Ofcom anoints broadcaster: Local TV is nearly here
They will build it, but will you come?
New local TV services will be launching later this year, and Comux - the non-profit cooperative which promised to plough profits back into local TV - will manage the broadcasting.
That puts Comux in line for £25m in BBC cash, beating bids from Avanti, the Community Media Association and the BBC itself for the right to run the transmission network. The network will broadcast Local TV on the Freeview platform across 19 sites, alongside two new video channels which are expected to pay for it all.
The UK government is adamant that we need, and want, local TV stations - to "build communities" as well as to make money. So Ofcom was tasked with finding a way to make it work. Arqiva identified 20 areas with spare capacity, and Ofcom convinced the BBC to cough up £25m in setup costs, and £15m to buy local content. The watchdog then asked for bids, with the winner in each area being selected by beauty contest.
The regulator also asked for bids to run the broadcast side, for fun or profit but also selected by beauty. There are three standard-definition channels in each area so the winner gets the £25m in BBC cash, the right to bill the local TV stations and free rein to sell another two channels to the highest bidder.
There were only four bidders, with the Sheffield-based Community Media Association being knocked off first in the face of stiff competition. The BBC's bid, under the name LMux, was too slow to deploy and planned to sell itself to the local TV stations after three years, while Avanti's was technically interesting in that it planned a single-frequency network which would offer much better coverage and cheaper deployment, but that was on the proviso that it worked - and Ofcom decided the risk was too great.
So Comux gets the gig for the next 12 years, returning all profits to the local TV stations and promising to make its money selling those additional channels.
Ofcom was a little concerned about that model, stating that it was based on "relatively optimistic assumptions about the revenue to be derived from the national video streams" but it also decided Comux was sustainable even if the revenue was less than anticipated, which was enough to win the bid.
Local TV channel franchises have been awarded over the last few months, though we're still waiting for the one that matters: London. But Comux can now start spending that BBC cash and seeing if the numbers really do add up.
Then we'll be able to see if anyone really wants local TV, and if it will really help build communities around the UK. Community radio has had some success, and local TV does work around the world despite the enormous cynicism displayed in the UK. Private businesses are betting millions on the idea, and the BBC is putting £40m of our (licence fee) money on the table, so the question is far from academic. ®