CHANNEL 4 - OFCOM RECOMMENDS SPLITTING LICENCE FEE AMONG CHANNELS

The licence fee could be split among commercial channels under new proposals from media watchdog Ofcom.

As Ofcom launched its review of public service broadcasting (PSB), it emerged that dwindling audience figures and a drop in spending by ITV and Channel 4 has left their financial futures "uncertain".

The rise of digital TV - 90 per cent of UK households now use the medium - and a greater amount of time spent online, especially among 16- to 24-year-olds, has led to a fall in public service channels' share of viewing, despite heavy investment.

And among the suggestion to redress the balance and provide competition to the BBC's provision of PSB, the Ofcom review recommends four possible outcomes for the future of public service channels, including an 'evolutionary' model, which would see increased public funding or decreased PSB obligations for the commercial channels.

A 'BBC-only' model is only proposed, as is a BBC-Channel 4 PSB coalition of sorts, and the report also suggests allowing a "wide range of providers" to bid for funding to provide PSB competition to the BBC.

According to Ofcom chief executive Ed Richards, public service broadcasting is at a "crossroads" and a new model must be in place by 2011, lest ITV and Channel 4 face a financial challenge to their licencees.

"Viewers still want a mix of high quality UK-made content, but the traditional television model is not enough to meet all their needs," he explained.

"Today's proposals outline options for a securely-funded PSB future. Now is the time for a wide-ranging debate looking carefully and dispassionately at all the options."