Ofcom wants £300m new public service channel to rival BBC

The media watchdog Ofcom has recommended setting up a new public service broadcaster, with a budget of £300m, to rival the BBC.

The media watchdog Ofcom has recommended setting up a new public service broadcaster, with a budget of £300m, to rival the BBC.

To counteract the growing commercialisation of ITV and Channel 4 and channel Five, the regulator called for the new organisation to provide high quality films, current affairs and factual programmes. As well as using television, the "public service publisher" would offer programmes over the internet and on mobile phones.

In the second phase of its report into the future of public service broadcasting, published yesterday, Ofcom said the proposal would guarantee viewers a "plurality" of public service programmes in the digital era.

The watchdog compared the plan to the formation of Channel 4 when it was guaranteed funding for innovative programming, saying that a new entrant to public service broadcasting would "shake up the market". The new broadcaster could be set up before all the nation's TV sets are switched over to a digital system in 2012.

Stephen Carter, the chief executive of Ofcom, said: "It's not intended to be a conventional television channel. It will be a content producer, a commissioning house and a generator of public service provisions."

The watchdog warned that the existing commercial terrestrial channels would find it increasingly hard to provide public service broadcasting in the run-up to digital switchover, as advertising revenue became scarcer in the face of competition.

"If no action is taken, the BBC will emerge by default as the only public service broadcasting provider of any significant scale. Such an outcome would undermine the TV broadcasting environment, which has traditionally relied on a plurality of public service broadcasting organisations, and has served the UK well. Viewers would be the losers," the report said.

Ed Richards, the senior partner at Ofcom, said it was essential to maintain plurality in current affairs. "If you just relied on the BBC for current affairs you would lose millions of people. People want different perspectives. The BBC needs to be kept on its mettle on order to provide high quality public service broadcasting."

The new broadcaster, which could be based outside London, would cost about £300m a year, spending £200,000 an hour on programmes for three hours each day - towards the upper end of current television budgets. It would be required to commission innovative content and to distribute it as widely as possible via broadband internet, personal video recorders, mobile phone networks and cable, satellite and digital terrestrial television. Programmes might be shown on a dedicated digital channel, or the new broadcaster might reach a "carriage arrangement" with another channel to occupy a window in its daily schedule. Funding would come from an increase in the licence fee, from direct taxation, or a tax on the turnover of other broadcasters.

Any group except the BBC could enter a competitive tender to become the new "public service publisher". Channel 4 has expressed an interest, saying that the proposal "may offer us a means to expand Channel 4's unique brand of creativity onto new digital platforms".

Mr Carter denied the proposal was an attack on the BBC. "It is not possible to have an intelligent debate about public service broadcasting if every question raised is seen as an attack on the BBC," he said. "We are not attacking the BBC. We are not suggesting the BBC's licence fee should be top-sliced."

But while Ofcom said the BBC should be fully funded by the licence fee over the next 10- year charter period, it also recommended the corporation should be subjected to a "mid-point review" in 2011 when it should start to consider introducing limited subscription charges for some of its services.

The BBC said Ofcom's proposals raised "complex questions which we will engage with during their forthcoming consultation".

The consultation lasts until 24 November, and Ofcom will publish its final conclusions at the end of the year.

THE NEW BROADCASTER WOULD...

* Use public funds to commission innovative programmes, which would be widely available.

* Broadcast on new digital channel, or agree to provide programmes for a ''window'' on an existing analogue channel before digital switchover.

* Distribute programmes via a range of technologies, including broadband internet, personal video recorders and mobile phone networks as well as cable, satellite and digital television.

* Cost £300m a year, allowing it to spend £200,000 an hour on three hours of programming a day.

* Not be based in London, to strengthen regional production centres across Britain.