Ofcom/ITC Airtime Sales Rules Update

The ITC and Ofcom today published an update to their joint consultation on television airtime sales rules announced on 7 October 2003 in the wake of the Competition Commission/DTI decision to allow Carlton and Granada to merger, dependent on a certain stipulations.

Under the ITC’s current Airtime Sales Rules, which all commercial TV broadcasters are obliged to comply with, no major television broadcasters may combine their sales activities to sell airtime jointly. If the Carlton/Granada merger goes ahead, bringing together the two companies sales houses, then it is likely other broadcasters will want to come together to compete.

There will certainly be much contention about changing the rules, particularly from advertisers concerned about the levels of competition in the industry if broadcasters bring sales houses together. They have already railed against the Contract Rights Renewal proposals outlined as part of the stipulations for the Carlton/Granada merger. Still, the advertising market becomes ever more contestable - there are many other avenues (want to put an ad on this site?)

Today’s announcement from the ITC and Ofcom is to confirm that the two regulators are focused on one of two options in regard to airtime sales:

“One option would be to issue new airtime sales rules for the UK television advertising market; an alternative option would be to rely upon general competition law alone. Under competition law, any practice which could prevent, restrict or distort competition would be carefully examined by the Office of Fair Trading and/or Ofcom.”

My take - stolen from the great John Kay - ‘competition where possible, regulation when neccessary’ - is important here. But it’s difficult to know the precise details that will impact on the decision, since submissions (which likely contain commercially sensitive information) remain under wraps. Only by picking through the details once a decision is published will commentators be able to assess the possibilities and neccessities of the two proposed directions.

The ITC (with Ofcom) has to decide at its final November 20 meeting whether to lift the restrictions on mergers between the advertising sales forces of Channels 4, Five, BSkyB, and others like IDS/Flextech, Turner, Universal and Viacom. The closing date for submissions is 14 November. The existing ITC Airtime Sales Rules will remain in force until the joint consultation is completed and the conclusion published.