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22 December 2000

The Radio Authority has today (22 December) published details of its assessment of the local digital multiplex licence award for North-East England. The Authority awarded the licence to MXR Ltd on 14 December 2000.

A copy of the full assessment is attached.

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.

The local digital radio multiplex service licence for the region of North-East England was awarded to MXR Ltd. on Thursday 14 December 2000, to run for twelve years from the date the service commences broadcasting.

Applications were invited on 23 June 2000. By the closing date of 17 October 2000, three applications were received, from:

• MXR Ltd., a company whose shareholders are Chrysalis Group plc, Capital Radio plc, Guardian Media Group plc, Jazz FM plc, UBC Digital Ltd., Soul Media Ltd. and Ford Motor Co. Ltd.
  
• The Digital Radio Group (North East) Ltd., a company whose shareholders are the Wireless Group plc, GWR Group plc, Emap Digital Radio Ltd., SMG plc and the Carphone Warehouse plc.
  
• North East Digital Radio Ltd., a company whose shareholders are Forever Broadcasting Digital Radio Ltd., Saga Regional Digital Radio Ltd. and SCORE Digital Ltd.

Members felt that the applications were generally of high quality, with varied services appealing to a broad range of ages and interests, a clear appreciation of the value of regional information, and thought given to the potential of multi-media or data applications. Members had no doubt that each applicant would, by itself, satisfy the statutory criteria set out in the Broadcasting Act 1996.

1. Coverage area and timetable

Members were satisfied that MXR Ltd.’s technical proposals were compliant with the requirements of the Authority’s coverage brief. MXR is aiming to launch all but one of its services by June 2001 (with Digital News Network following in the Autumn) using five transmission sites (at Bilsdale, Burnhope, Fenham, Haining and Alnwick). These will provide ‘outdoor coverage’ of 94% of the adult (aged 15+) population of the ‘primary protected area’ (PPA), according to the applicant’s own estimate. Members noted that all of the applicants’ proposals would achieve a very similar extent of coverage, and that their proposed launch dates, after allowing for frequency clearance, did not differ greatly, and were all well within the customary timescale for the establishment of digital multiplexes. Consequently differences between the proposals in coverage and roll-out were felt not to be significant enough to be factors in the award decision.

2. Ability to establish and maintain the service

The Authority recognised that all three groups had adequate funding, as they involved some of the radio industry’s most successful and well-resourced operators, together with other partners who brought ‘added value’ to their respective consortia. They all proposed the same basic approach to the financial management of a multiplex operation, and had estimated similar costs. Members thought that the security of MXR’s income was enhanced by the fact that all of the service providers were also shareholders in the multiplex. They were of the view that this arrangement should bring additional cohesion to the establishment and operation of the multiplex. They also noted with interest the inclusion among the shareholders of UBC Digital (a joint venture between Unique Broadcasting and Psion), and Ford of Britain, which has announced that it intends to fit digital radios in new cars by 2004.

3. Catering for tastes and interests of people in the area

The commercial programme services proposed by the applicant are as follows:

Children’s radio                           Fun (provider: Capital Radio plc)

Urban Urban                                Flava (provider: Soul Media Ltd.)

Melodic adult contemporary      Heart (provider: Chrysalis Radio Ltd.)

Jazz                                             Jazz (provider: Jazz FM plc)

Adult rock                                   The Arrow (provider: Chrysalis Radio Ltd.)

Easy listening                            Smooth (provider: Guardian Media Group plc)

Rolling regional news               Digital News Network (provider: DNN Ltd.)

Dance/rhythmic hits                  Galaxy (provider: Chrysalis Radio Ltd.)

Music and talk                           Century (provider: Capital Radio plc)

Members thought that the proposed programme services would succeed in catering for different tastes and interests within the North-East region. The proposed bouquet of services catered for a good range of different age groups and a variety of specialist interests. Members appreciated the clarity with which MXR had defined its programme formats. Members were pleased to note that all three applicants had paid attention to the provision of material directed specifically at listeners in the North-East region, but were particularly impressed by MXR's proposals for the resourcing and provision of the regional rolling news service. Members also considered it appropriate for the children's service to be offered on a 24-hour basis to cover the range of times when children might be available for listening.

4. Broadening the range of local digital programme services

This statutory criterion requires the Authority to judge applicants’ programming packages against existing local digital sound programme services. Members were satisfied that MXR will offer a bouquet of services which will extend audience choice in relation to Emap's local multiplexes for Tyne and Wear and Teesside by offering various formats which are new to the area, including some which are available on digital only.

5. Local support

6. Fair and effective competition

Copies of the non-confidential section of the applications were made available for public inspection in the main public libraries in Newcastle-upon-Tyne, Sunderland and Middlesbrough, and at the Authority’s offices in London. A notice was issued on 17 October 2000 inviting public comments on the applications.

Under the terms of section 51(2) of the 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.