Hewitt sets date for DTI report into £4bn ITV merger

LONDON - Patricia Hewitt, secretary of state for trade and industry, has said the verdict on the £4bn merger between ITV companies Carlton and Granada will be delivered in early October.

The Department of Trade and Industry was passed the file on the merger on August 21, following an investigation by the Competition Commission.

The DTI's investigation had been expected to take around 20 days to review the findings, meaning it would have been released by now.

However, due to the complexity of the case, Hewitt extended the deadline and the report is due to be published at the start of October.

"I aim to publish the report by the week beginning October 6," she said in a statement today.

The main sticking point in the creation of a single ITV is the combining of Carlton Communications' and Granada's sales houses. This has been opposed by rival broadcasters, media buyers and advertisers because it would mean that they controlled more than 50% of the TV ad market, raising concerns that it could drive up the price of airtime.

A number of remedies have been suggested including spinning off one or both of the operations. However, Carlton and Granada have rejected these proposals saying they would call the deal off if this happened.

The Competition Commission proposed two other possible solutions to the problem of the monopoly a combined sales house would have.

The first would see a minimum amount of ITV's airtime auctioned off each year to a third party, which would then be sold to a secondary market.

The second would allow advertisers to renew share deals, but based on the same terms as previously agreed. Advertisers would also be allowed to reduce the number of ads shown, without losing their discounts, if ITV's share of viewers decreased. Share deals give advertisers discounts over a period of time if they agree to spend a certain amount of money.

Granada and Carlton's plans are also under threat from a rival proposal headed up by David Elstein, the former chief executive of terrestrial broadcaster Five.

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