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The FM local commercial radio licence for the city of Edinburgh and the area surrounding the Firth of Forth was awarded to Dunedin FM on 16 December 2004. The membership of Ofcom's Radio Licensing Committee (RLC) for this licence award was as follows:

Ian Hargreaves, Ofcom Board member (Chair)
Kip Meek, Senior Partner, Competition & Content (Co-chair)
Peter Bury, Director of Strategic Resources
Martin Campbell, Head of Content & Standards Radio Team
Peter Davies, Head of Market Intelligence
Pam Giddy, Content Board member
Matthew MacIver, Content Board member for Scotland
Neil Stock, Head of Radio Planning & Licensing

Statutory requirements relating to radio licensing

In carrying out all of its functions, Ofcom is required to have regard to the general duties set out in section 3 of the Communications Act 2003. In addition, under section 85(2)(b) of the Broadcasting Act 1990, it is the duty of Ofcom to do all that it can to secure the provision within the UK of a range and diversity of local radio services.

'Localness'

In carrying out its functions in relation to local commercial radio services specifically, Ofcom is required (under section 314 of the Communications Act 2003) to act in the manner that it considers is best calculated to secure:

• that programmes consisting of or including local material are included in such services but, in the case of each such service, only if and to the extent (if any) that Ofcom considers appropriate in that case; and
• that, where such programmes are included in such a service, what appears to Ofcom to be a suitable proportion of them consists of locally-made programmes.

For the purposes of the licensing process, Ofcom does not consider it appropriate to prescribe an amount of local material or a proportion of locally-made programming that new services should contain, as such matters may well vary greatly between different types of service. Rather, it is for applicants to set out in their application the amount of local material and the proportion of locally-made programming they propose to provide, supported, as appropriate, by evidence of demand or support for such proposals. Ofcom will then consider on the basis of the application whether the amount of local material included is appropriate, and whether the proportion of locally-made programming is suitable, for that particular service proposal.

Specific local licence award criteria

In considering the applications it receives for local commercial radio licences, Ofcom is required to have regard to each of the statutory criteria set out in section 105 of the Broadcasting Act 1990. These are as follows:

1. the ability of each of the applicants for the licence to maintain, throughout the period for which the licence would be in force, the service which he proposes to provide;
2. the extent to which any such proposed service would cater for the tastes and interests of persons living in the area or locality for which the service would be provided, and, where it is proposed to cater for any particular tastes and interests of such persons, the extent to which the service would cater for those tastes and interests;
3. the extent to which any such proposed service would broaden the range of programmes available by way of local services to persons living in the area or locality for which it would be provided, and, in particular, the extent to which the service would cater for tastes and interests different from those already catered for by local services provided for that area or locality; and
4. the extent to which there is evidence that, amongst persons living in that area or locality, there is a demand for, or support for, the provision of the proposed service.

The legislation does not rate these requirements in order of priority, but it may be that Ofcom will regard one or more of the criteria as being particularly important in view of the characteristics of the licence to be awarded and the applications for it.

Process for assessment of applications

The Edinburgh licence was advertised on 24 June 2004. By the closing-date of 23 September 2004, twelve applications were received, as follows:

• The Arrow ( Edinburgh) Ltd.
• Dunedin FM Ltd.
• Edinburgh City Beat Ltd.
• Edinburgh Local Radio Ltd. (The Rock)
• Edinburgh Radio Ltd. (Castle FM)
• 4 Life FM Ltd.
• Real Radio Ltd. (Smooth FM)
• Red FM Ltd.
• Saga Radio ( Scotland) Ltd.
• Scottish Radio Holdings plc ( Forth 3)
• Time FM (Edinburgh) Ltd.
• Virgin Radio Classic Rock ( Edinburgh) Ltd.

All twelve applications proposed a programme service aimed at older listeners (although the definition of 'older' varied widely), and could be divided very broadly into three main types of format – news/talk (Dunedin FM, Forth 3); easy listening (4Life FM, Castle FM, Saga FM, Smooth FM, Time FM), and; rock (The Arrow, Citybeat, Red 107, The Rock, Virgin Classic Rock), although, as with the defined target audiences, the exact nature of the proposals varied widely.

The applications were circulated among all members of the RLC as well as among relevant Ofcom colleagues. Copies of the non-confidential sections of the applications were made available for public scrutiny on the Ofcom website, and public comment on the local radio needs of listeners in the area, and the type of programme service required, was invited both at the time of the licence advertisement and on the day after the applications were received. The Radio Licensing Committee took all replies into account when reaching its decision.

Ofcom noted that some of the applications were over 60 pages long, not including appendices, and included lengthy responses to certain questions and a large number of pictures and/or illustrations. This is contrary to the published guidance for the submission of applications, which states that applications should be clear, concise and simple in layout and style, and structured in accordance with the outline provided. Although this was not a factor in the licence award decision, Ofcom would like to re-emphasise that applications should comprise only responses to the specific questions asked, and should be in accordance with the published guidance as regards their format.

The Radio Licensing Committee had an initial discussion of the applications at its meeting on 21 October 2004. This comprised an initial presentation by a member of Ofcom's Radio Planning & Licensing team, summarising the proposals put forward by each applicant as they relate to the statutory criteria, followed by an opportunity for the RLC members to highlight any questions of clarification and/or amplification they wished to be put to the applicants.

Shortly after this meeting, each applicant was invited to respond, within a two-week period, to written questions of clarification and/or amplification on aspects of their proposals. The non-confidential questions and responses were subsequently made available for public scrutiny on the Ofcom website.

In line with Ofcom's published procedures, each application was awarded a score (of between 0 and 10) for each of the four statutory criteria contained in section 105 of the Broadcasting Act 1990. These scores provided an indicative picture of the perceived strengths and weaknesses of each application, and were used for guidance only. A summary of the scores was presented to the RLC at its 16 December meeting, as part of a paper which summarised the issues of relevance for each application under each of the statutory criteria. The information included in this paper was drawn both from the applications and the subsequent responses to questions.

Key factors in licence award decision

When the Edinburgh licence was advertised, it was stated that, given the number and type of services already available in the area, Ofcom would be likely to place particular importance on criterion (c) – the extent to which a proposed service would broaden the range of programmes available by way of local (commercial) radio services in the area, and would cater for tastes and interests different from those already catered for – when it came to consider the applications it received for this licence. It was also stated that in respect of criterion (d) – the extent to which there is evidence of local demand or support for a proposed service – Ofcom was likely to attach greater weight to robust and meaningful evidence of demand as demonstrated by findings from research undertaken in the licence area and, if appropriate, detailed analysis of the existing market, than to evidence of local support as demonstrated by letters from potential listeners and/or advertisers.

This licence attracted a large number of high quality applications and, as a result, the RLC had a lengthy and comprehensive discussion before reaching its decision for this licence award.

As was suggested in the guidance published at the time of the licence advertisement, the RLC considered it appropriate to place particular importance on section 105(c) of the Broadcasting Act 1990 when considering the applications for this licence. In this context, the RLC considered that the application from Dunedin FM offered a programme service which would provide a greater broadening of choice in the Edinburgh local commercial radio market than would the other proposed formats, and would best be able to cater for tastes and interests different from those already catered for by existing local commercial radio services.

Having regard to section 105(a), the RLC recognised that while a speech-based service potentially represented a greater commercial risk than some of the formats proposed by other applicants, Edinburgh's status as a thriving capital city with a large and growing older population, and the experience of The Wireless Group in operating a national commercial speech-based service, gave the Committee confidence that Dunedin FM might well be able to make a success of a format which has the capacity to broaden listener choice to a significant extent.

Having regard to section 105(b), it was considered that the proposed Format, which will form part of Dunedin FM's licence, would be workable in practice, and represented an appropriate reflection of the applicant's stated programming philosophy and the evidence of demand demonstrated by its research.

Having regard to section 105(d), it was considered that the research undertaken by Dunedin FM demonstrated evidence that there is a demand in the licence area for the type of service proposed.

Having regard to section 314 of the Communications Act 2003, the RLC considered that the amount of local material and proportion of locally-made programming proposed by Dunedin FM was appropriate for the type of service, and reflected the demand shown in its research.

This licence award was made based on the particular characteristics of the Edinburgh market and the applications which were submitted. Although criterion 105(c) was accorded significant weight on this occasion, each licence award will be made on an individual basis, with regard to the factors which, in the view of Ofcom, are particularly relevant to that case. Where possible, the likely weight accorded to each of the statutory criteria will be signalled as part of each licence advertisement.

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