UK Culture Minister to look into allowing free TV to charge re-transmission fees

By Paul Sandle

LONDON, Sept 9 (Reuters) - Culture Secretary Sajid Javid said on Tuesday he would examine whether Britain's so-called public service broadcasters like ITV (LSE: ITV.L - news) should be allowed to charge cable and satellite operators to carry their transmissions.

Channels from the publicly funded BBC and commercial PSBs are currently carried for no fee on the platforms of cable company Virgin Media and satellite broadcaster BSkyB , under rules that ITV and Channel 4 want changed.

British public service broadcasters receive radio spectrum to make their channels universally available at no charge to the public, apart from the TV licence that funds the BBC.

In return, PSBs have an obligation to provide minimum amounts of programming covering various topics.

Javid said the television landscape had changed since some of the rules were introduced in the 1980s to support an emerging cable industry, and it was time to look at how they worked for viewers today.

"In the coming weeks, I will take a long, hard look at the balance of payments between broadcasters and platforms." he told an audience of industry executives at the Royal Television Society's conference.

ITV on Monday pressed for the introduction of re-transmission fees, saying that the income would support more investment in original programmes, as the fees do in the United States.

BSkyB, however, countered by saying ITV wanted the very significant benefits of its PSB status, while cherry-picking from a fundamentally different U.S. market.

"If additional charges were introduced, the reality is that millions of households would end up paying for PSB channels that are supposed to be free," said Graham McWilliam, Sky's Group Director of Corporate Affairs.

PSBs currently receive prime position in the pay-TV companies' electronic programme guides (EPG), used by about half of Britain's households to plan viewing.

The Culture Secretary said EPG prominence would be a factor in the consultation.

Liberty Global (NasdaqGS: LBTYA - news) , the owner of Virgin Media and a new minority shareholder in ITV, said the position adopted by ITV on Monday had raised eyebrows at Liberty.

"We fully support -- we mostly support until a few days ago -- the ITV strategy," the company's chief strategy officer James Ryan said earlier on Tuesday. "We certainly don't think the re-trans debate is something we should be supporting." (Editing by Greg Mahlich)