The tortuous process of picking a winner
Wednesday 03 May 1995
Part one of the decision-making process is a period of public consultation. Potential viewers, MPs, interested industry parties and so on have until the 13 June to scrutinise each bid - either at a local library or by obtaining 12-page summaries from the ITC - and make their views and concerns known to the commission.
Under the 1990 Broadcasting Act, the ITC is obliged to award the Channel 5 licence to the highest bidder provided it has met prescribed programming and technical requirements. In addition to the cash bid, which will be paid annually, each consortium's application comes appended with programme proposals and a business plan.
The commission has to be convinced that a prospective operator's business plan, which remains confidential, can sustain a service for the 10-year licence period. This was where Thames, the only bidder on the last occasion Channel 5 was offered for auction, fell down.
The plan must also include satisfactory proposals for adjusting domestic electrical equipment such as video recorders, satellite receivers, home computers and video games, which could experience interference from the frequency Channel 5 will use. VCRs will be most affected, with the cost of retuning them put at £60m to £120m.
The responsibility for retuning and the burden of cost lies with the licensee. To minimise disruption, the ITC has said it expects equipment to be retuned before requests come in from viewers. However, retuning must be carried out within 21 days of a request.
Operators also have to satisfy various programming requirements, but these appear straightforward alongside the technical demands. In addition to an initial requirement that 40 per cent of programmes be originally produced or commissioned for Channel 5, there are four mandated programme categories - news, current affairs, children's and religious.
The ITC also demands that the proposed service must "include programmes of high quality and appeal to a wide variety of tastes and interests". Applicants must therefore justify any decision not to feature any of a list of non-mandatory strands: arts, documentaries, drama, education, entertainment and sport.
Provided these technical and quality issues are satisfied, the commission must honour the highest bidder. Unless, that is, there are "exceptional circumstances". Which means? If, for example, the quality of service being offered was exceptionally high, then the commission has discretion to award the licence to a lower bidder. RW
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