Ofcom has rejected a BBC-only PSB model as unworkable and has revised its remaining PSB options to protect the “pressing priority” of funding Channel 4.

In a speech to the Royal Television Society last night (Wednesday), the regulator's chief executive, Ed Richards, said Ofcom received only two letters supporting its BBC-only model and that it has now refined its three remaining PSB options.

Richards said he wanted to protect C4's PSB role, with a particular emphasis on digital platforms. Ofcom calculates that without intervention, the broadcaster will face an annual deficit of between£60m and£100m by 2012 - around twice its earlier forecasts and closer to C4's estimate of£100m.

The figure does not take into account funding needed to fulfil initiatives announced under C4's Next on 4 blueprint, which the broadcaster puts at£50m a year.

“C4 should have a significant public service role in the digital age, building on its current contribution as a publicly owned not-for-profit institution,” Richards said. “It needs an economic model and funding mechanism to support this as a pressing priority.”

C4 chief executive Andy Duncan welcomed Ofcom's support.

“We're very encouraged that Ofcom now broadly accepts our forecasts on the size and urgency of our funding gap and agrees that identifying a new funding mechanism for Channel 4 is a ‘pressing priority',” Duncan said.

With its position on C4 now clear, Ofcom is likely to use the publication of its second phase of its PSB review on 25 September to address ITV. Richards said the review would spell out specific short-term measures to address ITV's PSB requirements.

PSB models: Mk II
Revised evolution ITV1 has PSB obligations for UK programming and UK and international news. News for nations and regions would need more public funding. Five would be committed to UK output, particularly -children's TV and news.

Revised BBC/C4 only BBC and C4 could receive -spectrum rights and other regulatory assets of Channel 3 and Channel 5. Competition for new funding could be introduced for nations, regions and local news, with ITV and Five invited to bid.

Revised broad competitive model C4 retains PSB status but pitches against commercial broadcasters for cash to fund PSB content.