55/00 20 April 2000

RADIO AUTHORITY PUBLISHES ASSESSMENT OF LOCAL DIGITAL MULTIPLEX LICENCE AWARD FOR GREATER LONDON II

The Radio Authority has today (20 April) published the details of its assessment of the second local digital multiplex licence award for Greater London. The Authority awarded the licence to Switch Digital Ltd. on 6 April 2000.

A copy of the full assessment is attached.

ENDS 


NOTE TO EDITORS 

The Radio Authority is responsible for licensing and regulating independent radio in accordance with the statutory requirements of the Broadcasting Acts 1990 and 1996. It plans frequencies, awards licences, regulates programming and advertising, and plays an active role in the discussion and formulation of policies which affect the Independent Radio industry and its listeners.

LOCAL DIGITAL RADIO MULTIPLEX SERVICE

GREATER LONDON II ASSESSMENT OF LICENCE AWARD

The second local digital radio multiplex service licence for Greater London was awarded to Switch Digital Ltd. on 6 April 2000, to run for twelve years from the date the service commences broadcasting.

Applications were invited on 10 September 1999. By the closing date of 11 January 2000, three applications had been received, from:

  • MXR London Ltd., a company whose shareholders are Chrysalis Group plc, Border Radio Holdings Ltd., DMG Radio Digital Ltd. and Soul Media Ltd.
  • Score Now Ltd., a company whose shareholders are Score Digital Ltd. (Scottish Radio Holdings plc), GWR Group plc and GMG Radio Holdings Ltd.
  • Switch Digital Ltd, a company whose shareholders are Wireless Group Ltd., Clear Channel International UK Ltd., Ginger Media Group Ltd., and Carphone Warehouse Ltd.

 

Consideration of the successful application

All three applicants submitted impressive proposals and Members had no doubt that each applicant would, by itself, satisfy the statutory criteria set out in the Broadcasting Act 1996. The award of this licence represents the first occasion on which the ‘broadening of choice’ consideration (section 51(2)(e)) comes meaningfully into effect, with the local digital programme services to be carried on the CE Digital London multiplex providing the benchmark.

  1. Coverage area and timetable 
  2. Members were satisfied with Switch Digital’s technical proposals, which should provide robust coverage within its core transmission area. Switch Digital is aiming to launch its services in June 2000 from the Crystal Palace transmitter in order to complement the launch of the first digital multiplex operated by CE Digital. Nine further transmitters at Alexandra Palace, Bluebell Hill, Brookmans Park, Guildford, Hemel Hempstead, Northwood, Otford, Reigate and Zouches Farm will commence broadcasting from September 2000.

  3. Ability to establish and maintain the service
  4. The Authority recognised that all three groups had adequate funding as they had been established by some of the radio industry’s most successful operators. However, the Authority was impressed by Switch Digital’s unique multiplex management proposals, and in particular its pro-active marketing plans which reflect the group’s positive approach to the concept of DAB. Rather than relying on analogue on-air promotions by its service providers who are existing Authority licensees, Switch Digital intends to encourage actively the uptake of digital radio and will make use of its investors, Clear Channel and the Carphone Warehouse, to provide promotional opportunities. The Authority felt that this approach demonstrated the commitment Switch Digital had to establishing and maintaining its service in a competitive local marketplace. The fact that the majority of programme providers being carried on the multiplex are shareholders in the multiplex should provide security of longer-term income for the licensee.

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

    Classic Soul (Provider: Virgin Radio)

    Adult Contemporary (Provider: to be confirmed)

    Speech/Music (Provider: Wireless Group)

    Classic Rock and Sport (Provider: Wireless Group)

    Easy Listening (Provider: Clear Channel/Saga Radio)

    Chart Hits and Club Dance (Ministry of Sound/Clear Channel)

    Jazz, Soul and Blues (Jazz FM)

    Traffic and Travel News (Provider: ITIS)

    Members considered that the proposed programme services would cater to different tastes and interests, as well as age groups, within the Greater London area and were to a large extent, London-oriented. The Authority was pleased to see the inclusion of a service for older listeners and noted the novel traffic and travel service had been rated highly by those interested in digital radio. They also noted the proposal to split the Classic Rock and Sport Channel on occasion to broadcast sports commentary in parallel with the music service. Finally, they were impressed by the inclusion of a programme supplier with a strong and influential position in the dance music market. None of the prospective applicants for the second Greater London multiplex had included plans for the use of additional services which fully exploited the potential of that medium.

  7. Broadening the range of local digital programme services
  8. This statutory criterion requires the Authority to judge applicants’ programming packages against existing local digital sound programme services. This is the first time that such a comparison has been possible. The Authority has already stated that broadening range will not necessarily be best served by proposals for niche services only, and that some competition between popular programme formats may be beneficial to the listener. In this regard, the Authority must consider the requirements of section 51(2)(e) of the 1996 Act – to consider the extent to which the proposed programme services would broaden digital choice – in the light of its duties under section 85(3)(b) of the 1990 Act – to ensure fair and effective competition in the provision of services. The Authority recognises that fair and effective competition can involve competition between services with a same or similar format, as well as competition between different types of services. Finding the balance between these is not easy, and will be decided by the Authority on a case-by-case basis with regard to the entire package presented by applicants. In this case, Members were satisfied that Switch Digital will offer listeners a bouquet of services that will provide competition both between and within formats, compared to the digital services to be provided by CE Digital on the first London multiplex. Digital choice in London will be broadened both by the provision of alternative services in popular existing formats (adult contemporary and dance), and by a range of new formats.

  9. Local support
    Rather than providing direct evidence of local support, Switch Digital preferred to concentrate on using audience research to demonstrate the extent of support for its proposed programme services. The findings from this research provided credible support for the group's chosen programming package.

 

  1. Fair and effective competition 
  2. 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.

Background

Copies of the non-confidential section of the applications were made available for public inspection at the Authority’s offices in London. A notice was issued on 11 January 2000 inviting public comments on the applications.

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 applications.

 

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