What is the problem under consideration? Why is government intervention necessary?
Success of a new Government initiative to facilitate local TV may be put at risk by two existing regulations:
a) Ownership ceiling: Independent producers cannot hold a stake of greater than 25% in any licensed local television broadcaster without losing their independent status. This could dissuade them from bidding either in partnership (with a collective share of more than 25%) or outright for a local TV licence.
b)Quota system: Existing regulation demands that all UK broadcasters, including licensed local TV broadcasters, must source at least 10% of their content from independent production companies. Keeping this rule means licensed local TV broadcasters would be subject to increased costs and sanction risks.
Government intends to consult on removing these regulations to meet dual policy objectives of low cost burdens on new licensed local TV services and encouraging the broadest range of licence bids.
What are the policy objectives and the intended effects?
the regulatory barrier preventing independent producers from having more than a 25% commercial stake in the local TV broadcast services without losing their independent status; and
the regulation that imposes a fixed 10% content quota on the newly licensed local TV broadcasters.
Intended effect: proceeding in this way would support the nascent local TV market, by:
creating commercial incentives for independent producers to invest through increased commercial stake in local TV, and thus broadening the number of bidders/expertise; and
shielding licensed local TV broadcasters from the cost burdens associated with meeting the 10% content quota (this quota removal would be consistent with the approach permitted by an EU directive for such quotas at the local level).
What policy options have been considered, including any alternatives to regulation? Please justify preferred option (further details in Evidence Base)
Option 1: Do Nothing: the status quo is maintained. Independent producers could only hold up to 25% stake in any licensed local TV broadcaster without losing their independent status and new licensed local TV broadcasters would be required to source at least 10% of their content from independent producers.
Option 2 (preferred): Deregulate in both areas through one new statutory instrument: (a) remove the ceiling on the permitted ownership stake of a local TV broadcaster by an independent production company; and (b) remove the requirement for local TV broadcasters to comply with the 10% content quota.
Will the policy be reviewed?It will be reviewed. If applicable, set review date: 1 year.
Does implementation go beyond minimum EU requirements?
Are any of these organisations in scope? If Micros not exempted set out reason in Evidence Base.
What is the CO2 equivalent change in greenhouse gas emissions?
(Million tonnes CO2 equivalent)
I have read the Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options.