Hill replies to Derby on TWW

Lord Hill, chairman of Independent Television Authority, last night wrote to Lord Derby, chairman of Television Wales and West Ltd., whose company last week learned that the ITA would not renew its contract.

He said in a letter to Lord Derby: "All independent television contracts are made for a fixed period of time. When a contract comes to an end comes to an end. There can be no presumption that the new contract will be offered to the same company.

Fairness demands that all applicants for a new contract are given an equal chance of success. Were that not so, the whole process of inviting applications by public advertisement would be a farce.

"It cannot be said that all applicants have equal advantages. When its old contract has expired and it seeks a new one, an existing company can offer its performance but a new applicant only its constitution, its policy and its promise.

SECOND CONTRACT
'Vote of confidence'

"But if promise is never to be preferred to performance, then every television company will go on for ever. No superiority in an applicant will suffice. He has not been in, and so he shall not stay out. Is that the suggestion? If it is, I reject it.

"There was a time when TWW was offered its second contract.

"At your annual meeting in April, 1964, you said to your shareholders that this was a 'gratifying vote of confidence.'

Well, the time came for a new contract period.

"The authority chose the applicant [The Harlech Consortium] judged the better. Is there something else it was supposed to do?"

"You complain that you were given no warning. How could we warn you? Until we had studied both applications and interviewed both groups, we could not know whether the new contract would be offered you or not.

"I refer also to the suggestion that the authority owes a duty to the shareholders TWW since their money has financed the operation over the last years.

"On our estimate, anybody who made and retained an original investment of GBP1,000 in TWW has an investment worth, at Friday's price, about GBP10,000. He will also have received a further GBP10,000 in dividends after tax.

"I recognise that not all present shareholders have enjoyed such profits and capital appreciation, and that some may not have heeded the notice you gave in 1964 that the company's contract was for a limited period.

"The commanding fact is that the authority unanimously decided in favour of your competitor. It is no pleasure to the authority to be parting in due course from a company with which it has worked for 10 years. It would have been easier [corrected] in so many ways to leave thing alone.

"But that is not what the Television Act says we should do. However adequate its programmes, a company always lives with the risk that it will encounter a better competitor. In the nature of things, it may not happen often. This time it did."

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Whatever your opinion of Lord Hill may be (and aficionados of broadcasting history tend not to rate him highly), you have to respect his ability to set the record straight.

Comprehensively, he demolishes Derby's main planks as the absurdities they are - that the ITA, a government agency, should owe the shareholders of TWW something; that TWW should have been warned about its impending demise years before; that the Harlech Consortium was offering 'only' promises against TWW's 'proven' track record; and that 'if it ain't broke, don't fix it'.

But who's to decide that something 'ain't broke' if not the regulator?  Who but the ITA could say that Harlech may have been a better choice to TWW?

TWW had nowhere to turn, so was hitting out blindly.  But Hill had a very strong argument at his disposal - to the ITV contractors, the ITA was god.  They obeyed or were smited.

The ITV companies learned a lesson from this.  Although they endured another contract round in the early 1980s, when the spirit of the country was changed by Mrs Thatcher's government and the corporate state was replaced by the capitalist state once and for all, they took their revenge.

Ceaseless lobbying saw the IBA (the expanded ITA) abolished and replaced by a light-touch (or toothless) regulator.  By this means the ITV companies ensured for themselves that their profits (and continued existence) would remain unthreatened in the 21st century.  But the price was the end of any pretence to public service and public accountability.