8 March 2001
Radio Authority publishes assessment of the
local digital multiplex licence award
for West Midlands
The Radio Authority has today (8 March) published details of its assessment of the local digital multiplex licence award for the West Midlands region. The Authority awarded the licence to MXR Ltd. on 8 February 2001.
A copy of the full assessment is attached.
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:
ASSESSMENT OF LICENCE AWARD
The local digital radio multiplex service licence for the West Midlands region was awarded to MXR Ltd. on Thursday 8 February 2001, to run for twelve years from the date the service commences broadcasting.
Applications were invited on 24 August 2000. By the closing date of 12 December 2000, three applications were received, from:
Consideration of the successful application
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 the end of August 2001 (with Digital News Network following in the Autumn), subject to frequency clearance, using eight transmission sites (at Sutton Coldfield, Turners Hill, The Wrekin, Bromsgrove, Daventry, Ilmington, Shilton and Pye Green). These will provide ‘outdoor coverage’ of 95% of the adult (aged 15+) population of the ‘primary protected area’ (PPA), according to the applicant’s own estimate. Members noted that MXR’s technical plan would not achieve the most extensive coverage of those submitted by the applicants, according to the estimates of Radio Authority engineering staff. However, MXR’s network design is sound, and its coverage should be improved in practice by the modification of aerial radiation patterns and power levels at some of the sites proposed in the application, consistent with the advertised technical requirements of the licence, and in consultation with the Authority. The proposed launch dates of all three applicants, after allowing for frequency clearance, did not differ greatly, and were well within the customary timescale for the establishment of digital multiplexes.
The Authority recognised that all three groups were adequately funded, as they involved some of the radio industry’s most established operators. They all proposed the same basic approach to the financial management of a multiplex operation, and made broadly similar estimates regarding forecast costs and revenues. Members were impressed by the apparent cohesiveness of the MXR consortium and recognised that this was in part due to the congruence of programme providers and shareholders. Members were encouraged by the emphasis that MXR had placed on marketing the service.
The commercial programme services proposed by the successful applicant are as follows:
Children’s radio Fun (provider: Capital Radio plc)
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.)
Urban and rhythmic music Galaxy 102.2 (provider: Chrysalis Radio Ltd.)
Melodic adult contemporary 100.7 Heart FM (provider: Chrysalis Radio Ltd.)
Service for older listeners Saga Radio (provider: Saga Radio Ltd.)
MXR’s proposed bouquet of services provides for the broadcasting of the existing local analogue licensee for the West Midlands region, 100.7 Heart FM and, in common with both of the other applicants, the group had set aside capacity for whichever service was awarded the second local analogue licence for the region. Members recognised that the consequent addition of the newly licensed Saga Radio, alongside the proposed ‘easy listening’ channel Smooth, would result in MXR’s bouquet including two programme services aimed specifically at older listeners. However, they considered that there would be discernible differences between the two services (in their different music:speech ratios, and the variety of music styles proposed), and that older listeners were as entitled to a choice of different services as were those in the younger age-groups. Members also approved of MXR’s plans to establish a well-resourced regional news operation, Digital News Network (DNN), which would act as a source of regional and local news for the non-simulcast services being transmitted on the multiplex, as well as forming the basis of a discrete all-speech regional rolling news channel. Members welcomed the extent to which MXR’s proposed programme services were to be enhanced by related (ancillary) multi-media applications. Members were pleased to note the level of attention given by each of the three applicants to providing material directed specifically at listeners in the West Midlands region on their proposed non-simulcast services.
This statutory criterion requires the Authority to judge applicants’ programming packages against existing local digital sound programme services. In this case Members had to ensure that audience choice would be extended in relation to three local multiplexes, in Birmingham, Wolverhampton and Coventry. Although MXR was not the applicant proposing the largest number of programme services, Members felt that it was important that services should be provided at a bit rate which enabled the audio quality benefits of digital radio transmission to be appreciated by listeners. In addition, Members noted that the bouquet of programme services offered by MXR included a large proportion of formats which were not as yet available to digital radio listeners in the West Midlands.
MXR provided significant direct evidence of local support through personal and business endorsements, in particular reflecting the popularity of Heart 100.7 and Galaxy 102.2 in the area. However, in general, the applicants all preferred to use audience research to demonstrate the extent of public support for the types of programming proposed. Members looked closely at how far the findings of the research undertaken by each applicant were genuinely reflected in the programme services proposed. As regards MXR’s research, Members were of the opinion that this might have been more convincing had it tested a wider range of formats. This, Members felt, could have made the results more reflective of any regional variations in tastes and interests.
6. Fair and effective competition
The Authority has been given no reason to believe that the applicants did not each act 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.
Copies of the non-confidential section of the applications were made available for public inspection in Birmingham Central Library (local studies section), Wolverhampton Central Library (reference section) and Coventry Central Library (local studies section), and at the Authority’s offices in London. A notice was issued on 12 December 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:
The Authority is also required to take account of any representations made in respect of the applications.
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