The head of Liverpool-based news agency Mercury Press has accused Ofcom of "losing their nerve" after the regulator rejected a bid to launch a community television station in the Welsh town of Bangor.
The group was the only applicant for the licence and had proposed to launch Bay TV in an area with an estimated 16,000 households – but Ofcom ruled today that the project was not commercially sustainable.
Mercury Press has the local TV for Liverpool under the Bay name and has won two other licences for Mold and Swansea. The Bangor channel would have been operated as part of this family of stations, with some shared programming from the Liverpool production hub.
Ofcom cited concerns that the commercial model was unsustainable. The regulator said it "considered that Bay TV Gwynedd proposed a commercial business model that relied heavily on advertising revenue".
Mercury Press managing director Chris Johnson told Press Gazette: "We're clearly disappointed that they've taken that view. We don't have a great deal of explanation from them as to why they've taken that view.
"What I do think is bad is for them to advertise licences for local television and then lose their nerve when somebody says: We'll take the commercial risk on that.
"For Ofcom to second-guess and say you're wrong to take that commercial risk – I don't believe that's Ofcom's role."
He added: "We saw it as part of a family of stations in Wales and Merseyside. There's a lot of affinity between the Liverpool city region and North Wales. There's a real synergy between the two regions."
In its ruling today, Ofcom said: "The business plan assumed a certain cost base (including paid employees) in order to be able to deliver the hours of output in the proposed service, which would have been a licence commitment in the Programming Commitments".
The regulator was "concerned that the assumptions made by the application in terms of the advertising revenue per household would be unlikely to be achievable. No alternative, sustainable funding stream was offered to
make up a potential shortfall".
"In the committee's view, the applicant would not be able to maintain the proposed service over the licence period and therefore decided not to award the licence for Bangor."
Ofcom has so far awarded 25 local TV licences. The first local TV channel began broadcasting in Grimsby last November. A London channel run by the Evening Standard launches later this month.