Ofcom to examine Channel 4's funding model

LONDON - Ofcom has revealed plans to assess the long-term funding issues facing Channel 4 in its forthcoming review of Public Service Broadcasting, which begins later this year.

The regulator said that Channel 4's board should develop ways to assess its "remit delivery and public service contribution ahead of this period of financial instability".

Ofcom's announcement is in response to the publication of independent analysis conducted by LEK Consulting, which showed that Channel 4's funding model is unlikely to be sustainable in the mid to long term.

Ofcom said today that while there was "no evidence of immediate insurmountable pressures on the broadcaster's ability to deliver its public service remit," it "would work with Channel 4 to monitor the impact of financial pressures over the next few years."

The regulator said that it will work with the broadcaster to monitor Channel 4's financial performance against its PSB remit and commercial pressures.

Channel 4 has responded favourably to Ofcom's announcement.

Andy Duncan, chief executive, said: "Today's statement ends the debate about whether or not Channel 4 is going to face future funding problems and we can now begin focusing on how to address them.

"Ofcom acknowledges that if Channel 4 is going to continue to provide vital public service competition to the BBC, then it is likely to require new forms of public support."

The new forms of public support that Duncan mentions hints at the broadcaster's desire to attract a part of the BBC licence fee. Calls for the BBC licence fee to be "top sliced" and other broadcasters to be given cash, were made in 2005. This could also have led to some money being allocated to ITV to cover its public service commitment.

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