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The FM local commercial radio licence for Swansea was awarded on 7 November 2005 to Swansea Bay Radio Limited.

Swansea licence award decision

When the Swansea licence was advertised in May, Ofcom said that, given the characteristics of the area, it felt unable to indicate whether any one of the four statutory licensing criteria (see under ‘Specific local licence award criteria’ below) would be likely to be regarded as of particular significance. However, it was stated that, in respect of criterion (d) – the extent to which there is evidence of local demand or support for a proposed service, Ofcom would be 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.

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

This licence attracted three applications. Two of these, from SA FM and Swansea Bay Radio, offered full service programming proposals; the other, from Diamond 102 FM, offered a classic rock service with local news and a comparatively small speech commitment. The Radio Licensing Committee ( RLC) considered Swansea Bay Radio to be the strongest applicant on a balance of the criteria.

It was noted by RLC members that, taken together, the local commercial radio services available in Swansea provide a mix of mainstream music and speech, of either local or regional relevance, that has a broad appeal to listeners aged between 15 and 64. The committee also noted that Swansea Sound broadcasts a relatively contemporary mix of classic hits, rather than the slightly older gold music that features on many local medium wave stations, and a higher level of local speech than is required by its Format.

In considering the applications in relation to section 105(a), the committee noted the success of neighbouring services owned by the investors in Swansea Bay Radio. The RLC also recognised that Swansea Bay Radio’s ownership would enable it to form a new local cluster, and thereby benefit from synergies in terms of both programming and sales. The business plan was considered to include appropriate audience expectations and cost assumptions, as well as realistic revenue projections. Moreover, the committee welcomed the fact that this group showed a clear understanding of the local marketplace and has previous experience of competing against the existing local commercial and BBC services.

In relation to sections 105 (b) and (c), RLC members felt that Swansea Bay Radio would broaden choice compared to the existing commercial services through its specific Format commitments, and would provide a service for which there was strong evidence of demand. In this respect, the committee noted in particular the promise to provide 24-hour local news throughout the week, the emphasis on the provision of ‘gold’ and ‘easy listening’ genres, the pledge that at least 50% of daytime tracks must be 25 years or older, and the commitment that no more than 20% of Swansea Bay Radio’s entire music output would be drawn from the last five years. The proposed mix of music and specific speech commitments proved popular in the group’s research, especially among the core target of 45 to 64 year olds. The committee also noted that the weekly ‘nostalgia’ show included in the Format had received a positive response among the potential audience.

With regard to section 105(d) Swansea Bay Radio was felt to have conducted reasonable and robust research with comprehensive local market analysis, the findings from which underpinned its proposals. The committee also made particular note of the fact that the group had illustrated support for its proposed service among local advertisers.

The RLC considered that, in relation to Section 314 of the Communications Act 2003, Swansea Bay Radio’s programming proposals contained a suitable proportion of local material and locally-made programmes. The station will be locally-produced and presented 24 hours a day , with the exception of up to four hours a week of networked or syndicated programming. Its Format includes commitments to deliver a wide range of local material including Welsh language items and extensive provision of live local news.

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

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

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 Swansea licence was advertised on 4 May 2005. By the closing-date of 4 August 2005, three applications were received, as follows:

Radio UK Holdings Ltd. (Diamond 102 FM)
Swansea Local Radio Ltd. (SA FM)
Swansea Bay Radio Ltd.

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

Ian Hargreaves, Ofcom Board member (Chair)
Kip Meek, Chief Policy Partner (Co-Chair)
Matthew MacIver, Content Board member for Scotland
Pam Giddy, Content Board member
Sue Balsom, Content Board member for Wales
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 3 October 2005. 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 7 November 2005 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 Swansea 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.

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