THREE YEARS OF TEETHING TROUBLE

Getting a fifth terrestrial channel on air has proved problematic. The Independent Television Commission - charged with overseeing commercial TV - first invited bids in 1992, only to shelve the idea when the single bidder, Thames, failed to provide

evidence of firm financial backing.

This time, a storm over the Government's media cross-ownership rules has cast a pall over proceedings. At the centre of the storm is Rupert Murdoch, who has a 40 per cent stake in the Channel 5 hopeful BSkyB.

Some of his competitors, and a handful of backbenchers, have called for changes in the bidding process, under which the highest bidder gets the licence - provided quality thresholds and financial backing are acceptable to the ITC. The fear is that Mr Murdoch, with his five national titles, extensive US holdings and a stranglehold on UK satellite broadcasting, will make an offer that cannot be refused.

The two other likely bidders are a consortium led by Pearson, which publishes the Financial Times, and Virgin TV, the multi-partner group put together by the Virgin Group. Other bidders - Time Warner, the independent production company Chrysalis, and the ITV licence holder Yorkshire-Tyne Tees - have long since dropped out, perhaps because of the cost of retuning 6 million VCRs which cannot receive a clear signal for Channel 5. Those costs forced Mirror Group and its partners, NBC and SelecTV, to

back out last week, having spent £1m preparing a bid. Late yesterday, however, SelecTV was still hoping to launch its own bid.

The channel will only reach 70 per cent of UK households. Many of the rest, it is presumed, will be able to watch via cable or satellite.

The ITC will announce the size of the bids today. A decision is expected this summer.

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