Outlook: Digital victory for the Beeb piles on the agony for ITV duo

Nuclear liability; Crest/Euroclear

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Crest unveils plans for Euroclear merger

When the history of British television comes to be written fifty years from now, you have to wonder, the way things are going, whether ITV will merit any more than a footnote. With yesterday's decision to make digital terrestrial TV (DTT) an entirely free to air proposition controlled and directed by the BBC, an already enfeebled ITV has suffered another body blow. Once famously described as a licence to print money, its two main companies, Carlton and Granada, are today discredited and loss making while their share of both TV audiences and advertising is in steep decline. There are any number of ship wrecks to point to on the corporate landscape right now, but these are two of the most spectacular.

The reason? It was called ITV Digital and it stands as an object lesson in management hubris followed inevitably by nemesis. It might have been so different. When Virginia Bottomley, then Secretary of State for National Heritage, first aired the idea of digital terrestrial TV at a meeting of broadcasters in 1996 at Hampton Court, Gerry Robinson, then chief executive of Granada, threw up his hands in horror and said that not a penny of his shareholders' money would ever be invested in such a preposterous proposition.

It has never been adequately explained how he came to change his mind, but as the jostling with Michael Green's Carlton for top slot in ITV began, change it he did, and that's where the trouble began. Carlton was planning to go it alone with Sky, so Granada just had to muscle in. At the start, digital terrestrial was to have been a cooperative venture with BSkyB, but then Sky was ejected from the consortium on the instructions of the competition authorities in Brussels and the two platforms went head to head in a battle ITV could never hope to win.

Every step of the way, ITV was outmanoeuvred, outsmarted and outgunned. It was forced to pay Sky £70m in compensation for being ejected. Believing it could somehow marginalise Sky, it refused to allow its channels to be broadcast on Sky's satellite platform, thus potentially depriving itself of millions of viewers. Michael Green, chairman of Carlton, even offered Channel Four money to do the same, which C4 wisely declined. Belatedly, ITV has seen the error of its ways and has now joined the other free channels on the satellite platform, but at a punishing cost of £20m a year. And then finally there was the stupidity of getting involved in an auction with Sky for the rights to the Football League, in the naive belief that Sky would be have to pay a commercial rate to re-broadcast the rights on its own platform.

In a way, yesterday's decision by the Independent Television Commission is the final defeat. From here on in, digital terrestrial will be an entirely free to air proposition. In theory it might be capable of offering subscription channels at some stage in the future, but in practice it just won't happen, since the Beeb's mass market set top box doesn't contain conditional access technology and therefore won't be capable of receiving pay TV channels. Market foreclosure: it suits the BBC and it suits Sky, but it suits virtually nobody else and it's absolutely terrible news for ITV, which at best can look forward only to continued erosion of viewers and advertisers, with no alternative revenue stream now left to plug the gap.

In the worst case scenario, BSkyB might eventually launch its own mass market free to air channel to challenge ITV, which it appears perfectly free to do in the brave new broadcasting world we are about to enter. This might be done either by acquiring Channel Five, or by making Sky One free to air, or through a greenfield venture. All these things are easier said than done, but Rupert Murdoch is nothing if not a maverick operator. He does things others think impossible or commercial madness, and he's got a habit of making them work as well. Whatever the outcome, the future looks bleak for ITV. Both its main players are damaged goods. The best that could happen to them is to be snapped up by some US media giant, soon to be free to bid thanks to the Government's fury over the incompetence of the ITV Digital adventure.

Nuclear liability

The front cover of yesterday's government White Paper setting out how the UK is going to deal with the legacy of its civil nuclear programme sports a glorious image of rolling English countryside. The inside pages contain a rather more ugly picture. The latest estimate of the cost of clearing up the mess left behind by half a century of nuclear development is £48bn. This is a £6bn increase on the estimate given only eight months ago and officials gleefully admit that no one really has the faintest idea what the final bill will be.

The one thing they do know, however, is that it will be picked up by the taxpayer. The Liabilities Management Agency, the new body being set up by ministers to tackle the radioactive pile, would like the money paid into a ring-fenced fund so it could be invested in the manner of a pension and eventually yield an annuity big enough to pay for the clean up. Gordon Brown, who holds the purse strings of the public finances, has unsurprisingly, pooh-poohed this idea on the grounds that he has better things to do with the money in the short term – like winning an election.

Nuclear waste management is an anaethma to politicians, so it is no surprise that the White Paper can give reassurance on neither the cost of the exercise nor the equally pressing issue of where the waste will be dumped once it has been managed. This is barely touched on at all. If Britain is to meet its Kyoto targets and avoid being dependent on imported natural gas, then more nuclear stations are inevitable. The clock is already ticking faster. But until the legacy of the current generation of reactors has been satisfactorily dealt with, the idea of building any new nuclear stations will command neither the confidence of the public nor the financial support of the City.

Crest/Euroclear

Stock settlement is an arcane old business if ever their was one, but it is also the largest cost associated with buying and selling shares. Its control by national organisations and systems has helped stifle the development of genuine competition between European stock markets. So it is heartening to see Crest, the British settlement system, finally grasping the nettle and agreeing to be folded into one of its big Continental rivals, Euronext, in an attempt to create a single, low cost settlement service for Europe as a whole.

As things stand, it's incredibly expensive to buy shares in a foreign company through the London stock market and have the transaction settled cross border. As a consequence, such transactions tend to take place through local stock markets. The merged company proposes to offer a single, domestic price for all settlement, making full competition between European stock markets a reality for the first time. For the London Stock Exchange, it should be a tremendous opportunity.

jeremy.warner@independent.co.uk