There's life after ITV Digital

LET'S not be too sentimental about this: it's not the end of the world if ITV Digital collapses. Certainly it would be a shame and a few tears would be shed.

Furthermore, shareholders in the operation's parents, Carlton and Granada, would feel sore that £800m of their money has gone down the drain (or up into the ionosphere or wherever the money squandered on ill-judged broadcasting ventures disappears).

And no doubt some of the people who have devoted the past four years to the venture would be upset - and possibly out of a job.

But would it cause national mourning? No. Would it provoke angry exchanges in the Commons? Probably not. The collapse of ITV Digital would not really be in the same league as the Maxwell scandal, the Rover saga or indeed something really momentous such as the jailing of Deirdre Rachid.

Put forward this argument, then stand well back. The huffing and puffing starts. Of course it is essential that ITV Digital survives, say the project's supporters. Why? The reasoning usually goes along these lines.

Point one: Britain needs digital terrestrial television - TV that comes straight through your old aerial. It forms a vital part of the high-capacity, lightning-quick information network that will be essential to our lives in the 21st Century.

Point two: the BBC is desperate to ensure that British viewers have the greatest possible choice in the ways they can watch digital television. After all, the Beeb has already spent heavily on the launch of new digital channels and it has more in the pipeline.

Point three - and this is the really big one: if we don't have digital terrestrial television, we will have to fall back on one of only two alternatives.

The first is to link up with the digital world through a satellite dish. (In other words, Rupert Murdoch holds the key to this gateway). Or we go for cable. (And the two companies in charge of cable are scarcely in robust shape. Barclay Knapp's NTL is wrestling with debts of £12bn and Adam Singer's Telewest has just announced 12-month losses of nearly £2bn).

Hence the conclusion that we absolutely must ensure that digital terrestrial TV remains on the air. All of this is absolutely true. But two things are becoming confused. Yes, it is crucially important that digital terrestrial television survives. Indeed, this is something that the Government has explicitly backed, with its optimistic declaration that the analogue signal will be switched off once 95% of the population is on a digital service - some time from 2006 onwards.

But that does not necessarily mean that ITV Digital is the company that need be in charge of it. There is no cast-iron reason why the service shouldn't be taken over by someone else. ITV Digital could simply shrug its shoulders and hand its licence back to the Independent Television Commission without penalty. It would then be up to the ITC to offer the licence afresh.

So, as we mull over the extraordinary torrent of news we have seen about ITV in the past week, let us be clear at least about this: preserving ITV Digital as such need not be an issue of social policy.

A second questionable assumption has crept into the debate about the future of ITV. Commentators seem to think that a merger of Carlton and Granada is a foregone conclusion.

Certainly, the companies are in trouble. They are suffering the effects of a vicious downturn in advertising. They are seeing their audiences desert to other broadcasters such as Sky - not to mention the BBC.

And the cost of keeping ITV Digital going is having a devastating effect on their finances, in part because they are lumbered with a contract rashly signed in better times to pay £300m for the rights to show Football-League matches. Hence, they argue, the only way ITV can survive and prosper is if Carlton and Granada are allowed to merge, opening the way for cost-cutting.

This is a strikingly self-centred view of broadcasting. It would no doubt make life far more comfortable for the companies involved. But remind yourself of one thing: despite its difficulties, despite the advertising downturn, despite the inroads made by Sky and suchlike, ITV still reaches huge audiences. If a company wants to reach the largest possible number of consumers through a single television channel, ITV is the place to go.

Will the Unilevers and the Coca-Colas of this world really be happy to see ITV become a monopoly? No. New legislation may make it legal for ITV to be brought under a single umbrella. But that doesn't mean that a Carlton-Granada merger would be judged to be in the public interest.

A merged ITV could twist the arm of would-be advertisers painfully hard, something that would no doubt prompt serious concern on the part of the Competition Commission. A merger may yet happen. But don't take it for granted.