New challenge to Jowell digital decision

The cream of the UK's commercial broadcasting community will tomorrow meet to discuss possible action against the controversial decision by the Culture Secretary, Tessa Jowell, to allow the BBC to launch new digital services.

The BBC announced plans last year to launch two daytime children's TV channels, an arts and culture evening channel and a service aimed at young adults called BBC3. All would be available free-to-air on digital TV. The plans were strongly opposed by commercial TV operators already in those markets.

Last week Ms Jowell gave the go-ahead for all the services except BBC3. Five new digital radio channels will also be allowed. Some commercial operators are looking at legal action or lodging a complaint with the regulators.

Tomorrow's meeting is understood to include executives from the commercial children's stations Nickelodeon, Cartoon Network, Disney Channel and Fox Kids. Representatives from BSkyB, Performance channel, MTV networks, Artsworld, Chrysalis and the Commercial Radio Companies Association are also expected to attend.

"[Fox Kids] haven't yet got a finalised position," said Annie Miles, the managing director of Fox Kids UK. "We will take a view from legal experts then decide what happens." But some are doubtful that commercial operators will be successful in a challenge to the BBC and the Department of Culture, Media and Sport (DCMS). One observer said: "The people who feel by far the strongest are the children's channels. Their chances of succeeding in legal action are not high."

Potential avenues for action are the Office of Fair Trading, the European Competition Commission and a judicial review. Advice from the Office of Fair Trading (OFT) tells some observers a complaint to the OFT would be fruitless.

Legal advisers are poring over the Broadcasting Act, as well as EU and UK regulations, to decide whether there is a chance of challenging Ms Jowell's decision.

A report by Arthur Andersen, the accountancy firm, was commissioned by Nickelodeon on the effects of the BBC's proposed children's channels on the UK market. It found that the children's commercial sector could lose revenue of more than £65m a year. Nickelodeon said up to £250m of investment in children's programmes could be lost in the next five years. The report found Nickelodeon's Junior channel could become unprofitable.

But a survey by the BBC claimed that the public strongly supported its proposals. The DCMS said in a statement: "The Secretary of State has concluded that each approved service is distinctive and that its likely impact on the market is proportionate to its public value."

The new channels will mean radical changes to the currently available BBC Choice and BBC Knowledge. The BBC now has to follow clear conditions that have been set out by Ms Jowell.

It must not allow the new channels to reduce the quality of the current analogue services available through traditional TVs and radios. The BBC must also take part in the promotion of digital TV.