ITV calls for end to "outdated" CRR

ITV has called on the competition regulator to abolish contract rights renewal (CRR) for ad sales on ITV1 after only minor adjustments were made to the regulatory mechanism.

Provisionally decided last September, the Competition Commission has now opted to formally retain the CRR mechanism, which was introduced in 2003 to protect advertisers from the loss of competition when Carlton and Granada merged to form ITV plc.

The commission has instead introduced just minor adjustments to CRR taking into account ITV's forthcoming new time-shifted ITV1 +1 service, along with its full high-definition channel on Freeview.

However, ITV was hoping for more drastic change as it views CRR as a "straitjacket" preventing much need recovery in its advertising revenues.

In response, the broadcaster pointed to an "overwhelming case for the abolition of CRR" due to clear economic evidence of seismic change in the TV industry since 2003.

"ITV believes CRR distorts the market and the fundamental relationship between advertisers and free-to-air broadcasters," it said in a statement.

"Moreover it is highly detrimental to continued investment in original programme production and to the health of the UK creative industries.

"This decision confirms the urgent need for a thorough and comprehensive review of the cumulative impact of regulation of the independent broadcasting sector."

The Competition Commission reached its decision after judging that the "competitive environment is still very similar to that identified in the CC's 2003 report".

However, ITV believes that runs in the face of overwhelming evidence from industry stakeholders, including a recent report by Ofcom on the massive growth in multi-channel digital TV takeup.

"The changes described by Ofcom and the arrival of unregulated global competitors such as Google have transformed the market in which ITV operates beyond recognition and hugely increased competitive intensity since 2003. CRR is now an outdated remedy and should be removed in its entirety," said ITV.

"The Competition Commission has failed to appreciate the seismic changes in the market over the last seven years - it presumes that advertisers require the same level of protection and certainty that they enjoyed in 2003. This is clearly at odds with the overwhelming scale of change in the marketplace."

Yesterday, Ofcom revealed plans to deregulate television advertising sales on ITV1, Channel 4 and Five for the first time in seven years.