1. The Authority has been anxious to encourage radical suggestions and is keen not to rule out any credible use of AM, however imaginative. Nevertheless, we recognise that there are significant constraints on what the Radio Authority can do under the present legislation. First, the Broadcasting Act 1990 requires the Authority to secure the character of licensed services, and changes in the character of any service can only be allowed in accordance with Section 106 of the Act. Second, the Authority’s life is limited, and it would not want to start any major new initiatives which it could not carry through to conclusion, or which were not endorsed by the incoming Ofcom regulator. Third, we have been advised that legal constraints prevent the Authority from allowing ILR licences being deployed to construct national network services, even should we have been minded to do so. Nevertheless, the Authority believes that there is still scope within these constraints for a significant development of policy towards AM in a number of respects, and we are minded to display the maximum flexibility in those areas where change is possible.

2. The Authority is happy to look sympathetically at proposals for radical changes in the format of AM stations, in areas where FM licences provide a broad basic service, and where those changes offer a distinct expansion of choice. For example, we will be very interested to see suggestions for better serving minority, disadvantaged or currently excluded audience groups, whether defined by their interests, demographics or ethnicity. While it must work always within the limits of Section 106 of the Broadcasting Act 1990, the Authority has it in mind to look favourably and flexibly at any such proposals. This, we hope, may offer a way of extending the range of services within independent radio, and may also stimulate those operating existing AM licences to explore their potential more fully.

3. We consider that similar flexibility should also be shown in respect of more minor changes in format, where these are directed towards increasing the range and diversity of output. This would apply to Independent National Radio (INR) services where the format impositions are lighter, given that they are in effect paying for their spectrum, and also to Independent Local Radio (ILR) services where this can be done within the constraints of the legislation.

4. Extensive part-networking has been allowed by the Authority for a number of years. As a general rule, we have allowed AM stations which are in areas also served by comparable local FM services (and usually in common ownership) to join together in common output, provided that there is at least 4 hours of separate local peak time service and a clear and demonstrable local content at other times. The exception to this has been where stations have been relatively recently licensed following competitive applications where the winning applicant proposed a more substantially local service. The Authority is not minded to relax any further the constraints on part-networking. A minimum of four hours distinct local output, plus other local contents, already represents a very permissive position. In addition, our legal advice is that to go further might effectively create networks and thus a nation-wide broadcaster other than through the statutory INR licence award process, and would therefore be outside the Authority’s powers. However, we welcome new and imaginative ideas for developing the concept of part-networking, without prejudging what form these might take, and provided that existing localness of output is at the least protected and at best enhanced.

5. The pressure on the Authority to complete its current licensing programme before it is replaced by Ofcom leads us to the conclusion that we do not have the resources to offer any new AM-only licences. However, we believe that there is real scope for such licences, where these are specifically designed for identifiable unserved existing audience segments. If the Authority were to be continuing in its present form and with its present remit, rather than passing these responsibilities to Ofcom, we would have it in mind to offer new AM licences in due course. We would envisage these being in major conurbations and/or for covering rural areas, having made clear that in awarding those licences the Authority would interpret the provisions of Section 105 of the Broadcasting Act 1990 to favour applicants whose approach to diversity included programming for currently unserved groups. These might be defined, as above, by demographics, interests or ethnicity, or in other ways, and perhaps be awarded by more streamlined procedures (see paragraph 11). The Authority could not itself undertake such new AM licensing without sacrificing some of the new FM licensing planned through the current working list.

6. Three of the Access Radio pilot experiments have been licensed to operate on AM. We will be paying particularly careful attention to the effectiveness of this waveband for these third-tier services. On the one hand this is generally a more expensive form of transmission. On the other, the constraints on FM availability are severe and the availability of AM for local coverage for community based stations may make it an attractive complementary option. It will be for Ofcom rather than the Radio Authority to decide upon that option weighing its merits against the competing demands outlined in paragraph 5, but we hope to have drawn together a body of evidence indicating whether or not it is credible. We will also continue to offer AM frequencies for long and short-term Restricted Service Licences (RSLs), both for those services in their own right and also to inform future decisions on third-tier radio.

7. The Radio Authority hopes to be in a position to provide for Ofcom a range of options for the future use of AM. Clearly, it will be for the new body to decide which if any of these it wishes to adopt. However, after the wide range of input we have received in our own consultations, we believe that there will be every opportunity for the new regulator to maintain momentum in the deployment of AM.

8. It would be open to Ofcom to advertise a new national INR network on AM, if a suitable range of frequencies currently in use by ILR could be assembled. This could be done by existing operators resigning AM licences, or licences not being renewed at the end of their term, together with the deployment of some new frequencies. This might include the severely interference-limited long-wave frequency of 225 kHz, although the strong reasons for not proceeding with this option when it first arose still remain. Any such licence, nominally INR4, would need to be offered on a comparable basis to that of existing INR licences.

9. As indicated above, the Radio Authority does not believe it has the time or capacity itself to offer new ILR licences, without withdrawing proposed new FM licence advertisements. However, we hope to complete an example frequency plan, based on current and possible new AM frequencies, to allow Ofcom to consider at an early stage whether it wishes to undertake such licensing. If so, we recommend that this should be with the intention of providing services for currently unserved groups, as set out in paragraph 5 above. This might also be a way to use any existing AM licences resigned for other reasons.

10. Future use of AM will involve decisions on the relative priorities of national, local and third-tier licensing. At present, the Authority is keenly aware that a wide-spread introduction of Access Radio would require significant access to residual capacity within the FM sub-bands, including those currently deployed for BBC national and local services. It seems likely to us that these will also need to be supplemented by extensive use of AM.

That leads to a conclusion that we would recommend to Ofcom that any new AM frequency resource could be deployed for a limited combination of Access Radio services, together with some ILR services in major conurbations serving the type of potential audiences described in paragraphs 2 and 5.

11. International initiatives (including in the UK) to develop, refine and establish standards for digital broadcasting on frequencies currently used by the analogue AM system are continuing to progress, and technical field trials have been encouraging. The Digital Radio Mondiale system (DRM) although originally conceived for international broadcasting appears to offer some promise in the longer term for certain types of application within the UK. However, these are relatively limited as a proportion of the domestic sound broadcasting landscape as a whole, for which DAB digital radio will dominate as the primary channel of radio listening. As with any new technology, significant commercial challenges remain. Therefore the Authority believes it would be premature at this stage to establish a firm policy on the introduction of DRM. Most significantly, any widespread and effective use of DRM would require a major replanning of the existing frequency band which it would occupy. This is reasonable to contemplate in the context of analogue AM services being phased out as listenership to those services moves to DAB reception, but this is clearly a longer term prospect. On balance, the Authority does not believe that the relatively limited options for new analogue services outlined in this strategy is particularly pre-emptive of the opportunity to introduce DRM in the future. The most obvious rôle that DRM could play is in bringing a digital service to areas of difficult terrain and low population density.

12. If Ofcom is to offer new AM licences, then we recommend to it that a different, simpler and more streamlined licensing procedure should be adopted than that currently used for ILR. Both for Access Radio and minority ILR services, the cost and complexity of application could be a significant factor hindering new entrants to the medium, and we have it in mind to propose a separate fast-track licensing procedure for these purposes. This might require some legislative change, and the Authority is considering what proposals it should make to Government about this in the context of the draft Communications Bill.