Michael Grade: Now TV's golden age is over, ITV must be allowed to compete

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There are seismic shifts underway in broadcasting, and Ofcom's report concurs with iTV's own analysis: the old regulatory regime has run its course. A new settlement needs to be formulated, it needs to be done urgently, and it needs to be implemented before the end of 2012.

The world of 1991 – when the present iTV licences were designed – has gone for ever. Back then there were only a handful of channels. iTV still had an effective monopoly of television advertising. in return for the monopoly, the 15 iTV licensees accepted a high level of prescriptive regulation. To those of us over 50 it was a golden age. I understand the nostalgia of those who wish that commercial broadcasters still had the freedom – and the deep pockets – to cover the same canvas they did 30 years ago.

But that freedom has disappeared along with the monopoly that funded it. And so there is no alternative but to reconfigure the system.

In future iTV must be treated as a business operating in a highly competitive market, and not as an arm of social and industrial policy. Any new PSB settlement must be founded on a new deal that sets a clear balance between costs and benefits. it must now take account of the basic business need to show a proper return on capital. it makes little sense to expect a commitment of resources outside that arithmetic – unless you are Chelsea Football Club.

In terms of timing, we face the asymmetrical risk of leaving action too late. I feel rather like a man on a diving board, with the water draining from the pool, being told to wait to dive until the very last minute. Too early is safe: too late is potentially fatal. With a recession gathering pace, the water is flowing out too fast for comfort.

We all acknowledge the importance of the creative industries to future economic growth. iTV will remain the engine that drives massive investment in UK production. it will continue to make the programmes that viewers value most.

So, let's get on with it and make it happen, so that when the old analogue signal is finally switched off we have in place a new deal that works in the digital age. Only prevarication can stop us getting fit for 2012.

ITV chairman Sir Michael Grade spoke to the Royal Television Society last week