ITV and Channel 4 have been told they should not expect payment from operators such as Virgin Media and Sky for carrying their channels, despite the government closing a legal loophole that had previously prevented charging retransmission fees.
The law was introduced in the 1980s to encourage the growth of the cable-TV industry, but the public service broadcasters have long argued that it is out of date and allowed pay-TV companies including Virgin Media and Sky free access to commercially valuable TV content.
A study submitted to Ofcom said ITV estimated that retransmission fees could be worth as much as £121 million (€141m), while Channel 4 said they could make £75 million. But despite the repeal of the retrans condition, the government made it clear in a separate response to a lengthy consultation carried out by Ofcom that it did not expect broadcasters to do so.
“Government considers that the commercial public service broadcasters are fairly compensated for their licensed channels,” it said. “Government therefore expects that there will continue to be no net payments between all platform operators and the public service broadcasters for carriage of their licensed channels going forward.”
The announcement was welcomed by Virgin Media, who said any move to start charging retransmission fees would have led to their customers having to pay higher prices.
But despite the clear guidance from the government, ITV said they would now press ahead with commercial negotiations with the pay-TV operators.
ITV said: “We have consistently called for major pay-TV platforms to pay UK Public Service Broadcasters fairly for the ‘transmission’ of their channels ending what is effectively a multimillion pound subsidy — and this is clearly a welcome first step in that direction.”