Broadcasters and politicians welcomed the Independent Television Commission's decision to award the licence to operate Britain's fifth terrestrial channel to Channel 5 Broadcasting as a triumph of quality over cash.
Many were also pleased to see Greg Dyke, one of the industry's most charismatic performers, back from the fringe and into the mainstream of British television.
Under the 1990 Broadcasting Act, the commission had to award the licence to the highest bidder, provided that it could fulfil programming obligations and financially sustain the service over the 10-year licence period.
UKTV topped the auction with a staggeringly high tender of pounds 36,261,158, followed by Channel 5 Broadcasting and Virgin Television, who both bid (coincidentally) pounds 22,002,000. New Century Television, a consortium including Granada and BSkyB, trailed at just pounds 2m.
Contrary to speculation, UKTV's bid was rejected. The commission expressed doubt yesterday over the ability of UKTV "to secure sufficient programming of high quality". It said that the consortium was too reliant on a single supplier, and repeats would have accounted for 50 per cent of output - "higher than for any other applicant".
Virgin Television's bid foundered on its proposed news service which, for the first five years,would have consisted of short hourly bulletins, compiled by a "small" news staff with "insufficient provision for editorial supervision". There was concern too that no post for a director of programmes had been proposed, leading to fears of an unduly heavy burden on the chief executive. Virgin had failed to provide "satisfactory evidence" that it could deliver high-quality output, in a schedule seen as overly dependent on drama, entertainment and children's programmes.
That left two bids which the ITC felt had passed the quality threshold - Channel 5 Broadcasting and New Century Television. The former's pounds 20,002,000 bid carried the day.
Before the Channel 5 Broadcasting's new service begins on 1 January 1997, the company faces the task of re-tuning every video recorder in its transmission area, to avoid channel interference. Despite fears of a burglary epidemic through bogus re-tuners, all bidders were confident that the work could be carried out smoothly, and, once this has been done, Channel 5 will reach 70 per cent of Britain's television viewers.Reuse content