LOCAL DIGITAL RADIO MULTIPLEX SERVICE:

BIRMINGHAM ASSESSMENT OF LICENCE AWARD

The local digital radio multiplex service licence for Birmingham was awarded to CE Digital Ltd on Thursday 6 May 1999, to run for twelve years from the date the service commences broadcasting.

Applications were invited on 20 November 1998. By the closing date of 16 March 1999, one application was received, from CE Digital Ltd, an equal joint venture between Emap Radio Ltd and Capital Radio plc.

Copies of the non-confidential section of the application were made available for public inspection at the Authority’s office in London and at Birmingham Central Library. A notice was issued on 16 March 1999 inviting public comments on the application. Under the terms of section 51(2) Broadcasting Act 1996, when considering whether, or to whom, to award a local digital radio multiplex licence, the Authority must have regard to the following specific matters:

    1. the extent of the coverage area as proposed by the applicant;
    2. the timetable relating to achievement of the proposed coverage area and the start of broadcast services;
    3. the ability of the applicant to establish the proposed service and to maintain it throughout the period for which the licence will be in force;
    4. the extent to which the digital programme services proposed to be included in the service would cater for the tastes and interests of persons living in the area and, where it is proposed to cater for particular tastes and interests, the extent to which those services would in fact cater for those tastes and interests;
    5. the extent to which any proposed digital sound programme services would broaden the range of programmes available by way of local digital programme services in that area and, in particular, the extent to which they would cater for tastes and interests different from those already catered for by local digital programme services already provided in that area;
    6. the extent to which the application is supported by persons living in the area; and
    7. whether, in contracting or offering to contract with persons providing digital programme services or digital additional services, the applicant has acted in a manner calculated to ensure fair and effective competition in the provision of such services.

The Authority is also required to take account of any representations made in respect of the application.

Consideration of the application

  1. Coverage area and timetable
  2. Members were satisfied with the applicant’s proposals for the roll-out of coverage, with an initial two transmission sites (at Lichfield and Turners Hill) implemented from the commencement of services in May 2000, with some further extensions of coverage using transmitters at Bromsgrove and Bearley intended at a later stage. The offer of the licence was made conditional on the applicant’s acceptance of a limitation on signal overspill into the Wolverhampton district. These proposals, with that minor modification, will form part of the licence conditions. The Authority would be likely to be amenable to further proposals by CE Digital to extend coverage towards 100% of the primary protected area, as defined in the original coverage brief.

  3. Ability to establish and maintain the service
  4. The applicant is a joint venture between the two largest operators, in terms of market capitalisation, in the commercial radio industry. The Authority had no doubt about CE Digital’s ability to establish and maintain the service proposed in the application.

  5. Catering for tastes and interests of people in the area
  6. The commercial programme services proposed by the applicant are as follows:

    Simulcasts of existing Birmingham (analogue) ILR services
    BRMB (contemporary hits)
    Capital Gold (hits from the previous four decades)

    Other services
    Xfm - relayed from London (modern rock)
    Magic - relayed from London (soft and melodic tracks)
    Asian service (provider not yet determined)
    Dance music service (provider not yet determined)

    In its application, CE Digital indicated that a degree of specifically local material would be included from the outset in the Xfm, Magic, and Asian

    services. In follow-up correspondence, the applicant proposed changes to the proposals, instead offering a gradual introduction of locally-relevant material in line with the uptake of digital radio receivers in the Birmingham area. Although Members were disappointed that the changes had been made after the closing date, they did not consider the amendments precluded the licence from being awarded. They noted that, had there been a competing applicant for the licence, it would have been most unlikely that the changes could have been accepted.

    When tendering for and appointing a programme provider for the Asian service, the Authority trusts CE Digital will find a contractor able to deliver a service geared to the needs of Birmingham’s Asian population. CE Digital has been asked to encourage the development of locally relevant elements on the Xfm and Magic services, and (through the programme provider, when appointed) the dance music service, as rapidly as market conditions will allow. In any event, the applicant has made a commitment to include some localised output in each of the services once household digital receiver penetration reaches one third of all homes in the area (5% of homes, in the case of Xfm). These commitments will be reflected in the licence conditions.

  7. Broadening the range of local digital programme services
  8. As there are no local digital programme services available in the Birmingham area, and as this was the sole application, this criterion was effectively satisfied by default.

  9. Local support

CE Digital supplied a limited amount of evidence of local support for its application. It argued that ‘local support’ for an application for a local multiplex licence is more meaningfully measured by evidence of audience demand for the proposed programme services.

  1. Fair and effective competition

The Authority has no reason to believe that the applicant has not acted in a manner calculated to ensure fair and effective competition when contracting or offering to contract with potential or proposed service providers. In accordance with the licence conditions pursuant to the Broadcasting Act 1996, the Authority will keep matters of fair and effective competition and undue discrimination under regular review.

26 May 1999