Commercial TV says BBC Three will cost it £25m

LONDON - The commercial sector has stepped up its campaign against BBC Three by telling Tessa Jowell, secretary of state for culture, media and sport, that the launch of the channel will cost it £25m.

The commercial sector, including the Independent Television Commission and Channel 4, was asked by Jowell to estimate how much money it thought it would lose as a direct result of the launch of the BBC's £97m-a-year, licence-fee-funded channel for the 16- to 24-year-old age group.

The broadcasters object to BBC3 on the grounds that the market is already very well served by channels such as E4 and Sky One, and they fear they will lose audience share and crucial advertising revenues as a result.

The companies are also lobbying for BBC3's budget to be cut and for some of it to be transferred to the corporation's digital arts channel BBC4, which launched on Saturday with an annual budget of just £35m.

The commercial sector believes that increasing spending on BBC4 would encourage the over-55s to switch to digital. The grey market is thought to be the most reluctant age group to take up digital, potentially holding back the government's plans to switch off the analogue signal by 2010.

The government first rejected the BBC's plans for BBC3 in September because it felt the proposals were not distinctive enough. The BBC resubmitted them, placing greater emphasis on current affairs and news programming specifically targeted at a younger audience.

However, the government recently asked the BBC for more information, fuelling speculation that it might seek conditions from the corporation in return for approval.

One option available to the government, which would undoubtedly seek to please the commercial sector, is to reject BBC3 until the BBC agreed to switch some of BBC3's budget to BBC4.

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