Digital terrestrial broadcaster ITV Digital is to be put into administration on Wednesday after it made clear it could not meet payments to the Football League, industry sources have said.
Putting the broadcaster into administration is likely to throw the government's plans for universal Internet access into disarray. The government has been keen to promote digital TV as a way to get more of the population online, planning educational campaigns and trialling free digital TV giveaways in deprived areas.
All digital platforms come with interactive TV and email capabilities and these are becoming increasingly sophisticated. In September, for instance, the Nationwide launched an Internet TV banking service. The company did not align itself with a specific digital television operator's service, but the move was expected to boost confidence among other companies offering digital TV services.
ITV Digital was formed by a merger between ITV and ONdigital, and was widely seen as a necessary response to dwindling set-top box sales.
Accountancy firm Deloitte & Touche, brought in last month to restructure ITV Digital, is to be appointed as the administrator, sources said. Deloitte & Touche declined to comment.
ITV Digital, owned by TV groups Granada and Carlton Communications, operates at a loss and had sought to cut the payments it owed to the Football League for the broadcasting rights to soccer matches.
"We don't hold out much hope for a rescue," a source close to ITV Digital told Reuters. Granada, Carlton and ITV Digital all declined to comment.
Research group Gartner estimates that 15 million people will be accessing the Internet through their television by 2003 and Forrester estimates that the market will be worth £18bn across Europe by 2005.
Reuters contributed to this report