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Executive Summary

1.1 Ofcom published a consultation document on the licensing of spectrum in VHF Band III, sub-band 3 on 19 October 2005.

1.2 This proposed to allocate four blocks of spectrum in VHF Band III, sub-band 3 to Terrestrial Digital Audio Broadcasting (DAB) digital radio, under the terms of the Broadcasting Act 1996 (the Broadcasting Act). Three of the blocks would be used for local multiplexes, with the aim of filling in the gaps between existing local multiplexes, so ensuring that every part of the UK would have the opportunity to receive local DAB digital radio services. The fourth block would be used to provide a national DAB digital radio multiplex as Ofcom considered that this represented the optimal use of the spectrum in the best interests of citizens and consumers. The consultation closed on 16 November 2005.

1.3 Following consideration of the responses to the consultation, this statement sets out Ofcom’s final decision on these proposals.

1.4 The responses to the consultation were broadly positive, with many respondents agreeing with Ofcom’s proposals for the allocation of spectrum to local and national DAB multiplexes and to these being licensed under the terms of the Broadcasting Act.

1.5 However, some respondents raised a number of concerns:

1. Options for use of the spectrum: Some respondents argued that Ofcom had not considered all of the options in coming to its recommendations. Ofcom does not accept this criticism and considers that all relevant options for the use of the spectrum have been considered. This issue is addressed in paragraphs 4.4 to 4.9 of this statement.
2. Analytical process: Some respondents also claimed that Ofcom had not conducted a proper analytical process, and in particular that Ofcom had failed to conduct a proper impact assessment. Ofcom does not accept this criticism and considers that it has given due consideration to the likely impact of its proposals. It has also been claimed that Ofcom has failed to consider properly the relevant evidence. Ofcom does not accept this criticism. This issue is addressed in paragraphs 4.10 to 4.46 of this statement.
3. Digital migration path for all existing and planned analogue stations: Some independent stations and smaller radio groups expressed concern at the lack of an obvious route for the migration of all analogue stations to digital, although there were differing views as to what the solution might be – from the use of capacity on DAB to the creation of new platforms such as Digital Radio Mondiale (DRM). Ofcom’s view is that this is an important policy issue, which requires further work during 2006, but that it would not be in the best interests of citizens and consumers to allocate the fourth block of spectrum for further local multiplexes, for several reasons. This issue is addressed in paragraphs 4.47 to 4.58 of this statement.
4. Licensing regime: Some respondents argued that Ofcom should be allocating any spectrum for a national multiplex under the Wireless Telegraphy Act only, without a Broadcasting Act multiplex licence. Some respondents expressed concern about the assignment of capacity that could be used for data services using the Broadcasting Act, on the grounds that this could lead to a distortion of competition compared to access to spectrum for similar services via auction. Ofcom’s view remains that the licensing of local and national multiplexes under the Broadcasting Act is the most effective and appropriate means of securing Ofcom’s policy objectives. Ofcom also considers that the assignment of spectrum under this mechanism is compatible with its duties in relation to competition, and does not in itself imply a distortion of competition. This issue is addressed in paragraphs 4.59 to 4.65 of this statement.
5. Technical standards and platforms: It was also argued by some respondents that the current coding system used for DAB is out of date, and that an alternative coding system, Advanced Audio Coding (AAC), could deliver benefits in terms of capacity. Ofcom considers that any change in technical standards now would raise significant issues in relation to consumer and citizen protection, and the further development of the market for digital radio. Ofcom is not therefore minded to propose at this stage any change in the technical standards included within regulation, though it will keep these standards under review. This issue is addressed in paragraphs 4.81 to 4.91 of this statement.
6. Conduct of consultation process: Some concern was also expressed about the conduct of Ofcom’s consultation process. Ofcom is satisfied that the consultation process has been conducted appropriately and fairly. This issue is addressed in paragraphs 4.97 to 4.105 of this statement.
7. Digital One, the licensee of the current national commercial radio multiplex additionally argued that [redacted for confidentiality reasons] that it would be the “one and only” licensee of the national multiplex for the 12 year initial term of its licence and accordingly Ofcom was precluded as a matter of law from awarding a further national commercial multiplex licence until 2011. Ofcom does not agree [redacted for confidentiality reasons] and has previously concluded that it is not precluded as a matter of law from awarding a further national licence.

1.6 Ofcom’s decision, subject to the outcome of the Regional Radio Conference (RRC) on international spectrum usage and the vacating of the spectrum by existing users, is to allocate four blocks of spectrum in VHF Band III, sub-band 3 to DAB digital radio services:

• one for a further national commercial radio multiplex; and
• three to provide further local radio multiplexes, with the primary objective of extending the coverage of local digital radio services to those areas of the UK that are currently not served.

1.7 Ofcom has also concluded that all of these multiplex licences should be awarded under the terms of the Broadcasting Act.

1.8 The accompanying document, The Future Licensing of DAB Digital Radio, published simultaneously with this statement, sets out for consultation the proposed licensing process, the way that Ofcom proposes to apply the statutory criteria, the proposed local areas to be licensed and the proposed timetable for advertising local and national licences.

The full statement is available below:

• Radio - Licensing Policy for VHF Band III, Sub-band 3 - Statement [pdf]
  Full Print Version
• Erratum
  23|12|2005

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