Ofcom plans to cut 'excessive' regional licence fees for ITV

ITV has been given the opportunity to reduce the fees it pays the Government for its regional licences, under changes announced by Ofcom this week.

The communications regulator is planning to streamline the ITV licence review process in order to reduce the regulatory burden and make it simpler for ITV to reapply for its licences.

This is likely to see ITV lobby to reduce its commitment to public service broadcasting - religious affairs, regional broadcasting and the like - as well as push for cuts in the cost of the licences. Its public service commitments are a drain on its resources and result in lost ad revenue.

Currently, ITV pays an estimated £475 million for its analogue licences but this figure is widely believed to be excessive given the expansion of the digital spectrum.

It is also disproportionate to the other broadcasters - the state-owned BBC and Channel 4 pay nothing for their use of the analogue spectrum, while five pays £25 million and has a much lower public service broadcasting requirement.

The cable companies and BSkyB pay nothing for their licences as they own their own networks.

Ofcom is proposing to review the 16 franchises simultaneously, beginning at the end of this year.