Ofcom: 'Public teletext unsustainable'

Ofcom has told culture secretary Jeremy Hunt that the benefits of providing a public teletext service are "limited and diminishing", making the licence "commercially unsustainable".

Under the Communications Act 2003, Ofcom is required to secure the provision of a public teletext service in the UK. Any providers awarded teletext licences benefit from access to analogue and digital terrestrial television (DTT) spectrum, but must fulfill certain public service requirements, such as providing national and regional news.

The public teletext licence was held by Teletext Limited from 1993 to January this year, when Ofcom cancelled the award after owner the Daily Mail & General Trust (DMGT) shut down the service on analogue and digital TV platforms.

The DMGT claimed that providing teletext was no longer "economically viable", but Ofcom fined the firm £225,000 for cancelling the service before its licence was due to expire in 2014.

Ofcom decided not to re-advertise the licence to interested parties, as it has been compiling a report on whether maintaining a public teletext licence is a viable prospect.

Today, the regulator told Hunt that the benefits of providing a public teletext service are "limited and diminishing", and are also "outweighed" by the disadvantages of reserving capacity for the service on the DTT Multiplex 2. Ofcom also feels that the licence is "unlikely to be commercially sustainable" in the future.

The watchdog found that use of public teletext has declined in recent years, a trend that would most likely "accelerate as digital switchover progresses". It noted that the DMGT decided to shut down teletext on TV because its online services, such as Teletextholidays.co.uk, were being used much more extensively.

Only 10% of all TV homes used public teletext, but Ofcom noted that these households often had elderly people or the hearing impaired, who did benefit from the service.

However, Ofcom believes that after the switchover is completed in 2012, the majority of viewers will benefit from information services from the BBC and other operators, meaning most of the advantages of a public teletext licence will "be met by alternative means".

It added: "The commercial market is less likely to provide a service with nationwide (up to 98.5%) coverage on DTT, regionalised distribution and regional news and information content. These are the key requirements of a public teletext service, but are also the major source of cost to any potential licence holder.

"The experience of the previous licence holder suggests that the licence as it stands was not commercially sustainable: the licence obligations to universal coverage and regional news and information are a significant source of cost."

Ofcom said that there are a number of ways to maintain a public teletext service, but use the reserved DTT capacity for other purposes, such as launching additional TV services. The regulator has therefore advised the culture secretary that the current licence arrangements are unsustainable and other solutions should be considered.