Ofcom warned today that providing regional news programmes on ITV could cost broadcasters up to £64m a year by 2012.
The broadcast regulator confirmed today the costs of the Channel 3 licences to provide ITV television programmes across the UK will outweigh the benefits in little over three years time and were therefore no longer sustainable.
Ofcom has formulated a plan to replace current channel 3 regional news bulletins with 'independent news consortia' to deliver publicly funded regional news after digital switchover in 2012.
The regulator issued its response today to a government consultation on the news consortia proposal which said Channel 3 regional network licences across the country could be in collective deficit to the tune of £38-£64 million by 2012.
Publication of the Digital Britain white paper in June signalled government backing for a series of independent consortia consisting of local media business to provide a public service news-broadcasting alternative to the BBC across the regions of the UK.
Three pilot projects are likely to be launched next year, one each in England, Wales and Scotland. However, the details of how these projects or any future consortia will work; their size, shape and make up, have yet to be established.
Ofcom originally conceived the idea by suggesting the licence fee paid to the BBC could be top-sliced annually to provide funding for the scheme long term. Naturally, the BBC is strongly opposed to the idea.
Ed Richards, Ofcom's chief executive, said in April £60m-£100m a year would be required to fund a non-BBC local news service, with the corporation's digital switchover surplus the most likely source for this money.
Manchester Evening News Media, a division of the Guardian Media Group, has already volunteered to run the English pilot in the North of England.
Scottish broadcaster STV and a collaboration of three newspaper groups have independently signalled their willingness to run a pilot project in Scotland.