Commentary

The ITC has awarded eight of the 16 licences to bidders who did not pledge the highest cash amount, and was not moved to invoke the exceptional circumstances clause.

Of those incumbents that failed in their bids, TVS and TSW did so because it was felt that they could not sustain their programming proposals. “It did not appear to the Commission that TVS would be able to maintain its proposed service throughout the licence period.” The same reason was given for the decision to award the South West licence to Westcountry; TSW’s proposals were seen as unworkable.

In the case of both Thames and TV-am, the channels passed the quality test, but were outbid. The ITC did not feel that there was a strong enough case to invoke the exceptional circumstances in either instance.

Throughout the run-up to the awards, Phil Redmond’s North West TV has been one of the most vociferous bidders, taking any opportunity to publicly criticise rival Granada. The disparity between the level of cash pledged, with Granada bidding £9m and NWTV bidding £35.3m, provides a good example of the supremacy of the quality test over merely financial concerns. Granada was awarded the franchise because NWTV failed to propose programmes and a business plan of a high enough standard

ITC calculations based on the cash bids of the winners suggest that the Treasury will be better off by around £40m, at 1991 prices, throughout the licence period. The programme makers of the 15 Channel 3 companies will have roughly the same money to work with as under the current levy system. “The Treasury will get more money, but not that much more.” ITC chairman George Russell admitted that the whole franchise process has been trying, “every decision was massively difficult.” He refused to comment on the details of why the bids of TVS and TSW were rejected as unsustainable, but stressed that there has been a thorough investigation of all proposals.

Questioned whether the ITC now anticipates legal ramifications from defeated parties, Russell stated that it “ought not to expect any legal challenge” but admitted the possibility of such.

With regard to the defeat of Thames, Russell affirmed that Thames could remain as a programme provider to the network, and expressed his hope that this would be the case. He admitted that the ITC had spent a great deal of time examining the relative merits of Thames and Carlton, and implied that there was very little to choose between the proposals of the two.

However, Carlton’s bid was higher and there were deemed to be no overriding exceptional circumstances.

In reply to an inquiry, Russell stated that there had been no mention in the business plans of any intended merger between Yorkshire TV and Tyne Tees. Russell rounded – off the press conference by asserting that : “A totally new system is emerging. The companies that have won have done so because they are good; those that have lost are not going to disappear, and can still make a valuable contribution. I believe that, at the end of the day, quality has won , and the viewer has won.”