Ofcom has unveiled its vision for the future of public service broadcasting (PSB), essentially clearing a path for a Channel 4 partnership with either Five or BBC Worldwide.
The communications watchdog believes that a one-off allocation from the BBC's digital switchover surplus can be used as funding to take a stake in BBC Worldwide. Alternatively, it could be used to push through a merger, probably with Five.
The second PSB review insists that a redistribution of direct public funding, sometimes referred to as 'top-slicing', is a bad plan. The decision will act as guidance to the government and is not the final word on the matter.
However, Ofcom still believes that the BBC should remain "at the heart of public service broadcasting in the UK with a role in pioneering the development and take-up of content across new digital platforms".
Changes for Five and ITV
Another key recommendation made would see the long-term cutting of ITV and Five's current public service commitments, using the money freed up to plan a "new way of delivering news through consortia funded by competitive tender".
But it's the recommendation on how to make Channel 4 a viable alternative public service broadcaster to the BBC that will attract the most attention.
Ofcom recommends that broadcasters "create a strong, alternative public service voice to the BBC, with Channel 4 at the heart, preferably though partnerships, joint ventures or even mergers.
"A new remit, governance and accountability will be essential," it added.
Why the changes?
The need for a new PSB model stems from the increasingly competitive environment in digital television. A whole host of channels will become available nationwide as the analogue signal is switched off.
It's feared that a change in viewer's habits will mean important programmes are no longer made, narrowing the breadth of viewing.
"The recommendations take advantage of the opportunities created by the revolution in digital media, including the use of broadband and mobile networks to distribute content," explains Ofcom.
"The blueprint also addresses profound structural changes in the commercial broadcasting sector, such as digital switchover and pressures on television advertising, which will create a shortfall of up to £235m per year by 2012.
"If this is not addressed, programmes such as regional news, current affairs, UK children's programming and some types of drama and documentaries will in the future only be available on the BBC."