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29/07/2010

Adverts 'Must Sell' Rule Scrapped

The independent regulator and competition authority for the UK communications industries has scrapped rules about the way television advertising is sold.
The move, to be brought into place from 1st September could stand to make commercial broadcasters, ITV1, C4 and Five, millions in extra advertising revenue each year.
The decision, will see the "must sell" rule scrapped. The rule was introduced in 2003 over fears the commercial public sector broadcasters (PSBs) could have withheld slots to drive prices upwards.
PSBs are allowed to run an average seven minutes of adverts per hour and could increase how much they charge advertisers by reducing the amount of ads they make available.
They governed that all airtime available on ITV1, C4 and Five must be sold and that all broadcasters were prohibited from forcing advertisers and media buyers, who want to buy airtime on one channel, to purchase airtime on additional channels.
In March, Ofcom proposed the rules were no longer required saying it could see "few incentives to withhold airtime." However Ofcom's plans were met with a "mixed" response.
Stakeholders have suggested that Ofcom postpone its review and undertake a competition-based market study or a broader review regarding time distribution.
Ofcom commented: "Having reviewed the consultation responses, our view is that no new evidence has been presented to change our conclusions that it is appropriate to remove the rules.
"In addition, we believe we should complete our review now in order to ensure that unnecessary regulation does not prevent the sector from evolving.
"We conclude that we cannot justify launching a broader review of the market at this time given the lack of clarity about the nature and scale of possible competition problems and consumer harm, and the extended period of uncertainty that the sector would face."
(BMcN)
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