Regulator Ofcom has revealed that it is "very unlikely" that all local TV stations it is licensing will succeed – in the wake of the collapse of the Birmingham station.
In 2011, Parliament passed legislation allowing the creation of regional stations and issued 30 licences around the country.
Of those, only six are currently broadcasting in Grimsby, Norwich, London, Nottingham, Glasgow and Brighton.
Even though the first tranche has not entirely been successful, Ofcom recently invited applications for new local TV channels in seven areas - Aberdeen, Ayr, Carlisle, Dundee, Forth Valley, Inverness and Stoke-on-Trent.
Birmingham's City TV collapsed into administration last month, owing almost £200,000 and never having broadcast one minute of programming.
Administrator Duff & Phelps said the firm, also known as BLTV, would work with Ofcom to transfer the licence and return funds to creditors.
In a statement this week, Ofcom revealed there were serious concerns about the viability of the stations.
The watchdog said: "However, the nature of awarding licences for a new type of service in a competitive media market means that it is very unlikely that all channels will succeed.
"This is an inherent feature of the nature of awarding a large number of licences for a new service across very different parts of the UK."
It also added it was hoped that City TV's licence could be moved on without a whole new bidding process.
"We note that the holder of the Birmingham licence has gone into administration. The administrator is looking to transfer the licence to another party that could launch the service (which would require Ofcom’s consent)," the watchdog added.
"If this proves not possible, Ofcom would re-advertise promptly the licence in Birmingham.
"In awarding local TV licences, Ofcom conducts a thorough assessment of the bids to select the one that best meets the requirements set by Parliament, such as meeting the needs of the local area.
"Bidders must demonstrate that they would be financially sustainable and provide evidence that funding is in place, or would be if their application was successful.
"When awarding a licence, Ofcom carefully considers these factors and makes the best decision it can on the available evidence."