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22|12|04

Ofcom publishes its statutory assessments for the proposed merger of Capital and GWR

Ofcom today announces the completion of its own role in the statutory process for the Capital Radio plc and GWR Group plc proposed merger.

The assessment of key competition aspects of the proposed merger has been undertaken by the Office of Fair Trading (OFT). The OFT will announce its conclusions today.

Ofcom has been given a number of specific duties under the Communications Act 2003 and other legislation in relation to media mergers. It is today announcing the outcome of its statutory assessments of the ownership rules in connection with the proposed merger of Capital Radio plc and GWR Group plc.

Change of control

 Section 355 of the Communications Act 2003 requires Ofcom to carry out a review of any local radio licence that undergoes a change of control, in order to ensure that the character of the service, the quality and range of programming and the amount of local programming would not be prejudiced as a result of the change of control.

Ofcom has determined that 30 GWR local analogue radio licences would undergo a change of control as a result of the merger.

• Following statutory change of control reviews of the 30 GWR licences, if the proposed merger proceeds Ofcom intends to vary two GWR licences in order to safeguard local programming:
• GWR Bristol and Bath FM: separate weekday breakfast services are currently provided for each of the Bristol and Bath areas. This provision will be written into the licence to ensure continued provision of these separate services.
• MFM/Buzz Wrexham and Chester FM licence: a separate weekday breakfast service for the Wirral is currently provided , and this provision will be written in to the licence to ensure continued provision of this separate service.

Ownership rules

Ofcom has a duty to apply specific ownership rules that either prohibit certain categories of persons from holding broadcasting licences, or are designed to protect plurality of ownership of the media. These rules are set out in Part 2 of Schedule 2 of the Broadcasting Act 1990, Sch ed ule 14 of the Communications Act 2003 and the Media Ownership (Local Radio and Appointed News Provider) Order 2003.

• Ofcom has concluded that none of these statutory ownership rules would be breached by the proposed merger.
• Specifically, Ofcom has concluded that the specific ownership rules designed to protect plurality in relation to local analogue radio licences, local digital multiplex licences, and local digital sound programme service licences would not be breached if the merger were to go ahead as currently envisaged.

Public interest test

If the Secretary of State for Trade and Industry issues an Intervention Notice, Ofcom is required under Section 61A of the Enterprise Act 2002 to carry out an investigation into the public interest considerations specified in the notice. 

• The Secretary of State has not issued an Intervention Notice with regard to the proposed Capital and GWR merger.  She has the power to issue an Intervention Notice only until the OFT makes a decision on whether or not to refer the merger to the Competition Commission. There will, therefore, be no assessment of any public interest considerations as part of the regulatory scrutiny of this merger.

In relation to competition matters, the outcome of the OFT’s consideration will also be announced today.

The document setting out Ofcom’s conclusions is available at: www.ofcom.org.uk

Ends.

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