Original URL: http://www.theregister.co.uk/2012/08/10/comux_local_tv/
Wannabe reckons it can broadcast local telly for free
Someone else will pay, we're sure of it
One of the contenders for the licence to run the transmission network for the UK's Local TV stations has publicly boasted it can do it for nothing.
Media biz Canis set up Comux to bid for the licence and will hand it over to small telly stations, once Ofcom has chosen them, enabling the business to run as a cooperative. Local TV is the coalition government's attempt to squeeze 20 small-area TV stations into the White Space gaps of unused radio spectrum in an effort to create "communities".
Without having to make a profit Comux plans to fund the whole operation though the sale of spare capacity, and believes the sale of two broadcast channels will raise enough cash to return dividends to the Local TV operators.
The BBC will stump up £25m to pay for the initial Local TV infrastructure, the contract for which will almost inevitably go to Arqiva (which has a virtual monopoly on UK broadcasting technology). The job of awarding that contract is still up for grabs – though Comux could end up competing with both Arqiva and the BBC for the privilege.
The BBC has confirmed that it's thinking about bidding, and Arqiva has put a bid together, but nothing will be official until the Monday deadline for submissions passes, which is perhaps why Comux has decided to go public ahead of time.
Arqiva will only be interested if there's money to be made: it’s a private company with investors to support. Likewise the BBC will look to turn a profit on the deal by billing the Local TV franchises for transmission, so both could be intimidated into dropping their bids by the assertion that it could all be done for free.
That assertion is based on the premise that Comux can rent out the two spare channels which will become available in each of the 21 areas covered by Local TV at launch. The Local TV operators will be selected in a beauty contest, largely based on Ofcom's faith in their commercial sustainability, which will only be enhanced by Comux's decision not to charge them for transmission.
We asked Comux who exactly is interested in filling these two additional channels, and were told that companies were "bashing down the door" for access to the airwaves. This is all the more remarkable given the BBC's insistence that its £25m not be spent transmitting pornography, psychic chat services, or anything involving premium-rate numbers, which would seem to cut out the most-profitable niche television channels.
Assuming the door bashers come up with enough cash Comux will divide the excess between Local TV companies to cover their transmission costs, which vary based on history and geography. So a Sheffield channel could get a £147,000 dividend for every £1,000,000 that goes to Leeds, which might not sit so well with the bidders. Not that they'll have a choice, if Ofcom decides that Comux is the most beautiful bidder.
Whether the BBC and/or Arqiva will stand against them we won't know until Monday, and it will be another few years before we'll be able to say if Local TV is really sustainable in the UK. ®