11 December 2003

Radio Authority announces negative Public Interest Test determination for the proposed acquisition of a controlling interest In Telford Fm Ltd by Midland News Association Ltd

The Radio Authority has today (11 December) announced the outcome of its public interest test into a proposal by Midland News Association Ltd ("MNA") to acquire a controlling interest in Telford FM Ltd. The Authority's determination is that the proposed acquisition could be expected to operate against the public interest. The Authority has therefore made a negative determination on this proposal.

Telford FM Ltd holds the local FM radio licence for Telford, broadcasting as 107.4 Telford FM. MNA owns Shropshire Newspapers Ltd, publisher of several local newspapers circulating in 107.4 Telford FMs coverage area, including the Shropshire Star. Under the terms of the Broadcasting Act 1996, a relevant local newspaper (or connected company) cannot hold a local radio licence unless the Authority determines that the proposed arrangement could not be expected to operate against the public interest. Therefore the Authority was required to conduct a cross-media public interest test.

Before reaching its determination, the Authority considered the following matters:

(a) whether the proposed arrangement would reduce plurality of ownership in the broadcasting and newspaper industries in the Telford area;

(b) whether there would be a reduction in diversity in the sources of opinions expressed or information available to the public;

(c) whether there would be any benefits as a result of Shropshire Newspapers Ltd holding the licence, which could not be expected if the licence was held by a company unconnected to a newspaper proprietor; and

(d) whether there would be an effect on the proper operation of the market within the broadcasting and newspaper industries in the area.

The Authority took into account the submission provided by MNA and the views expressed by respondents to its public consultation exercise. The Authority received a significant number of responses to the public consultation, all of them raising concerns with the proposed arrangement. Taking account of the market shares obtained by both MNA and Telford FM and the coherent and credible objections raised by respondents to the consultation, the Authority determined that the arrangement could be expected to operate against the public interest. This was based on the current provisions which apply under the Broadcasting Act 1996.

The Authority noted that under the provisions of the Communications Act 2003 the proposed arrangement would not be subject to ownership restrictions or face an obligatory public interest test. The arrangement could, however, be subject to the discretionary special public interest regime for certain media mergers provided for in the Enterprise Act 2002 as set out in section 378 of the Communications Act 2003.

Although the Radio Authority has sought to interpret its Broadcasting Act duties wherever possible in a way consistent with the new Communications Act provisions, in this case it did not feel able to predict whether or not the new special public interest regime would be invoked.



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Revised: December 11, 2003