A YEAR ago the idea of UTV and TV3 getting together seemed logical. Here was unhighly successful television company, with access to Britain's ITV network backing the Republic's first independent commercial television company.

What was so good about the arrangement was that it would minimise competition between UTV and TV3. UTV is not only successful in Northern Ireland, it also has a share of about 12 per cent of the Southern audience as well. Its earnings from advertising in the Republic are estimated at between £2 and £6 million depending on who you talk to.

However, it would appear that it was this success that scuppered the deal. It is believed UTV put forward proposals designed to minimise this competition and give the new service a start up advantage. The IRTC could not agree to those proposals.

When UTV announced it was backing TV3, it was conditional on the regulatory body, the IRTC, agreeing and successful negotiations taking place.

What the companies seemed to have agreed was that UTV should withdraw commercially from the South, so UTV would not, in effect be in competition with itself.

In this it would appear lay the root of the problem UTV could stop buying advertising in the South. It could even seek a payment for this from TV3, but as long as it was being transmitted in the South, it was in competition with TV3 for the only thing that matters in television, audience.

If reports are correct that it was being suggested UTV would withdraw from cable systems and MMDS services, leaving its audience to the new service, then the IRTC had little alternative but to object.

A body charged with ensuring diversity could hardly agree as a condition for a new service that an existing, one, received by 70 per cent of homes be withdrawn. Politically it would have caused huge problems for the Minister responsible for broadcasting, Mr Michael D. Higgins.

NO ONE will confirm that this caused UTV's withdrawal. In a rather enigmatic statement, the chairman of the IRTC, Mr Niall Stokes, said. "As negotiations developed, conflict between UTV's position as an existing broadcaster and its desire to become involved in TV3 became more apparent." Mr Higgins was also at pains to both distance himself from the IRT which he stated was an independent body, as well as emphasising his support of diversity in broadcasting UTV did not seem overly disappointed with the development, hardly surprising when it was also announcing half yearly profits up by 27 per cent. Maybe the Southern television market does not seem quite as attractive as it did a year ago for UTV when it announced it wished to be involved in TV3.

RTE offers extremely strong competition to any new service. It attracts' nearly 60 per cent of the audience share. There is also a range of other services offered to an increasing number of Irish viewers. Over 70 per cent receive the BBC network, British independent television, Channel 4 and a growing number of satellite channels.

TV3 will have to a find a niche in an increasingly crowded market, that next year might include hundreds of digital channels.

Without being able to hand over UTV's 12 per cent share of the audience the task of finding a new audience must seem daunting. Now TV3 has to compete against erstwhile ally. It will have to at about 10 per cent of the audience before advertisers show real interest and probably up to 15 per cent to make money. It will have to do it against not only a new terrestrial channel from Britain, TV5, but a plethora of new pay channels flow ever difficult it is for TV3 to find a broadcaster with £6 to £8 million to invest things are not totally bleak for its chairman, Mr James Morris, who is already in Britain seeking a new investor. Media as an investment is still seen as attractive even if the reasons are more about power and influence than making money.

Britain's Channel 5 was considered an absolute turkey, but attracted quite surprising interest when it was announced. Even though it would be terrestrial when the future seemingly will be digital, when its signal would not reach vast areas of Britain and even though the successful bidder has to retune millions of VCRs, most major media interests put in bids.

Within Europe there are media giants seeking new markets and the proposed new cross media ownership rules, being formulated by the EU Commission, will probably force media money into new markets.

There was little doubt that for UTV to be involved with a Southern television concern would have maximised its advertising. While it has been quite successful in the Republic's market there are many areas it is unable to break into, such as financial services or products aimed specifically at the South. However, it would seem that it wanted a degree of control that the IRTC was to concede unwilling. The TV3 consortium was first granted its licence in 1989. It was withdrawn by the IRTC in October 1991 because it failed to supply a list of financial backers. Court cases followed, right up to the Supreme Court. When it won there was still some doubt about its future, but when UTV entered, its future seemed assured.

A year later it's back to the drawing board. As James Morris traipses around Europe looking, yet again, for an investor, he must wonder if it is all worth it.