Carlton calls for cut in ITV licence fee

The battle over how to encourage the consumer take-up of digital terrestrial television was ratcheted up a notch last night when a senior ITV executive demanded that the Government significantly reduce the estimated £200m in annual licence fees paid by commercial broadcasters.

It marked the first time that an ITV licence holder has seriously questioned the licence fees paid for Channel 3's regional broadcast licences. Until now, ITV executives have accepted the licence charges as a justifiable cost for their access to valuable broadcasting spectrum, over which they sell nearly £2bn in advertising a year.

Speaking to the Royal Television Society, Nigel Walmsley, deputy chief executive of Carlton Communications, said the government needed to "reduce Channel 3 licence fees significantly". He added: "What is the point in asking the private sector [largely the ITV companies] to finance the build of a national digital terrestrial infrastructure while charging ITV £300m a year in extra taxes?"

Mr Walmsley urged the Government to permit digital terrestrial TV signals to be broadcast over more frequencies and with increased power. He also blamed the Department of Trade and Industry's Radio Communications Agency for reneging on the assignment of spectrum to ONdigital that had been promised when the digital terrestrial platform launched in 1999.

Although the ITV companies are expected to save about £100m a year under a scheme that rebates the tax for digital households, Mr Walmsley noted that over five years the ITV companies, which also include Granada and Scottish Media, would still pay £1bn in licence fees: "This is equivalent to providing 5 million homes or 15-20 per cent of the population with free set-top boxes or subsidised integrated digital televisions.