Channel 5: is the idea still alive?: A new national TV service may yet reach our screens, but it has many enemies, says Gail Counsell

Remember Channel 5, the proposed television station that bit the dust when it was found that millions of video recorders would need retuning, at vast expense? Well, it's back on the agenda. In the next month the Government is due to decide whether to allow the Independent Television Commission, which supports the idea of C5, to readvertise for potential licensees.

The ITC originally sought licensees to run C5 in April 1992. But it transpired that broadcasting on the allotted frequencies would have led to interference with video recorders. It was estimated that retuning them would cost more than pounds 70m. A nervous ITC turned down the only application it had received due to doubts over its financial viability.

Since then technicians have been beavering away and it turns out that the problem is a lot less daunting than originally appeared. The ITC's technical department has concluded that the cost of retuning could be as little as pounds 5m. That means C5 is financially viable again.

As envisaged by the legislation it would be a national station, available to around three-quarters of the population, funded by advertising and providing broad-based programming designed to appeal to all tastes. Like ITV, it would be required to include national and international news bulletins and children's programming, and to originate at least 30 per cent of its schedule itself, rising to 55 per cent within six years - a measure to prevent too many repeats and old movies.

But within the ITC's brief there is scope for variety. One potential C5 licensee is a consortium of Pearson, which owns the Financial Times and Thames Television, MAI, which owns the Anglia and Meridian ITV stations, and Time Warner, the American entertainment giant. This group wants C5 to include city stations, supported by local advertisers, which would 'opt out' to provide their own American-style city-based programming.

Other hopefuls include the American network NBC, and the inevitable Richard Branson and his Virgin group.

But the C5 agenda has shifted since it was first mooted in the Broadcasting Act 1990. Opponents of the channel have turned the argument from one about technical feasibility to one about the future of digital television.

Since 1992, when the Department of Trade and Industry allocated C5 the only two spare broadcasting frequencies - channels 35 and 37 - the idea has caught hold that all television pictures will ultimately be handled as a stream of digits rather than waves. C5's critics want channels 35 and 37 kept clear until they are needed for digital broadcasting. C5 on these channels would reduce the number of channels available for digital television, although supporters of C5 have argued that it is possible to have both.

Few doubt that the future of television will eventually be digital. The questions are how the transition should be made, how quickly it will happen, and who should bear the cost - all bitterly disputed issues.

In principle, digital terrestrial broadcasting would be relatively simple to introduce. For the viewer, it might mean a sharper, more consistent picture; for the broadcaster, it would mean the ability to squeeze more stations on to the same number of frequencies - up to eight on channels 35 and 37, for instance. But initially they would probably duplicate existing channels.

The problem is that digital signals cannot be received by ordinary televisions. Viewers will have to buy a special converter box. The sums involved are - like everything about digital - much disputed. No one has yet produced such a receiver commercially.

The experience of satellite television suggests that if the consumer has to buy the box, the take-up will be relatively slow, even if it is cheap. And at least satellite dishes offered new channels. The ITC has made it clear that the BBC, Channel 4 and ITV would have to continue to broadcast in conventional (analogue) form for at least 15 years to serve viewers without converter boxes. So we would be asked to pay several hundred pounds for a marginal improvement to the quality of reception, when most of us are already content.

Going digital on the two spare frequencies would eventually make room for four new channels alongside the existing four. But how would they pay for themselves? If they were to be free and funded by advertising, they would need to offer sufficiently attractive programming to generate large audiences. It is not clear where it would come from, especially given BSkyB's hold over many film and sport rights.

The other main problem with digital broadcasting is that it has become confused with the question of the nascent high definition television industry in Europe. High definition television sets, offering cinema-style quality, will almost certainly be available by the end of the decade, and they will almost certainly be digital. But they will be very expensive initially, costing thousands of pounds. It will be well into the next century before most households have one - unless viewers are either forced to bear the costs of moving to digital television, or subsidised to do so.

Some say this would be one way for the European television industry to get ahead of its international competitors. The leading players are already Japanese and American companies; whether Europe could seriously beat them is open to doubt. Nevertheless, opponents of C5 and supporters of digital have found a champion in Michael Heseltine, the President of the Board of Trade.

Mr Heseltine appears to have lost the argument with his colleagues in the Cabinet. At their most recent meeting on the subject, ministers decided to go ahead with C5, subject to double-checking with the Radio Communications Agency that it would not seriously hamper the introduction of digital television.

C5's chances have also been boosted by a growing perception that many of those who have been most vociferous about the threat to digital have vested interests in blocking a new terrestrial channel. Almost all the ITV broadcasters, including Channel 4, loathe the idea of another national channel, because it would compete with them for advertisers. The BBC is unhappy at the prospect of losing audience share.

And where do the viewers' interests rank among all this skulduggery and high finance? Not very highly at this stage. Nobody has asked them whether they would prefer digital television or a fifth channel - or, indeed, what programmes they want to watch on either.

That said, one can make a few guesses. Unlike existing channels on digital television, a new channel with a high local content, as planned by the Pearson consortium, would at least offer viewers in most areas a genuine addition, soon, to the options available.