Additional Services are services which use the 'spare' capacity within the signals carrying sound broadcasting services on relevant frequencies, for example to transmit data.
Ofcom is required to do all it can to secure that all the spare capacity on relevant frequencies which is available for Additional Services is used for their provision under Additional Services licences.
There is currently one Additional Service licence. It is held by ITIS Holdings PLC and is used to transmit traffic and road travel information to in-car navigation devices, using spare capacity on the national FM frequencies used to broadcast Classic FM. That licence is due to expire on 31 December 2011.
Ofcom is proposing to advertise a new Additional Service licence, using the same spare capacity on the Classic FM frequencies. The Broadcasting Act 1990 (the 1990 Act) sets out what Ofcom has to do to advertise and award the proposed new licence. It provides for the licence's award to the highest cash bidder (unless it appears to Ofcom there are exceptional circumstances that make it appropriate to award the licence to a different bidder).
This document makes the following proposals for consultation in connection with the proposed new licence:
- the spare capacity available for the provision of the Additional Service under the new licence should be the same as that under the current licence (section 2 and Annex 1 below);
- the new licence should have a duration of around six years and one month (running from 1 January 2012 until sometime around the end of January 2018 ), so that it expires when the Classic FM sound broadcasting service licence would expire, rather than being any shorter (section 3 below); and
- the Percentage of Qualifying Revenue (PQR) payment the licensee must make annually under the licence should be set at 4% (section 4 below).
Ofcom asks seven consultation questions about these proposals and invites responses to them by 25 November 2010.
This document also sets out, for the benefit of stakeholders, the position on the following matters relating to the proposed new licence:
- the relevant statutory framework;
- that the licence may not, under the current legal framework, be any longer than six years and one month because it is inextricably linked to the Classic FM sound service, and to the licence for that service which will expire in January 2018 at the latest (also in section 3 below); and
- the process Ofcom will follow in inviting applications for the proposed licence, considering cash bids and deciding whether and how to exercise its discretion in exceptional circumstances to award the licence to a bidder other than the highest cash bidder (section 5 below).
What we say on these matters reflects the legal position under the 1990 Act, rather than proposed exercises of Ofcom discretion on which we are consulting.
Our intention is that we will publish a final statement to this consultation, setting out our decisions on the matters referred to in paragraph 1.5 above, and the advertisement for the proposed new licence, in Mid-December this year or early January 2011. Our aim is that the new licence should be awarded in June 2011.