Home > Media and Analysts > Speeches and Presentations > 2005 > Oct > Community FM 2005

27|10|05

Speech to the Community FM Conference, 22 October 2005

Kip Meek, Chief Policy Partner

Good morning and thank you. I have two purposes today. First to explain Ofcom’s view of radio including community radio and second to talk about community radio and digital.

Turning to the first of these, as I hope you will be aware, earlier this week we published the document which concludes Phase 2 of our Radio Review.

This Radio Review originally grew out of two requirements upon us: one was to produce a progress report on digital radio for the government; the other was to publish guidelines on localness in commercial radio.

We took the view, however, that neither of these things could be considered in isolation, and that what we ought to do is to consider the radio industry as a whole, and set out how we, as a new regulator, see it developing in the coming years.

The documents published on Wednesday cover quite a wide range of issues, not all of which are likely to be of direct interest to those of you here today.

However, as I said what I want to talk to you about today, which is included in the document, is how we think community radio might fit into radio's future, and whether that future could be all digital.

Last year, prior to publishing the first Radio Review document, we did some research which suggested that radio performs a number of (fairly obvious) functions, including:

providing company and involvement;
contributing to and impacting on mood;
connecting with the outside world on a local, UK-wide and global level in order to keep listeners in touch with unfolding news and events;
providing information on weather, traffic and events;
providing sports coverage;
keeping listeners up-to-date with trends in new music and bands, and;
providing an alternative to other forms of entertainment.

Most importantly, radio is seen as portable and always available to listen to.

However, the research showed that there are also some negative associations with radio:

some listeners believe there is too much advertising;
there is a belief that there is too much repetition in terms of the music played;
there is not always enough interactivity with presenters, and little participation and conversation, and;
some feel that there is too much news and that news items are repeated too regularly on the radio, both locally and nationally.

While our research suggested that the majority of listeners are satisfied with what they listen to on the radio, it is impossible to know whether people would be as satisfied if the radio stations on offer were driven purely by the market, and did not have any of the obligations that current radio stations have. In other words, is the current level of regulatory intervention responsible for the high level of satisfaction? Or, would the satisfaction be there anyway? Are we wasting our time?

Public purposes

To try to get to an answer, we carried out further research in the early part of this year to try to identify the essential purposes and characteristics of radio, and from this to identify what might be the particular public purposes of radio.

In our research, listeners said that radio was important in their lives and, although it was seen as more of a background medium than television, they relied upon radio and expected it to deliver a number of key benefits. These are:

Radio services that are easy to access wherever and whenever listeners want to hear them;
Radio programmes and services of a high quality;
The timely provision of relevant information, including local and UK-wide news, weather and traffic and travel;
A wide variety of music and speech programming;
Radio that provides a sense of community and serves and supports the different communities that make up the UK; and
Radio that delivers social benefits, including cultural and economic benefits.

In general, though, we found that people don’t naturally think of radio as a "public service" – and there was certainly less resonance for the phrase among radio listeners than among television viewers who participated in similar research for Ofcom’s PSB Television Review.

People tended to define "public service" in relation to radio in very narrow terms – public information, free-to-air, and catering for special needs audiences (especially the visually impaired). Such characteristics and obligations tended to be linked exclusively to the BBC. However, despite this limited view of public services, people strongly believed that radio provides considerable benefits to society, including companionship, mood management (stress relief, getting the working populace out of bed in the morning etc) and championing local causes.

At about the same time as our research, the Government’s Green Paper on the Review of the BBC’s Royal Charter was published and identified five broad public purposes which it proposed should apply to all of the BBC’s services (TV, radio and on-line). Being publicly funded, the BBC represents a significant intervention in the radio market, and so the Green Paper’s public purposes are an attempt to define what that intervention should be trying to achieve. In addition to the purposes defined by the Green Paper, Parliament has of course, as all of you will know, also set out a requirement on community radio that it should be primarily for the good of members of the public and be operated in order to deliver social gain. We believe that this requirement to provide social gain should represent a sixth public purpose for radio, and so in our Radio Review we suggest that the public purposes for radio as a whole should be:

Sustaining citizenship and civil society

This is about informing ourselves and others and increasing our understanding of the world through news, information and analysis of current events and ideas.

Promoting education and learning

Stimulating our interest in and knowledge of a full range of subjects and issues through content that is accessible and can encourage either formal or informal learning; and
Providing specialist educational programmes and accompanying material to facilitate learning at all levels and for all ages.

Stimulating creativity and cultural excellence

Enriching the cultural life of the UK through creative excellence in distinctive and original programming;
Fostering creativity and nurturing talent; and
Promoting interest, engagement and participation in cultural activity among new audiences.

Representing the UK, its nations, regions and communities

Reflecting and strengthening our cultural identity through original programming at UK, national and regional level, on occasion bringing audiences together for shared experiences; and
Making us aware of different cultures and alternative viewpoints through content that reflects the lives of other people and communities within the UK.

Bringing the UK to the world and the world to the UK

Making UK audiences aware of international issues and of the different cultures and viewpoints of people living outside the UK; and
Bringing high quality international news coverage to a global audience through radio, TV and new media.

and finally the specifically community radio piece

Providing social gain

Serving individuals who are otherwise unserved by radio;
Facilitating discussion and the expression of opinion;
Providing education and training (other than to employees); and
Enhancing understanding of the target community and strengthening links within it.

So those are the public purposes of radio. But going back to intervention and is it necessary, we also asked two important questions?

What form of intervention, and which part of the radio industry, is best suited to deliver each of the public purposes today?
How is this likely to change in the future?

Our overall approach to intervention in radio is to allow for the market to provide as wide a range of services as possible to serve consumers’ needs. This will allow us to withdraw from regulation wherever we can. But there is a flip side – we have to ensure the provision of those things that society values but which the market may not provide fully.

So our framework for the future regulation of radio has three elements:

First, to enhance choice, diversity and innovation for consumers at the UK, national, regional, local and community levels.
Second, to secure citizens’ interests through the provision of radio designed to meet public purposes.
Third, to do this with as little intervention in the market as possible, consistent with meeting our objectives:

based, where possible, on the range and quality of services provided to consumers, rather than intervening to determine methods of production;
in a way that is as consistent as poss ible across media and across platforms; and
adapting regulation to changes in the market and increasing levels of competition.

What does all this mean in the context of community radio?

community radio enhances choice, diversity and innovation – so it’s at the heart of our strategy
to state the obvious we deliver our contribution by licensing as many community radio stations as we can consistent with the statutory criteria
and we aim to give community radio freedom to innovate .

Turning to the second question: what might the radio landscape look like in 10 to 15 years time?

In the Radio Review, we set out a vision for what the whole UK radio market might look like in ten to fifteen years' time, taking into account the strategic framework that I have just described, and the developments which have already taken place in digital radio and, of course, community radio.

This vision is as follows:

A strong, independent BBC, providing a range of distinctive services which meet all of the public purposes of radio, as set out by the Green Paper on the future of the BBC. We think that BBC radio services should aim to meet these public purposes across the schedule as a whole, including at peak times, but they should operate in a way that is mindful of their effect upon commercial and community radio.
A multitude of community services at a very local level, providing social gain, community involvement and training for every community that wants and can sustain such a service, wherever they are in the UK.
A wide range and diversity of local and regional commercial services, catering for local tastes and interests and providing the public purpose elements of localness which listeners tell us they value – in particular local news and information.
A wide range of UK-wide commercial stations, offering new and innovative services, catering for a broad variety of tastes and interests, providing competition for the BBC and plurality of provision across all major programme genres and at a UK-wide and individual nation level. Just as digital television has evolved to provide channels catering for niche audiences, so should radio. Many of these niche genres are likely to be commercially viable only at a UK-wide level, and some may be provided via subscription.
A range of temporary services licensed as RSLs, for example, catering for the needs of particular events (festivals, sporting events etc) or for particular establishments
All of these services would be supported by multimedia services where viable, offering on-demand services, downloads, archive programming, text and graphical information.
All of these services would be available where and when audiences want to consume them on devices which offer real consumer benefits, whether stand-alone radio devices, integrated multimedia communications devices or the internet.

The role of community radio

So how does community radio fit into this vision?

Well, the first point to make is that we see community radio as a key part of radio's future.

The arrival of this new sector offers the possibility for a wide range of new highly localised stations across the UK, allowing listeners to become much more involved in their radio stations than has previously been possible. They can be used for experimentation and to develop innovative new content, and will provide an important training ground for talent.

Community radio, because of the way the legislation has been drawn-up and because it is non-profit making, is very much based on public purposes. Its primary purpose will be to represent the communities of the UK, particularly in terms of the following purposes and characteristics:

programmes for special interest groups;
providing a sense of identity;
providing for community involvement and participation;
broadcasting community information;
allowing for debate; and
providing programming for different ethnic and religious communities.

In addition, community radio will help to achieve the public purpose of sustaining citizenship and civil society, by providing a range of viewpoints and by contributing to the plurality of broadcasters.

As you all know, community radio is intended to be clearly distinct from commercial broadcasting and the BBC. In order to ensure this, Government has imposed some specific 'characteristics of service' requirements which such stations must adhere to. In particular, they must:

be primarily for the good of members of the public or particular communities and be operated in order to deliver social gain, rather than for commercial reasons;
serve one or more communities (a neighbourhood or people who have one or more interests or characteristics in common);
not be provided in order to make a financial profit, and use any profit produced to support the service or for the social gain of the public or the target community;
offer members of the target community opportunities to participate in the operation and management of the service; and
be accountable to the target community.

Central to the community radio legislation is the concept of social gain - a broad term to encompass the delivery of tangible benefits to communities beyond the simple delivery of broadcast programming. The Community Radio Order contains some specific definitions of social gain, which I have already referred to in the context of what we consider to be the sixth public purpose of radio.

Of course, at the moment, as with all types of radio service, there is a technical limit to the number of new community radio services which can be licensed overall due to the lack of suitable frequencies.

In time, it is possible that changes such as an end to simulcasting of existing radio services on analogue and digital platforms could free-up spectrum that will create more space for new community radio stations. It is to this issue that I now wish to turn.

Digital migration for community radio

We have already made clear that we are not, at this stage, proposing a digital switch-over plan for radio akin to that proposed for television.

However, there are a number of reasons why a digital migration path for all existing and planned analogue stations, including community radio, may be desirable in the long run.

Digital radio offers consumers a number of benefits, including more choice, better reception, new functionality (such as the ability to pause and rewind live radio) and new multimedia and interactive services. More choice is made possible by the attributes of the digital platforms, but for the last four of these benefits (e.g. rewinding, etc) to be of most use to consumers, the benefits need to apply to all of the stations that consumers listen to now together with any new stations. So it may be desirable for all existing and planned stations, BBC, commercial and community, to be available on digital platforms.

From the broadcasters’ point of view there are also benefits of being able to broadcast on digital radio; digital broadcasting allows each station to offer new data and multimedia services to listeners and gain access to new revenue streams, such as downloading.

Many of those stations not currently available on DAB are worried that as digital listening increases, listeners will be unwilling to turn back to analogue radio, even where the option exists on their receiver. They fear that stations left broadcasting only on FM will face a slow decline, similar to that seen by some AM stations today (although of course not all AM stations are in decline).

However, it is important to note that switching off analogue radio broadcasting could also have significant costs. Therefore, we would need to carry out a full cost-benefit analysis before making any recommendation to Government.

The digital options for small commercial and community stations

As yet, however, there is no obvious route for smaller analogue commercial stations or community stations to provide their services digitally in a way which is economic for them, even if spectrum was available. The main problem arises because of the technical characteristics of DAB, which broadcasts using multiplexes. This means that each frequency can carry up to ten stereo services. Each of the services on the multiplex will use a number of transmitters on the same frequency to cover exactly the same area. It would not make sense, financially or editorially, for a small scale commercial or community station currently broadcasting in analogue to only a part of a multiplex licence area to broadcast in digital to the whole of the area.

DAB is not the only digital radio technology, though.

Digital Radio Mondiale, or DRM, has been developed primarily as a digital standard for the short-wave, long-wave and medium wave bands, and does not currently offer sound quality comparable to DAB in those bands, due to bandwidth constraints. However, DRM already offers a significant improvement in sound quality and signal robustness over analogue AM services, and DRM has a major advantage over DAB in that it does not operate using a multiplex system – each frequency only carries one service, and so it can be tailored more to the coverage requirements of individual broadcasters.

Since the start of this year, the broadcaster RTL has launched national DRM services in France and Germany, and has re-launched Radio Luxembourg aimed at the UK using DRM. Radios which are able to receive both DAB and DRM signals are expected to be available by the end of this year.

Work is also currently underway to adapt DRM for use in VHF Band II, which is the part of the spectrum currently used for FM services. This would offer better sound quality than DRM using medium wave frequencies, and would have similar coverage characteristics to existing FM services.

While it is still in the early stages of development and widespread deployment is some years off, DRM on both medium wave and VHF Band II may offer a digital migration path to smaller and community stations. It may also offer a digital migration path for those areas where DAB local multiplexes are not commercially viable. HD-Radio, which is the system used for digital radio in America, is another possibility, but it is not currently approved for use in Europe.

Of course, VHF Band II is currently almost fully utilised by existing FM stations. Therefore, a digital migration path using DRM or HD-Radio would require at least some of those FM stations to vacate the band before any digital allocations in VHF Band II could be made. Any such change is many years away and could not happen until a significant proportion of radio sets could receive DAB services (as well as DRM or HD-Radio). As I said before, a full cost-benefit analysis and public consultation would need to be carried out before any decision is taken.

In the meantime, we welcome the development of dual DAB/DRM sets, as this should offer listeners greater flexibility and may help to bring down the price of receivers if DAB/DRM becomes the European way forward for digital radio.

For the time being, we will monitor the market for future developments, and we will address these important questions when we next review digital radio in three years time.

Further FM licensing and the case for an end to simulcasting

We are currently licensing the final batch of around 30 FM commercial stations, and we have now awarded 48 community radio licences with more to come. However, remaining spectrum in VHF Band II, currently used for FM radio, is extremely scarce. This means that we are unable to be likely to provide FM spectrum for all of those community and commercial stations which would like to broadcast. DAB might be an answer for some, but in order to allow for the development of further community stations, and the opportunity for the smaller commercial stations to transfer to digital broadcasting, there may be a case for freeing-up some existing spectrum from other radio uses.

The current practice of simulcasting stations on FM and DAB digital radio is required because many listeners are not yet equipped to receive DAB, and DAB coverage is not yet complete. However, this practice does not necessarily represent the optimal use of the spectrum, which is another one of the things that Ofcom is required to secure.

So, at some stage, when the vast majority of listeners are equipped to receive digital radio and coverage is complete, it may make sense to end analogue/digital simulcasting.

This would free up a considerable amount of spectrum to allow for new uses which could include more community stations and further new stations.

But that's the future.

Until we get there, we will continue to license new community radio stations using the spectrum that we do have available, and later on Soo and Lawrie will be providing with you with feedback on the application process as we see it so far.

Thank you for listening.