Ofcom proposes removing 'must sell' rule around TV advertising

Ofcom has launched a consultation to look at scrapping rules that force ITV1, Channel 4 and Channel Five to sell all their advertising minutes and allowing all UK commercial broadcasters to freely offer bundled airtime deals across services. The proposals, which Ofcom previously outlined in January , could theoretically allow ITV, Channel 4 and Five to earns tens of millions of pounds of extra ad revenue each year. Ofcom is proposing to remove the "must sell" rule around ad minutes, which was introduced in 2003 because at the time the commercial public service broadcasters (PSBs) could have withheld ad slots to drive up prices – digital TV channel proliferation has reduced the impact of such a strategy. The regulator is also proposing to allow conditional selling – the bundling of several different channels into ad airtime sales deals. It is currently illegal for TV companies to force ad sales deals to include certain channels, but Ofcom today argued that any anti-competitive issues would be dealt with on a "case-by-case" basis. "In the last few years the TV sector has moved on with substantial increases in the take-up of digital services and in the number of available channels," said Ed Richards, the chief executive of Ofcom. "We are proposing that these rules be removed in light of broader developments in the sector." Later in the spring Ofcom will publish proposals on "harmonising" the amount of advertising minutes allowed on commercial PSBs such as ITV, Channel 4 and Five, as compared to non-PSBs. Ofcom's consultation ends 7 June. The commercial PSBs run on average seven minutes of adverts an hour across the day, while non-PSBs can air an average of nine minutes. PSBs are not keen for the amount of advertising to increase because they fear the price will drop. Their preference is for non-PSB minutes to drop. But digital channels carrying sport, news and films already run with significantly fewer ad breaks – about five minutes an hour. Last year Ofcom had considered an option of allowing PSBs to run an extra 20 minutes of ads during some evening peak time. The plan, heavily supported by ITV , would have kept the overall weekly average of peak-time ad minutes – currently 40 minutes each night between 6pm and 11pm – the same, but allowed broadcasters to shuffle when they used them and stack more into hit weekend shows. The media regulator estimated that it could have benefited PSBs to the tune of £40m a year, but rejected the proposal. However, the issue is part of the consultation set to be published in the spring. If Ofcom agrees to the proposal, the new system would be in place for this autumn's trading season for 2011 airtime sales deals. "Underpinning all of our work this year on advertising is a commitment to reduce and simplify regulation whenever there is no clear evidence of a public interest which requires regulation," said Richards today. In November the shadow culture secretary, Jeremy Hunt, indicated that the Conservatives would relax rules such as the restriction that forces PSBs to sell all their airtime. • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".