Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by Local Broadcasting Group Limited (LBG)

  I know that Richard Price has spoken to you already about what has happened at LBG, about our intense disappointment at the funding shortfall, our expectation of further funding, and our longer term belief that local television services will and should become a regular part of the broadcasting landscape. I know, too, you have told Richard you still wish to be supportive—for which our thanks.

  The action we have taken is due partly to the present economic climate and technical problems with the strength of the television signal in certain LBG licence areas. However, it is also because of the uncertain regulatory environment in which we operate. The fact that RSL licences are only for four years (in contrast to ten years for ITV companies), and can be withdrawn at any time for an alternative use, makes it difficult to attract new investors. Investment is also hindered because RSLs have no guarantee of digital capacity, and therefore no future after analogue switch-over.

  The ITC has been most complimentary about the quality of our schedules and our attempts to create credibility for this new sector. The ITC's approval to operate the revised schedules for a maximum of six months is currently being sought. During this period, the administrators will seek to find a solution to the funding shortfall.

  Richard and I continue to believe that free-to-air, high quality, local television will become a valued part of the television landscape and hope that a restructured LBG will play an active part in developing this service. As a measure of the potential of local broadcasting, Telewest has confirmed it will screen the LBG local schedule in those areas where the LBG analogue signal and its cable network match.

  The comments we submitted to the consultation on the Communications White Paper, and in our briefing, remain valid. If the Government could, in the next few months, urgently address our two key issues—extending the length of RSL licenses, and assigning local television digital spectrum—this would provide a catalyst for further investment. The ITC has said it believes that the length of the licence is for Parliament to determine, not the ITC.

  We believe these questions have a wider significance in terms of the Government's considerations about the shape of the future broadcasting marketplace. With the decline of ITV's regional broadcasting commitments and the moves towards further ownership consolidation, local broadcasters could—given a stable regulatory environment and a longer-term future—become the main provider of television serving local communities.

  It is still our intention, therefore, to submit written evidence to your Select Committee inquiry, and we would still very much welcome the opportunity to give oral evidence. In the meantime, should you need further information, please do not hesitate to contact me.

4 December 2001

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