OFCOM, the broadcasting regulator, has published its phase two report and proposals in the ongoing review of public service broadcasting.

The first phase researched what viewers thought about public service programming and identified some of the challenges that threaten its future.

The broad conclusions were that viewers value these programmes very highly indeed and also want them supplied from more than one source, not just the BBC.

However, the review has already highlighted that viewers wants and broadcasters profitability can be two very different things.

The strong growth of digital television and the approach of the analogue switch-off date mean that commercial broadcasters are facing falling audiences and advertising revenue.

This is not a trend that can be reversed, it’s an inescapable fact of television in the digital age.

Currently, the broadcasters operate under licences which carry specified obligations for the provision of certain types of programming, news, local interest, arts, religion current affairs etc.

Based on revenue predictions, Ofcom has calculated that as early as 2012 there will be a shortfall of between £145m and £235m. Channel 4 alone would be facing a shortfall of £60m to £100m.

Ofcom correctly and bluntly stated: “The value of the ITV1 licences will fall below the cost of their current obligations before 2012, with the result that ITV plc may have incentives to surrender those licences.”

Literally, the equivalent of UTV saying let someone else try this if they wish.

However, hopefully it will not come to that because advertisers and viewers alike need a strong UTV in Northern Ireland.

So the Ofcom proposals at this stage are to reduce the programming obligations quickly, by early next year, and then to start planning a new system for post 2014.

Even a single national UK licence is included in the options and the end of the ITV/UTV regional structure.

A dire outlook is not too strong a description.

Under existing rules, UTV is required to produce five hours and 20 minutes of news and four hours of non-news programming per week.

It is proposed that this be cut to just four hours and one and a half hours by this time next year.

Ofcom has emphasised that its aim and objective is to ensure the survival of public service programming on commercial television, though in a much-reduced format.

But with the reference to ‘surrender of licences’ and ‘unsustainability’ it seems that the broadcasters may be able to do whatever they want to survive.

The Ofcom proposals are clearly preparing us for even greater changes in television services over the next five years preceding the new licences in 2014.

Ofcom’s objective is to ensure the survival of public service broadcasting which research clearly shows that the viewers want.

However, it also opens the door for a predatory cost cutting approach which will undo current arrangements and which will probably never be reversed.

It will be two steps backwards now for local commercial television and then at least two more steps backward in a few years time.

The worrying thing for advertisers and viewers is that the undoubted strength of UTV has always been founded on its local touch and content, that’s true of RTE as well.

You can’t keep reducing that without some negative impact on audience delivery and bonding with viewers.

These are indeed challenges that will be difficult to resolve: the death throes of the famous Lord Thomson quote of commercial television being “a licence to print money”, and, for advertisers and viewers, the beginning of the end of commercial television as we know it.