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The FM local commercial radio licence for the city of Newry and surrounding area was awarded on 8 June 2006 to Newry and Mourne FM Ltd (Five FM).

Newry licence award decision

When the Newry licence was advertised last December, we stated that, given the small population coverage afforded by the licence, Ofcom would be likely to place particular emphasis on the ability of each applicant to maintain its proposed service for the duration of the licence period (Section 105(a) of the 1990 Broadcasting Act).

As a 'smaller' licence serving a locality which is not the sole focus (in editorial terms) of any existing service, we also said that Ofcom was likely to consider speech content to be more important than music proposals in assessing Section 105(c) – the extent to which each applicant would broaden the range of local commercial radio services available in the area, and that 105(c) might be considered less significant overall than Section 105(b) – the applicants' ability to cater for local tastes and interests.

In respect of Section 105 (d) – the extent to which there is evidence of local demand or support for a proposed service – we said that non research-based evidence of local support would be likely to be considered alongside evidence of demand.

We also noted that this guidance is subject to discretion, and that Ofcom will always consider each of the four statutory criteria when making a licence award.

In considering the applications in relation to Section 105(a), Ofcom's Radio Licensing Committee (RLC) recognised that while Five FM’s business plan was highly ambitious compared to the financial performance of existing UK stations of a similar size, the station’s ownership by two well-established Northern Ireland media owners (the Alpha Newspaper Group and Irish News Ltd) has provided it with an impressive level of funding, enhancing the likely ability of Five FM to maintain its proposed service. Five FM would also be likely to benefit – particularly in terms of sourcing national advertising revenue – from being part of a commonly-owned ‘cluster’ of local stations alongside Six FM in Cookstown and Seven FM in Ballymena. The committee also noted the executive management team’s track-record in operating small-scale commercial radio services in the Republic of Ireland.

With regard to Sections 105 (b) and (c), RLC members felt that the seven-day local news service proposed by Five FM (including a Format promise that local stories will normally comprise at least 50% of these bulletins), plus Format commitments to a raft of local sports coverage and a range of half-hour special interest programmes, was consistent with the group’s stated philosophy of providing distinctive local programming, and would extend choice in the market by significantly improving the availability of Newry-specific news and other kinds of information for listeners in the area. In addition, it was felt that Five FM’s bias towards 90s and 00s music would be likely to differentiate the service from the clearly older music output of Downtown Radio, while the inclusion of some older tracks in its mix, plus specialist country music programming, would provide points of difference from the more contemporary Cool FM.

The committee felt that the evidence of demand or support submitted by Five FM under Section 105(d) was not the strongest part of the group’s application, as certain aspects of its formal market research programme were lacking in quality, but it did commission a particularly comprehensive advertising survey (interviewing some 130 current local advertisers in the area) which helped to demonstrate the potential commercial viability of the proposed service.

The RLC considered that, in relation to Section 314 of the Communications Act 2003, Five FM’s programming proposals contained a suitable proportion of local material and locally-made programmes. The station will be locally produced and presented 24 hours per day (apart from the occasional syndicated/networked programme), and – as previously noted – its Format includes commitments to deliver a range of local material.

The following pages set out the statutory requirements relating to radio licensing, and the licensing process. Further information about these, and detailed information relating to the applications for the Newry licence, can be found at:

http://www.ofcom.org.uk/radio/ifi/rbl/car/

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 Newry licence was advertised on 7 December, 2005. By the closing-date of 8 March 2006, two applications were received, as follows:

Newry and Mourne FM Ltd (Five FM)
Quay 100 Ltd

The membership of Ofcom's Radio Licensing Committee (RLC) for this licence award was as follows:

Tim Suter, Partner, Content and Standards (Chair)
Pam Giddy, Content Board member
Peter Bury, Director of Strategic Resources
Peter Davies, Director of Radio and Multimedia
Martin Campbell , Head of Radio Content Team
Neil Stock , Head of Radio Planning & Licensing

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.

The Radio Licensing Committee had an initial discussion of the applications at its meeting on 11 May 2006. 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 8 June 2006 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 of clarification and/or amplification.

Points for future applicants

1. Applicants for licences in other areas should note that this licence award was made based on the particular characteristics of the Newry market and the applications which were submitted. 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.
2. Applicants should note that the 'Licence Area' sub-section within the 'Format Outline' part of the Format, and all sub-sections of the 'Definitions' part of the Format, must not be changed. This means in particular that applicants must not change the definition of, for example, daytime.

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