APPENDIX 22
Memorandum submitted by the Commercial
Radio Companies Association
INTRODUCTION
The Commercial Radio Companies Association (CRCA)
is the trade body for UK commercial radio. It represents commercial
radio to Government, the Radio Authority, copyright societies
and other organisations concerned with radio. It manages the Radio
Advertising Clearance Centre which clears national and special
category advertisements prior to broadcast. CRCA also jointly
owns Radio Joint Audience Research Ltd (RAJAR) with the BBC and
was instrumental in the formation of the new Digital Radio Development
Bureau, a company owned by UK digital radio multiplex owners.
CRCA members include national commercial radio
stations, as well as most local and regional stations. They account
for almost 50 per cent of all the radio listening in the UK and
just under 80 per cent of local listening in the UK. As well as
promoting the importance of commercial radio, the CRCA plays an
active role in promoting conditions that will enable it to thrive
into the future.
BACKGROUND
CRCA is responding to the invitation to submit
written evidence to the CMS Committee's Inquiry into Communications
in advance of the draft Communications Bill. CRCA's views on the
issues which the Committee has outlined it will be examining,
are set out below. We refrain from commenting on just one matter:
progress towards analogue TV switch-off. We also consider that
the "broader issues" of universal internet access and
broadband development are outside our remit.
THE IMPLICATIONS
OF THE
DELAY TO
THE EXPECTED
LEGISLATION ESTABLISHING
OFCOM
CRCA's primary concern is the speedy implementation
of the impending Communications Bill. It is, of course, essential
that OFCOM is established by the time this Act becomes law, but
it is the timing of the legislation itself, rather than the creation
of its regulator, that is critical to the future development and
growth of commercial radio.
THE GOVERNMENT'S
OVERALL OBJECTIVES
The UK Communications Media Market
CRCA shares the Government's aim that Britain
should be "home to the most dynamic and competitive media
market in the world"[4].
The current environment prevents this, twinning out-dated and
ever expanding regulation with unnecessarily restrictive ownership
rules. The forthcoming Communications Bill offers an excellent
opportunity to shape a future in which companies can expand and
advance for the benefit of industry and consumers alike.
Access to High Quality Diverse Services
CRCA is committed to ensuring that consumers
have access to the widest possible variety of services. However,
current radio ownership rules restrict consumer choice and industry
development by limiting the number of services which an operator
can own in a locality. As a result, most areas have many stations
which tend to compete for the same, commercially attractive "middle
ground" audience.
CRCA has continually supported the introduction
of a more relaxed ownership system, both locally and nationally,
which will lead to greater diversity for consumers and more investment
by the industry into content and new technology. By permitting
a company to own more services in an area, greater choice will
be achieved for listeners. This is because a single operator will
seek to maximise listenership to its services by providing a variety
of stations, rather than to cannibalise its own audience by providing
similar services which directly compete with one another.
Allowing operators to consolidate will also
enable them to take more risks, extending commercial radio's ability
to innovate adventurous and exciting programming.
Commercial radio believes that relaxing radio
ownership rules is the key to ensuring high quality and increasingly
diverse services
The recently published "Consultation on
Media Ownership" leads us to believe that the Government
may share our view that radio ownership deregulation is appropriate,
particularly given the Government's commitment to enable single-company
ownership of ITV.
In addition, although the BBC is highly regarded,
we believe that its self-regulatory status is no longer tenable.
In recent years, the BBC has been chasing ratings, often leading
it to duplicate services already provided by the commercial sector.
This is neither good for the industry nor for the consumer. Only
by bringing the BBC under the wing of OFCOM, the new communications
regulator, can we ensure that it focuses on the type of broadcasting
that needs to be publicly-funded.
Independent regulation of the BBC would improve
the choice offered to consumers
Commercial radio is, naturally, concerned about
the way in which the industry is regulated in the future. Now
that Government has decided to create a single over-arching communications
regulator, we believe it is essential to reduce the amount of
regulation that will be applied to our industry by OFCOM. Failure
to do this will lead to the new regulator becoming slow and sclerotic,
bowed down by unnecessary and unproductive work.
We also wish to clarify that commercial radio
does not support the implementation of a "Horizontal Radio
Group" as recommended by the Towers Perrin report into OFCOM,
since we believe this will encourage micro-regulation of our industry.
Safeguarding of Citizens and Consumers
Commercial radio is entirely in favour of regulatory
initiatives designed to protect the consumer. In particular, we
are in favour of format regulation which ensures the delivery
of content promises made by licensees and ownership regulation
which is designed to ensure plurality of voice.
Commercial radio is also in favour of regulation
which protects consumers from misleading, unfair or offensive
output. However, commercial radio recommends at least partial
self-regulation wherever possible (for example in much content
and advertising regulation). We think much can be achieved by
self-regulation and adherence to appropriate codes, policed in
the first instance by the broadcasters themselves.
We believe a regulator should only get involved
in complaint adjudication when a broadcaster has failed to give
satisfaction to a complainant.
DEFINING AND
PROVIDING PUBLIC
SERVICE BROADCASTING
CRCA is anxious to dispel any misunderstanding
that may exist that public service radio is the preserve of the
publicly-funded broadcaster. Much public service broadcasting
is driven by commercial imperatives to build and satisfy audiences
and is further secured by regulation which maintains content promises.
Commercial radio has a long and proud history
of public service broadcasting. Stations serve geographical communities,
or communities of interest (such as those interested in a particular
style of music), and their efforts are focused accordingly.
At a local level, small stations concentrate
on news and community output. Almost half of the stations which
the Radio Authority licenses serve communities of less than 300,000
people, a third serve those with less than 200,000 and a fifth
serve those with less than 100,000 people. These stations provide
a lifeline in times of crisis.
In 2001, commercial radio devoted nearly £1
million of advertising airtime to "Use Your Voice",
a campaign to encourage young people to vote. And each year, the
industry raises millions of pounds for charities by organising
and supporting local and community events, from 95.8 Capital FM's
'Party in the Park' in aid of The Prince's Trust, to jumble sales
and fun-runs.
The increasing volume and diversity of commercial
radio public service broadcasting can be attributed to the industry's
continued growth. We look forward to a future where this aspect
of our broadcasting can be further enhanced as companies are strengthened
by the consolidation which ownership deregulation will allow.
THE DEVELOPMENT
AND PROMOTION
OF DIGITAL
BROADCASTING, INCLUDING
LOCAL/COMMUNITY
SERVICES AND
RADIO
Commercial radio is committed to digital broadcasting.
Over £100 million of shareholders funds has been invested
into developing the commercial digital radio network, even though
no return is expected within a ten-year period. There are already
more digital commercial radio services in London than analogue,
and new local services are being added virtually every month throughout
the country.
Commercial radio has also established the Digital
Radio Development Bureau (the DRDB) with the BBC. The DRDB presents
a unified message to manufacturers, retailers and consumers and
develops ideas for the future of DAB digital radio, creating business
opportunities and building and shaping the market.
Support from Government in the following areas
is essential to ensure that this exciting new technology is a
success:
— The UK represents just two per cent
of the world's "brown goods" market. Without the commitment
of our European neighbours, manufacturers will be reluctant to
invest in the product. The Government therefore has a pivotal
role to encourage other European governments to provide the legislation,
licensing regime and spectrum that digital radio needs in order
to succeed.
— Digital commercial radio now covers
almost 85 per cent of the UK. The BBC covers just 60 per cent.
Increased BBC coverage is essential to consumer take-up.
— It is important that Government encourages
the making available of Band 3 and L-band spectrum to enable smaller
radio services to participate in digital terrestrial broadcasting.
CROSS-MEDIA
OWNERSHIP
Commercial radio's experience within local marketplaces
has led us to the view that there are many good examples of relationships
between local press and radio that benefit the consumer and do
not disadvantage local advertisers. We hope the Government will
take this into account when deciding on whether and how to reduce
rules that currently apply to local press.
We agree, however, that there is no satisfactory
way in which the influence of the different media can be accurately
assessed. We continue to believe (as we did in our response to
the White Paper) that the least unsatisfactory way of allowing
increased opportunity for strong cross-media holdings in the commercial
broadcasting sector is via a sliding scale.
If there are truly aspirations in Government
for the creation of a strong UK-based commercial broadcasting
sector and genuine commercial competition at all levels for the
publicly-funded broadcaster, then cross-media ownership must be
relaxed if a commercially-funded company or companies is/are to
be enabled to grow as large and as widely as the BBC has been
encouraged and funded to do.
SUMMARY
Commercial radio believes that, for the good
of consumers and our industry:
— Local and national radio ownership
rules should be relaxed.
— The BBC should be brought under the
wing of OFCOM to ensure that it focuses on the provision of services
that would not exist without public funding.
— Format regulation should continue
and strong rules should remain to protect consumers.
— Some degree of self-regulation should
be introduced for radio broadcasters.
— The Government should maintain pressure
on our European neighbours to advance digital radio development.
— The BBC must be encouraged to develop
its digital transmission network.
— Sufficient spectrum should be made
available to allow all local stations who wish to participate
in digital radio to do so.
— Cross-media ownership rules should
be relaxed.
CRCA would welcome the opportunity to expand
on these and related issues in oral evidence to the Committee.
10 January 2002
4 The Rt Hon Tessa Jowell MP speaking to The Society
of Editors in Belfast, 22 Oct 2001 Back
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