It was not going to work
C4 and Five abandon merger plans
It was pretty obvious that this proposed marriage of convenience would end in tears long before the couple would ever get near an altar, but both sides felt pressured into considering at least a relationship of sorts (which is still possible in a cut-down form). As well as Channel 4's public ownership being a major stumbling block, the fact that Channel 4 and Five are similar to each other would have also caused further problems, and Channel Five would have probably ceased to exist in its current form as a result.
The long term future for Channel 4 is now likely to depend on securing an alternative source of funding in order to promote and maintain a public service committment which would also protect against the ravages of commercial competition. As for the eventual fate of Channel Five only time will tell, but it's now more likely to be acquired either by Sky (still a possibilty if SkyDigital takeup stalls) or a large US broadcaster such as Viacom (following the lead of Disney's ABC1).
It's now very likely that Ofcom's public service provider proposal will incorporate Channel 4 as a key component, especially as Channel 4 is now much more receptive to such an idea than it supposedly was under the guidance of Mark Thompson. A separate new public service channel would have a relatively miniscule audience compared with showing the same type of programming on Channel 4, therefore I predict that Ofcom will bow to the inevitable especially given the large number of people within the broadcasting industry that share the same opinion.
