ITV advertising plan is rejected

ITV made a pre-tax loss of �105m in the first half of 2009

The Competition Commission has rejected an ITV proposal that the broadcaster should have more flexibility in how much it charges advertisers.

In its second provisional verdict on the matter, the commission said there were "too many uncertainties" to ITV's proposed loosening of the rules.

The commission had already said last year that limits on how much ITV could charge advertisers should remain.

It is due to publish its final ruling on ITV next month.

'Disproportionate remedy'

Under a system introduced in 2003 called Contract Rights Renewal (CRR), ITV has to charge advertisers less if its audience share falls.

The framework was brought in to prevent ITV abusing its dominant market position.

However, in recent years there has been a marked growth in the number of rival digital television channels, and as a result, ITV says CRR is no longer fair at a time when advertising revenues in general have fallen.

While it continues to call for CRR to be withdrawn in full, its request for increased flexibility that the Commission rejected on Tuesday was within the CRR framework.

The Commission argues that despite the rise in other broadcasters, CRR needs to remain as ITV is still the market leader in the commercial sector.