Ofcom fines DMGT £225,000 for closing Teletext

Ofcom has fined the Daily Mail & General Trust £225,000 for closing Teletext before its licence expires in 2014.

The Daily Mail publisher closed the television service last December after it posted operating losses of £4 million in the year to 4 October 2009.

Ofcom said in taking the decision to “cease providing key elements of the service in December 2009, Teletext committed a serious breach of the obligations in the public teletext service licence such that the licence was revoked.”

“In accepting a licence, the broadcaster takes account of the likely cost of the obligations under the licence, and the value of the benefits associated with the licence, for the duration of the licence period,” Ofcom added.

The media regulator, which could of issued a heavier fine of up to £500,000, said it had given “consideration” to DMGT’s case before deciding the penalty.

In a statement, Ofcom said: “The committee took into account Teletext’s representations that the digital public teletext service was structurally loss making because the amount of digital capacity reserved for the service was inadequate.

“Teletext stated that, by contrast with the Channel 3 [ITV] and Channel 5 licensees, for whom sufficient capacity had been reserved to enable them to offer new digital services on the [Freeview] platform, the digital capacity awarded to the public teletext licensee was inadequate to replicate the depth of (non-advertising) content on the analogue service and inadequate to allow the digital service to include sufficient advertising to make it commercially viable.

“The level of the financial penalty to be imposed in this case should be sufficient to act as an effective incentive [to all licence holders] to continue to provide all elements of their respective licensed services throughout the licensed period, even if the licensee believes that there are commercial reasons for it to cease providing all or part of the licensed service during the licence period.”