whole, which selected the winning bid, never considered whether what had occurred was unfair. "Had the question been asked, there was only one possible answer - it was unfair," Sir Patrick Neill QC said.

He was acting for New Century TV, one of three unsuccessful bidders for the licence along with Virgin TV and UKTV, who argue that the ITC allowed Channel 5 Broadcasting to win improperly.

They claim that Channel 5 Broadcasting was allowed to increase its funding for programming from pounds 206m to pounds 306m after the deadline for bids in May. Sir Patrick told the court Channel 5 Broadcasting had ignored ITC rules requiring the bidders to show that they had enough funding even in difficult trading situations.

However, rather than rejecting the consortium's bid, the ITC acted "in breach of its statutory duty and contrary to its own rules" by "encouraging or advising" it to increase its cash commitment by the necessary pounds 100m 15 weeks after the deadline. The ITC's advice was equivalent to an examiner correcting a candidate who had failed to read the questions properly, Sir Patrick said.

Jonathan Sumption QC, for the ITC, said the revised Channel 5 Broadcasting shareholders' agreement was clarification of its financial position, which was already known to the ITC.

The case continues today.