Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


Memorandum submitted by the Commercial Radio Companies Association


  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.


  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.


  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 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.


  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.


  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.


  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.


  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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