UPDATE 1-UK's Ofcom to scrap broadcaster airtime rules

LONDON, July 28 (Reuters) - Britain's commercial broadcasters got a boost on Wednesday when media regulator Ofcom said it would scrap rules forcing them to sell all their advertising airtime, which had weighed on prices.

Ofcom said in a statement it would lift the rules ahead of the next television airtime deal in the autumn as part of its drive to remove unnecessary regulation.

British broadcasters have been hit by a downturn in advertising and a proliferation of channels. Being forced to sell all the minutes of airtime also meant they could not limit supply and boost prices.

The rules, which were applied to ITV1 (ITV.L), Channel 4 and Five, also restricted the way broadcasters could sell bundles of advertising across their range of channels.

"Since the rules were introduced, there have been significant developments in the TV sector and a substantial increase in the number of channels," Ofcom said.

"This has led to increasingly fragmented TV audiences and enabled media buyers to purchase airtime across many more channels."

Ofcom said it had also decided not to launch a broader market study of TV advertising.

Shares in ITV were down 0.5 percent after earlier being down 1.5 percent. (Reporting by Kate Holton; Editing by Michael Shields)