Review of ITV's contract rights renewal starts

Ofcom and the Office of Fair Trading have formally launched their long-awaited review of the contract rights renewal mechanism imposed on ITV when Carlton and Granada merged.

The mechanism was a precondition of the merger which formed the unified ITV plc and is an automatic system designed to compensate advertisers for dips in ITV1's audience share by reducing the amount of money they have to commit to the broadcaster on an annual basis and thereby protect them against any possible abuses of ITV's dominant position in the ad market.

ITV has long campaigned for the mechanism to be reviewed or scrapped, and in March called it a system that "prevents ITV from receiving fair value for the mass audiences it delivers".

The two regulators said today that they plan to revisit the 2003 report by the Competition Commission that recommended CRR's imposition "and take account of relevant market changes and industry developments in relation to the matters that these sections of the undertakings are intended to address".

They added in a joint statement: "The OFT and Ofcom will consider the evidence carefully before deciding whether a change to the undertakings may be warranted. If the OFT considers that the CRR undertakings should be varied in some way it will make a reasoned recommendation to the Competition Commission, which will decide the outcome after consultation on its proposed decision."