Local TV and the price of access

I went to a discussion/presentation on the licencing and business of local TV last week. The session was held at the former LWT building on South bank under the auspices of the RTS. Those speaking were
Dominic Lake of the  Department of Culture Media and Sport DCMS
Peter Davies, Ofcom in charge of setting out the arrangements
Richard Horwood, Channel 6 a commercial bidder for the licence ion London

The local TV is envisage as being a 'network' of City stations operating in area. The service will bestarting in around 21 locations probably in 2013/14.
Local TV will be digital DTT (like Freeview) and the reception is expected to be somewhat patchy as the frequencies used will be of the nature of a 'fill in'.
Transmission aerials are most likely to be situated at Arqiva sites (the near monopoly operator that provides the transmission for Freeview) this will mean the viewers will not need extra reception equipment.
There will be two 12 year  licences
1) Local TV the catchilly titled L-DTPS  operator licences - these will be concerned with the supply of a commercially supported PBS (Public service Broadcasting)
2) The local  MUX operator this will provide the mechanism of getting the channel to the viewer and will provide regulated at cost  price delivery  of the local TV channel to the viewers. To ensure the practicality and profitability for the MUX operator the deal will allow on local TV channel and 2 commercial channels (stated by OFCOM as   ... sufficient to carry two other standard definition video streams. Any other services broadcast using this capacity would need to be licensed under the normal Broadcasting Act regime)- this will allow further 'quasi national' channels to spring up.

Poor Hunt

Local TV has been very much Jeremy Hunt's baby and it has been necessary to sugar the pill that will enable it to get off the ground (if it does) while government does not wish/can not afford to do this it has provided carrots.
Richard Horwood spoke about the need for the  London station be on the Sky platform and to have a PBS slot in the EPG (high number in general Entertainment location  in fact he wants six on DTT and 106 on satellite after BBC, ITV C4 and  Channel Five.
Freeview and Sky are 'offering' prominence - this though in Scotland will be 45 on Freeview.

Can it/should it work?

Perhaps in some locations is the short answer.

The death of local and regional press is a concern for government in terms localism and democracy and politicians (of the major parties) believe local issues should be on TV - the viewers (as a mass) are less sure.

Is it Hunt's sole big idea and a mere vanity project that he will leave as his valedictory?

Has a non stated understanding taken place to permit local TV to be carried on all platforms?

Is local news/coverage best undertaken on limited  DTT capacity, capacity that could be used for improving current services (more HD?)  while local TV could be provided by OTT and broadband?

 Funding

For London, Cardiff Birmingham there could be advertising funds but these will come from a finite pot and will be needed to fund the content - this will affect the incumbent PSBs  they will react by competing for audiences and/or cutting costs this in turn will likely cause the 'Local TV' to provide viewing material  that audiences like and deliver to advertisers (less worthy).

If I was involved in bidding for a licence for a good return it would be the Multiplex one for me!