Yesterday, it emerged that five of the UK's terrestrial broadcasters -- the BBC, Channel 4, Channel 5 and S4C, plus the two largest ITV companies Carlton Communications and Granada -- had met to try to thrash out a joint proposal for the licence.
The BBC is thought to have been leading the bid, as it has spent millions of pounds developing its free-to-air digital services such as BBC Four, BBC News 24 and two children's channels.
The BBC's channels continue to be broadcast to ITV Digital's former subscribers, along with a handful of other channels such as ITV2 and the ITN News channel, which are free-to-air channels.
The continuation of a free-to-air platform is important for ITV and the BBC because they want to retain viewers to their channels. However, for Channel 4 and Channel 5 the motivation is less clear.
Channel 4 has always maintained its digital channels FilmFour and E4 would only be available as part of a paid-for package.
Late last night, it emerged that the BBC's ambition of forming a digital consortium of the UK's terrestrial broadcasters was in tatters and that the broadcasters had been forced to submit separate bids for the licence, which was taken from ITV Digital at the beginning of the month.
It is thought that the BBC and ITV failed to agree on how many channels each member of the consortium could operate on the potential service. The BBC already has three channels and ITV has one, but it is thought that ITV wants to launch ITV3 and ITV4 in the future.
However, the more channels the free-to-air broadcaster carries, the weaker the digital terrestrial signal will be.
Poor transmission was one of the issues that dogged ITV Digital's service, because the signal was not strong enough to reach the whole of the UK, while those who could receive it often complained of frozen screens.
The other broadcasters are understood to be keen that a new digital terrestrial service carries fewer channels to help ensure the strongest signal.
The broadcasters have pledged to regroup and attempt to iron out a joint bid in the coming weeks. They have until May 30 to submit a formal, detailed bid to the Independent Television Commission, which is auctioning the licence.
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