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Channel 4 could merge with Five, partner BBC

BRITISH broadcaster Channel 4 could merge with rival Five or form a partnership with the commercial arm of the BBC, as its current advertising-funded model is unsustainable.

Channel 4, publicly owned but commercially funded, could be at the heart of a new alternative public service voice to the state broadcaster, the BBC, media regulator Ofcom said in a report today.

But the regulator rejected any suggestion that Channel 4, known for edgy programming and strong news, should take money directly from the license fee -- a tax on every television-watching household which funds the BBC.

BBC Worldwide is the commercial arm of the BBC and Five is owned by RTL.

Channel 4 chief executive Andy Duncan said in the Financial Times this week he preferred a partnership with BBC Worldwide but RTL chief executive Gerhard Zeiler indicated it could be interested in a merger with 4.

Ofcom said it had issued its report to address structural changes in the commercial broadcasting sector, such as the digital switchover and pressures on television advertising.

These factors could create a shortfall of up to 235 million pounds (US$330 million) per year by 2012 and mean programs such as regional news, current affairs, British children's programming and some types of drama and documentaries would only be available on the BBC, it said.

ITV, Britain's biggest commercial broadcaster, should be freed up as a strong commercial network to make entertaining, engaging content with national and international news but with limited public service commitments.

Independent consortiums could provide regional news.

Ofcom said the government would need to take decisions on many of these matters within the next year as the current public service broadcasting model was not sustainable.

"The central challenge is how a strong and historically successful public service broadcasting system can navigate from analogue to digital," Ofcom chief executive Ed Richards said in a statement.

"These proposals set out what we believe is required to fulfill a vision of diverse, vibrant and engaging public service broadcasting content across a range of digital media."

The regulator said it would work with the government across a range of issues including possible Channel 4 partnerships.


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