ITC Announces 1998 Licence Fees

The Independent Television Commission has announced the licence fee tariffs payable by its licensees in 1998. The Commission has set the total income required to meet its regulatory expenditure (the cost of licensing and regulating commercial television) at £16.65m. This represents an average increase of 6% and is the first time an increase above the rate of inflation has been stipulated.

The ITC’s director of economic regulation, Sheila Cassells, says that the Commission “intends to undertake a fundamental review of the licence fee structure in 1998 to reflect the impact … of digital television”. Consultation with licensees will form part of this process.

There are three categories of licences: Terrestrial licences (category A); satellite television services, licensable programme and commercial additional services licences (category B); and cable and local delivery services licences (category C). The tariffs for categories A and B relate to the licensee’s revenue, whereby licensees pay proportionally more fees as their revenue (from advertising, sponsorship, subscription etc.) increases. The tariff for category B is less due to the ‘lesser licensing and regulatory requirements’ which apply to this group. The category C fee relates to the number of homes in the licensed area.

The tariff for category A licensees (which include Channel 3, Channel 4 and public teletext licences) will generate a 1998 income to the ITC of around £13.1m, an increase of 4% on the 1997 level. Category B is expected to generate about £2.5m, an increase of almost 9% year on year. The minimum fee for both categories has been increased in 1998 for the first time since the tariffs were introduced, from £225 to £240.

Channel 5 will also be subject to the category A tariff once it has completed its transitional period during which the fee is fixed at £10,000 for the first year and £47,000 for the second. An estimate of multiplex licensee tariffs has also been included in the 1998 calculations and will be payable from the date of the grant of the licence.

Independent Television Commission: 0171 306 7743