C4 'faces merger into new broadcaster'

Channel 4 may be merged into a new public service broadcasting "entity", according to a draft version of the upcoming Digital Britain report seen by the Financial Times.

According to the newspaper, the report - led by former Ofcom chairman Lord Carter - says that Channel 4 is no longer viable and would not be even with extra funding from top-slicing the licence fee or other sources, and can therefore no longer provide competition for the BBC in the provision of public service broadcasting.

The report, which will be published on January 26, suggests that Channel 4 be merged into a larger public service broadcasting institution with assets - public, private and from the existing channel - sufficient to provide plurality in the provision of public service television in areas such as news and social significance.

The suggestion is similar to a solution proposed by BBC director general Mark Thompson, who said earlier this week that Channel 4 and Five should merge. The idea was subsequently dismissed by Channel 4 chief executive Andy Duncan, who suggested it would be akin to "mixing oil and water".