Ofcom renews Channel 3 and 5 licences

UK broadcast regulator Ofcom has renewed the licences for Channel 3 and Channel 5 for a further 10-years, beginning January 1, 2015. 

The Channel 3 licenses relate to ITV and its Scottish and Northern Irish counterparts STV and UTV, with Ofcom also due to create a separate Channel 3 licence for Wales and a new one for West and South West of England – as previously announced in July 2013.

Financial terms for the renewed Channel 3 and 5 licences comprise two different types of payment – a fixed annual cash payment and a percentage of the licensee’s qualifying revenue.

“To assess the amount of the annual cash payment, Ofcom is required to determine the amount which, in its opinion, would have been the cash bid of the licence holder were the licence being granted afresh in a competitive auction process,” said the regulator.

This came to a nominal amount of £10,000 per annum for the Channel 5 license and each regional Channel 3 licence.

“Historically the most valuable benefit associated with the licence was the ability to broadcast on analogue. Since digital switchover completed in 2012 however, this is no longer the case. The main remaining benefits associated with holding the licences include reserved capacity on DTT (Digital Terrestrial Television) and the right to ‘appropriate prominence’ on electronic programme guides (EPGs),” added Ofcom.

The current Channel 3 and Channel 5 licences are due to expire at the end of 2014.