In other words, it is too expensive to justify, as it stands.
However, if it can attract new speakers of the language, "it would appear to justify the increased expenditure".
The provisional conclusions are due to be published on 21 November with a 28-day consultation process and a final decision in January.
Given the cuts that the BBC is having to find, and that the BBC are forecasting a cost of £25m pa in running costs, it looks like the proposal is dead in the water.
Update 20:45 - I know that everyone working for the Gaelic Digital Channel is desperate to get 'something' ('anything'?) that improves the position of the Gaelic language, and the digital channel was that chance, as far as they are concerned. I am not in any way knocking what they believe in or what they have tried to achieve, or suggesting that they have failed in anything they have done.
I've given it a lot of thought, and I'll admit that I come from the perspective of a monoglot without the full cultural heritage, but I still have a valid view.
I believe that the Gaelic digital channel is a sop designed to fail (or never be delivered) to show that politicians were trying to do something for the language, but where the blame will be diffused across so many quangos and departmental responsibilities that no-one will ever be responsible for the failure to deliver.
Anything less than an S4C equivalent is pointless, and even that may be too late now. Yes, I think the Gaelic language may be doomed and in a death spiral due to inaction by EVERY political party. The ability to direct the debate into a discussion about how small the ghetto for the language should be has been the trick of the civil servants.
One only needs to compare Ireland, where Irish Gaelic is now an official language of the European Union to the situation in Scotland where there is a total absence of any attempt to bring the language into the mainstream by any political party.
In summary: the game is over. Fight a losing battle if you wish - or find some other means to achieve recognition. There are no other options.