Britain's media regulator plans to cut the licence fees paid by ITV and other commercial television firms, to help them compete with digital broadcasting.
Ofcom said today it planned to cut payments for all Channel 3 and Channel 5 television licences to around £90 million this year, compared with the £180 million that would have been due under existing arrangements.
ITV, Britain's biggest commercial broadcaster, said the proposals would slash its payments to less than £80 million this year from £215 million in 2004. Its shares rallied over 5 per cent in early trading.
At 7.25am, shares were up 4.7 per cent at 121 1/2 pence, topping the FTSE-100 index of blue-chip UK companies.
Ofcom said its proposals, which would also mean lower licence fees in future years, assumed Britain's switch-over to digital television would be completed in 2012.
"Since previous reviews in 1999-2001, the value of access to the analogue spectrum has declined significantly, with under 40 per cent of UK households relying solely on analogue for their television viewing," Ofcom said in a statement.
"As homes continue to migrate from analogue to digital, the share of advertising derived as a result of access to the analogue spectrum will continue to decline and the proportion of advertising revenue earned by analogue channels overall is likely to fall," it said, explaining the cut in licence fees.