BBC wins ex-ITV Digital licences

ITV Digital's demise has left the English football leagues in financial trouble

LONDON, England -- The British Broadcasting Corp. and Rupert Murdoch's British Sky Broadcasting have been handed the licences left by failed broadcaster ITV Digital in a move heralded as a "fresh start" for the troubled medium.

The two broadcasters and transmitter company Crown Castle (CCI) made a joint bid after ITV Digital collapsed at the beginning of the year. (ITV Digital up for sale)

The new consortium, which beat a competing bid from ITV partners -- Carlton Communications (CCM) and Granada (GAA) -- and state-owned commercial broadcaster Channel 4, has promised to provide 24 digital free-to-view channels available via an existing aerial and set-top box costing £100.

The ITC, which put in a fast-track process to find new companies to step in after the previous Carlton/Granada effort spectacularly collapsed with more than £1 billion ($1.5 billion) spent on the venture, announced the consortium would be given the three licences for 12 years on Thursday.

The government is desperate to meet its target of switching over completely from traditional analogue signals to digital before 2010.

The move has been bugged by technical problems and ITV Digital's demise.

The BBC and BSkyB have said back up will be provided to overcome such problems.

Greg Dyke, Director-General at the BBC, told the UK's Press Association: "This is a fresh start for digital television in the UK and the best outcome for viewers.

"It won't be an easy task -- the platform has been through a major crisis -- but we believe that a simple, entirely free-to-view digital option has the best chance of success with consumers."

Peter Abery, President and Managing Director of Crown Castle, added: "We will now be working closely with the BBC to get the digital terrestrial platform free from the technical problems that dogged ITV Digital and back up and running as quickly as possible."

Both companies pledged to work with other digital terrestrial television (DTT) licence holders, broadcasters, manufacturers and retailers to ensure the long-term success of the platform.

A study commissioned by the Department for Culture, Media and Sport this week showed that more than 40% of households now have digital, although figures were compiled before ITV Digital's collapse.

The BBC has forecast that its proposal will attract another five million homes in five to six years.

As well as satellite and terrestrial digital services, about three million people receive signals via cable.

The government's target is to switch off the traditional analogue signal between 2006 and 2010 but it will not do so until 95% of homes have access to digital.

ITC chairman Sir Robin Biggam said: "The Commission believes that the BBC-Crown Castle application is the most likely to ensure the viability of digital terrestrial television.

"It will target those viewers who have not been so far attracted by digital TV and will help facilitate the move towards digital switchover."

The failure of ITV Digital has sparked a shake-up of ITV management.

The ITC made the DTT approval subject to certain conditions.

One is that BSkyB, which already has about two-thirds of the estimated nine million customers who have digital TV through its satellite service, will not be allowed to manage a licence.

Changes in channel line-up as well as any proposal to introduce pay-TV services will be subject to agreement from the ITC.

The ITC said it was also keen to ensure "all-industry participation" in the technology needed to receive DTT.

If the conditions are met the licences will be granted at the end of July.

Viewers who still have ITV Digital set-top boxes will be able to access the new channels, an ITC spokesman said.

But he added: "The boxes are still an asset of ITV Digital and owned by the liquidator. It's up to the liquidator to decide what to do.

"The BBC needs to discuss this with the liquidator but from a purely practical point of view, they will be able to access the programmes from the boxes."