U.K. regulators eye ITV ad rate system


LONDON -- Media regulator Ofcom and antitrust body the Office of Fair Trading on Wednesday launched their long-awaited review of Contract Rights Renewal, the system by which commercial broadcaster ITV charges for advertising.

ITV executive chairman Michael Grade and his predecessor Charles Allen both lobbied against the mechanism, which they said put a "straightjacket" on the broadcaster by forcing it to lower advertising tariffs according to program ratings. CRR is estimated to have cost ITV more than 100 million euros ($198.6 million) last year.

In a joint statement, the regulators said they will evaluate the long-term case for CRR and refer their findings to the Competition Commission.

"The OFT and Ofcom will consider the evidence carefully before deciding whether a change to the undertakings may be warranted," the statement reads. "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."

CRR was introduced in 2003 following the merger of Carlton and Granada to create ITV, the U.K.'s biggest commercial broadcaster.