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Executive summary

1.1 Radio is in transition. Throughout its history, it has evolved and adapted to face new challenges, and that transition continues today, at a rapid pace. Ofcom’s work reflects these changes, with this statement forming part of our on-going review of the radio sector. Our work will need to continue, and will this year also include contributions to the Digital Radio Working Group and the Convergence Think Tank. The conclusions that follow should be viewed in the light of this transition, helping to ensure radio’s continued popularity and success, in the interest of citizens and consumers.

1.2 In April 2007, Ofcom published its consultation document, The Future of Radio: the future of FM and AM services and the alignment of analogue and digital regulation.

1.3 The initial consultation covered four main areas:

• Content regulation of local analogue commercial radio services;
• Commercial radio ownership rules;
• The future use of FM and AM spectrum; and
• The regulatory framework for community radio.

1.4 We received over 140 responses, and in November 2007, we published our policy statement, The Future of Radio: the next phase. In the light of the responses, we revised our proposals in two areas:

• Localness guidance for analogue (i.e. FM and AM) commercial radio
• Stereo and mono broadcasting on DAB

1.5 These were the subject of a further short consultation, where we welcomed comments providing additional evidence or arguments not already submitted in response to the first consultation.

1.6 By the closing date, we received 43 responses to this further consultation. Most broadly supported the policy statement’s approach, although some areas remained contentious.

Localness guidance for commercial radio

1.7 We proposed revised guidance to include that, in general, each FM station should produce a minimum of ten hours a day of locally-made programming during weekday daytimes (06.00 – 19.00), including breakfast, and a minimum of four hours a day of locally-made programming at weekends in daytime (06.00 – 19.00). In addition, we said that stations would be able to apply for co-location and programme sharing on a sub-regional basis, with requests from stations covering a population of fewer than 250,000 adults (aged 15+) likely to be considered more favourably than requests from stations with greater population coverage.

1.8 We also proposed revised guidance that AM stations should produce four hours a day of locally-made programming during daytime, and that at least ten daytime hours should be produced within the nation where the station is based.

1.9 We noted that no station would be expected to produce more locally-made programming than at present, and finally we stated that no licensee would be granted a request to change or simplify its Format within two years of its launch.

1.10 While there was general support for these proposals, including from a number of MPs, the responses focused in particular on three areas: our proposals regarding the minimum amount of locally-made programming that stations should provide; our proposed population threshold in respect of requests for co-location and programme sharing, and; our proposed policy not to allow a station to apply for a Format change within its first two years on air.

Amount of locally-made programming

1.11 Commercial radio industry respondents broadly considered that the amount of locally-made programming should either not be regulated at all, or should be part of a co-regulatory approach. However, these respondents added that if Ofcom considered regulation was required, for FM stations this should be limited to seven hours on weekdays to allow stations maximum flexibility. Conversely, some individual respondents, and groups such as the Campaign for Press and Broadcasting Freedom, the NUJ and Estuary Media, felt that the proposals went too far in removing local content requirements.

1.12 We fully considered the responses. On locally-made programming, we considered that in Ofcom’s research, a majority of respondents chose the option as close to the status quo as possible. We recognise stations should have the flexibility to offer a networked show within daytime, but to go further than this would risk stations becoming national services with local opt-outs.

Co-location and programme sharing

1.13 Industry respondents also felt that the general maximum population coverage threshold of 250,000 adults, whereby requests for co-location and programme sharing from stations with greater population coverage were likely to be approved only in exceptional circumstances, did not reflect that medium-sized stations were also facing financial challenges, and proposed that a maximum of 400,000 or 500,000 adults would be more appropriate. However, other respondents considered that a general policy of permitting larger stations to co-locate and share programmes risked losing bespoke local programming in smaller areas where local services were highly valued.

1.14 We can see no compelling reason to increase the population coverage threshold relating to co-location and programme sharing requests. Figures provided by GCap in response to the consultation suggest that a majority of stations with a coverage area containing between 250,000 and 500,000 adults are profitable. Furthermore, we believe that increasing the threshold to this level would be out of step with listener expectations, as Ofcom would be unwilling to permit stations in significant markets such as Ayr, Swansea, Plymouth, Ipswich and York to reduce the amount of locally-made programmes they provide to just four hours each day.

Format changes for new stations

1.15 Industry respondents considered that the existing policy under which newly-launched radio stations are in general not permitted to apply for a change to their Format within their first two years on air was unfair to new services operating in markets where longer-established services would be able to request such a change, and also would have a simplified Format (in line with the policy outlined in The Future of Radio: the next phase). They suggested instead that, if Ofcom wished to prevent Format changes within a specified period, this period should be two years from the time that a successful applicant submits its licence application rather than two years from when the station launches. Given that successful applicants are permitted two years after being awarded a licence within which to launch their service, such a policy would effectively allow new stations to change their Formats from launch. Other respondents supported Ofcom's proposal; they stated that allowing Format changes during a station's first two years on air would undermine the criteria used to award the licence, and expressed the view that applicants should not effectively be allowed a “second chance”.

1.16 Our current Format change policy states that as a general rule, “no format changes will be permitted in the first two years after a station is launched and, in the period subsequent to that and up to five years after launch, only changes which do not substantially alter the station’s character will be permitted.”

1.17 We remain of the opinion that removing the general policy of not allowing Format changes within two years of a station’s launch would undermine the basis of a licence award. However, we note that this has the potential effect of preventing co-location (which represents a Format change) for stations with a population coverage under 250,000, and incurring increased costs (such as those for premises) for the smallest stations for their first two years before they are likely to have a request for co-location fully considered.

Conclusion

1.18 The revised localness guidance, incorporating the proposals regarding recommended minimum amounts of locally-made programming that stations should produce and the population threshold relating to co-location and programme-sharing requests as set out in the consultation document, will come into effect immediately.

1.19 We have slightly amended our existing Format change policy[^(-1-)], such that any station will be permitted to submit a request for co-location (i.e. including stations within their first two years on air). As a matter of policy, requests from stations with population coverage greater than 250,000 adults (aged 15+) are likely to be approved only in exceptional circumstances.

1.20 To coincide with publication of this statement, we are writing to each licensee regarding the policy of simplifying Formats outlined in The Future of Radio: the next phase, and also inviting requests for Format changes in accordance with the guidance outlined in this document.

Stereo and mono broadcasting on DAB

1.21 In the consultation document we proposed that the audio characteristics (e.g. stereo or mono) of a digital sound programme service (i.e. a radio station provided on a DAB multiplex) should be considered as an essential aspect of the character of the service, and as such requests for changes to these characteristics would fall to be regulated by Ofcom under the terms of section 54(6A) and (6B) of the Broadcasting Act 1996. This was a change to our previous policy proposal in this area, upon which we had consulted in the original The Future of Radio consultation document, and thus we sought views on the new proposal.

1.22 Some non-industry respondents again expressed their concern at any moves by DAB multiplex operators to reduce sound quality on DAB, which they considered should be at least equal to FM stereo. Meanwhile, respondents from the commercial radio industry continued to oppose any regulation of stereo and mono broadcasting on DAB at all, considering that this should be entirely a matter for broadcasters.

1.23 Ofcom believes that it is appropriate to intervene in this area in the interests of listeners and in light of Ofcom’s duty in section 3(2) of the Communications Act 2003 to secure the availability throughout the UK of a wide range of high quality radio services calculated to appeal to a variety of tastes and interests.

1.24 There can be many reasons why a multiplex operator may request a change in the audio characteristics of an individual programme service (whether the change is from stereo to mono, or from mono to stereo), and Ofcom fully appreciates that multiplex operators should have the flexibility to vary bandwidth over limited periods to reflect short-term programming priorities. Our proposed policy was not intended to constrain such changes.

1.25 Rather, our policy is intended to be a backstop to ensure that multiplex operators do not seek to unacceptably diminish the range and variety of the services that they broadcast by changing the audio characteristics of a radio service in order that freed-up capacity can be allocated to services which, in our view, would not be in the best interests of listeners. Examples of such services would be those aimed at a closed user group (i.e. not available to the general public) and where Ofcom judges this would not be in the overall public interest.

Conclusion

1.26 Having considered the responses to this consultation and the responses on this issue to the April 2007 The Future of Radio consultation, our view remains that regulatory intervention in this area is appropriate in some circumstances. With immediate effect, we will consider requests to change the audio characteristics of a digital sound programme service in accordance with the statutory criteria in sections 54(6A) and (6B) of the Broadcasting Act 1996. For those stations that propose to switch from stereo to mono on a regular basis, we will agree in advance the general principals of when such changes would be appropriate.

1.27 As a matter of general policy, Ofcom is likely to refuse a request for a change in audio characteristics only in cases where the capacity freed-up by the change is to be allocated to services which, in our view, would not be in the best interests of citizens and consumers. Such an example may be where a multiplex using its full capacity for stereo radio services proposes to reduce these radio services to mono, in order to allocate the permitted 30% data capacity to provide a closed user group service. We believe that such a move would generally (in respect of a national radio licence) unacceptably diminish the capacity of the programme services provided under that licence to appeal to a variety of tastes and interests, or would generally (in respect of a local radio licence) unacceptably narrow the range of programmes available by way of digital sound programme services in the area.

1.28 In view of the concerns expressed by some stakeholders, Ofcom will review this policy after twelve months.

Footnotes:

1.-Paragraphs 2.38 - 2.46, Radio – Preparing for the Future (Phase 2) statement, Ofcom, 15 February 2006 : http://www.ofcom.org.uk/consult/condocs/radio_reviewp2/statement

The full document is available below

• The Future of Radio - Localness on analogue commercial radio and stereo and mono broadcasting on DAB [pdf]
  Full Print Version

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