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A national radio multiplex licence was awarded on 5 July 2007 to 4 Digital Group Ltd.

Licence award decision

Of the two applications submitted for this licence, Ofcom’s Radio Licensing Committee (RLC) considered that, taking full account of the matters specified in section 47 of the Broadcasting Act 1996, including the representations made in respect of the applications, the proposals put forward by 4 Digital Group Ltd. (4DG), when taken as a whole, were best calculated to promote the development of digital sound broadcasting in the UK (other than by satellite).

In particular, the RLC felt that the shareholders in 4DG, which include significant media companies for whom this national radio multiplex service will represent their first substantial investment in radio (e.g. Channel 4 and BSkyB) alongside experienced broadcast radio operators (e.g. Emap, Chrysalis), are able to offer a breadth of marketing and cross-promotional opportunities and resources through their existing portfolios of services and brands which should help to give DAB digital radio a strong boost at this important time for the platform. The Committee also noted that 4DG had developed partnerships with, among others, receiver manufacturers, retailers and the BBC, and felt that these relationships would assist in the promotion of DAB digital radio (section 47(2)(e)).

In relation to section 47(2)(c), the Committee was persuaded by 4DG’s proposals to establish and maintain its proposed service, especially given the enhanced commitment to the success of the radio multiplex service likely to result from the involvement of some of the proposed service providers as shareholders. It was also noted that the fact that 4DG had signed commitments from all of its proposed service providers put the company in a strong position to meet its own proposed timetable for launching the radio multiplex service (section 47(2)(b)), as well as providing enhanced security of income to improve the likely viability of the service.

The Committee considered that 4DG’s digital sound programme services proposals appealed to a variety of tastes and interests (section 47(2)(d)). In this context and in accordance with guidance set out in Ofcom’s advertisement for the licence published on 1 December 2006, the Committee considered that the bouquet of digital sound programme services proposed by 4DG taken as a whole was distinct from the digital sound programme services available by way of the existing national radio multiplex service. It was noted in addition that services such as the proposed “contemporary public service speech” and “youthful interactive entertainment” channels (Channel 4 Radio and E4 Radio respectively) would be likely to provide strong competition for the BBC, and the Committee especially welcomed the prospective return to a national radio platform of a rolling news service (Sky News Radio) and new national services designed to appeal to Britain’s varied communities of Asian origin (Sunrise Radio UK) and to children (Radio Disney). In light of the declining level of radio listening among younger listeners, the success of the E4 brand in appealing to a young audience was also noted.

In relation to sections 47(2)(a) and (b), 4DG proposes to launch its service by July 2008 using a network of 174 transmitters. Ofcom estimates that this network of transmitters will provide 'outdoor coverage' (e.g. to in-car and mobile receivers) of 88% of the UK adult (aged 15+) population, and higher strength 'indoor coverage' (e.g. to portable kitchen radios) of 79% of the UK adult population. When analogue television services in France and Ireland, which are using the same frequency as that which will be used for this new national radio multiplex service, cease to be provided some time between now and June 2015, 4DG proposes to increase its coverage to 89% of UK adults at an ‘outdoor’ signal strength and 82% of UK adults at an ‘indoor’ level of robustness. The Committee noted that, as well as allowing for reception of the service on hand-held devices (e.g. mobile phones) in urban areas, the relative density of 4DG’s proposed transmitter network also will enable it to be very resilient against incoming interference from services in neighbouring countries using the same or nearby frequencies.

The RLC agreed that the following commitments should be included as conditions of 4DG’s licence when granted:

• The implementation by July 2008 of the applicant’s initial technical plan (or of a network of transmitter sites and transmission parameters offering equivalent coverage), and the implementation by June 2015, or earlier if international agreement is reached, of the applicant’s final technical plan (or of a network of transmitters and transmission parameters offering equivalent coverage);
• The level of marketing expenditure set out in the application, the implementation of the marketing and promotional campaigns detailed in the application, the implementation of a strategy to promote DAB digital radio in liaison with the BBC and any other interested stakeholders, and ongoing engagement with radio device manufacturers and retailers to promote the production and sale of DAB-enabled devices.
• The provision of eight linear national digital sound programme services and the ‘podcast’ service from the launch of the multiplex service, with the ‘contemporary public service speech’ and ‘intelligent contemporary adult’ services to commence within one year of the launch of the multiplex service;
• The provision of the national digital sound programme services as proposed in the application (and summarised below) and any digital additional services and television licensable content services:

Youthful interactive entertainment	E4 Radio	(provider: Channel 4 Radio)
Contemporary public service speech	Channel 4 Radio	(provider: Channel 4 Radio)
Intelligent contemporary adult	Pure4	(provider: Channel 4 Radio)
News, views and entertainment	Talk Radio	(provider: UTV Radio)
Female AC, celebrity and lifestyle	Closer	(provider: Emap Digital Radio)
Rolling news	Sky News Radio	(provider: Sky News Radio)
Asian	Sunrise Radio UK	(provider: Sunrise Radio)
Female-friendly pop with attitude	Virgin Radio Viva	(provider: SMG)
Adult album alternative	Original	(provider: CanWest)
Children’s service	Radio Disney	(provider: Disney)
Varied	Podcast service	(provider: various)

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

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

Statutory requirements relating to national radio multiplex 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.

Specific national radio multiplex licence award criteria

In considering the applications it receives for a national radio multiplex licence, Ofcom is required (under section 47 of the Broadcasting Act 1996) to have regard to the extent to which the applicants’ proposals would be calculated to promote the development of digital sound broadcasting in the UK (other than by satellite), taking into account any representations made in respect of the licence applications and the following matters, namely:

1. the extent of the coverage area proposed to be achieved by the applicant
2. the timetables proposed by the applicant for achieving the stated coverage (i.e. transmission roll-out) and for the commencement of broadcasting of the digital sound programme services proposed;
3. the ability of the applicant to establish the proposed service and to maintain it throughout the period for which the licence would be in force;
4. the capacity of the digital sound programme services proposed to be included in the service to appeal to a variety of tastes and interests;
5. any proposals by the applicant for promoting or assisting the acquisition of equipment capable of receiving the service; and
6. whether, in contracting or offering to contract with persons providing digital sound programme services, television licensable content services or digital additional services, the applicant has acted in a manner calculated to ensure fair and effective competition in the provision of those services.

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 national radio multiplex licence was advertised on 1 December 2006. By the closing-date of 28 March 2007, two applications were received, as follows:

4 Digital Group Ltd
National Grid Wireless Ltd

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

Philip Graf, Ofcom Deputy Chairman (Chair)
Peter Bury, Director of Spectrum Policy
Martin Campbell, Chief Advisor, Radio
Lord Currie, Chairman, Ofcom
Peter Davies, Director of Radio and Convergent Media
Pam Giddy, Content Board member
Ed Richards, Chief Executive, Ofcom
Joyce Taylor, Content Board member

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 representations on the applications were invited on the day after the applications were received. The RLC took all representations into account when reaching its decision.

Each applicant was then 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.

A paper which summarised the issues of relevance for each application under each of the statutory criteria was presented to the RLC at its 5 July 2007 meeting. The information included in this paper was drawn both from the applications and the subsequent responses to questions of clarification and/or amplification.

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