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The FM local commercial radio licence for Warwick was awarded on 5 January 2006 to 2Day FM Limited.

Warwick licence award decision

When the Warwick licence was advertised in July, it was stated that, given the relatively 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, it was also stated 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.

Finally, in respect of section 105(d) - the extent to which there is evidence of local demand or support for a proposed service – it was stated that non research-based evidence of local support would be likely to be considered alongside evidence of demand.

It was 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 relation to section 105(a), the committee felt that the backing of a shareholder (CN Group) with extensive and current experience of operating smaller radio stations enhanced the likely ability of 2Day FM to maintain its proposed service. The group’s business plan was considered to demonstrate a good understanding of the local market and of the issues that the new station may face, and the ability to save costs through resource-sharing with nearby stations in common ownership was felt to further enhance the strength of 2Day FM’s financial proposition.

With regard to section 105(b), 2Day FM’s programme proposal s were considered by the committee to be closely aligned with the findings from its research, and thus likely better to be able to cater for local tastes and interests. In particular, it was felt that the commitment to provide local news 24 hours a day as well as two extended news bulletins each weekday should help to cater for the clear demand for local news shown in its research, while it was also considered that the remainder of the speech items which the station will be committed to broadcasting should satisfy the broad demand for local information which appears to exist in the area. Musically, the committee noted that respondents to the research conducted by 2Day FM expressed strongest demand for a broad variety of mainstream chart music (in terms of age) – the commitments included in the group’s Format should help to satisfy this demand, while maximising likely audience appeal which should help it better to maintain its service.

In relation to section 105(c), it was considered that 2Day FM’s commitment to a very high level of local news and other locally-relevant speech content would improve and enhance such provision (in terms of radio) in the Warwick area, while the station's music output is likely to offer some distinctiveness in relation to the two main existing non-BBC local services in the area by sounding less contemporary than that of Mercia FM but more contemporary than that of Classic Gold 1359.

With regard to section 105(d), as indicated above, the findings from the research conducted by 2Day FM provided evidence of a demand among the local community for each of the music and speech elements of its proposed service. The committee also noted that the group was able to submit evidence of support for its application from numerous local businesses and organisations, many of which evidently have a good relationship with CN Group's existing radio stations in the area.

The RLC considered that, in relation to section 314 of the Communications Act 2003, 2Day FM’s programming proposals contained a suitable proportion of local material and locally-made programmes. The station will be entirely locally produced and presented, and its Format includes commitments to deliver a wide range of local material.

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 Warwick licence, can be found at:

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

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 Warwick licence was advertised on 7 July 2005. By the closing-date of 6 October 2005, three applications were received, as follows:

2Day FM Limited
Radio UK Holdings Limited (Silver FM)
Warwick Local Radio Limited

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
Matthew MacIver, Content Board member for Scotland
Pam Giddy, Content Board member
Peter Bury, Director of Strategic Resources
Peter Davies , Director of Radio and Multimedia
Neil Stock, Head of Radio Planning & Licensing
Martin Campbell, Head of Radio Content Team

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 7 November 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 5 January 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 Warwick licence area, 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 are strongly advised to study Ofcom's published guidance on the scoring system which is employed as part of the licensing process, as this indicates the main areas of consideration under each of the statutory criteria of section 105 of the 1990 Broadcasting Act which are taken into account when applications are assessed. This guidance can be found at: http://www.ofcom.org.uk/radio/ifi/rbl/car/lapr/scoring/.
   
3. Applicants are reminded that, as part of their application, they are required to complete a financial template which summarises information from their business model (see Q. 2(c) of the application). This template can be found at: http://www.ofcom.org.uk/radio/ifi/rbl/car/lapr/ftap.xls. It is also a requirement to provide information about any original market research undertaken in tabular format – see Q.6 of the application.
   
4. Applicants are also reminded, again, that applications must be clear, concise and simple in layout and style. In particular, applications must NOT include photographs, graphics and/or pictures (this includes the front cover). A limited number of illustrative charts is acceptable.

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