1 Introduction & Executive Summary
1.1 Ofcom welcomes this opportunity to submit evidence to the House of Commons Culture, Media and Sport Select Committee's inquiry into the Future for Local and Regional Media.
1.2 As the United Kingdom's independent regulator for the communications sector, Ofcom's principal duty, set out in section 3(1) of the Communications Act 2003 is:
· to further the interests of citizens in relation to communications matters; and
· to further the interests of consumers in relevant markets, where appropriate, by promoting competition.
1.3 Our main statutory duties in the area of the Committee's inquiry are to secure the availability throughout the United Kingdom of a wide range of television and radio services of high quality and wide appeal and to maintain sufficient plurality of providers of different television and radio services (section 3(2)(c) and (d) of the Communications Act).
1.4 We also have duties related to the provision of public service television broadcasting (PSB), including regional news coverage, and duties specific to radio broadcasting, which include licensing of national, local and community analogue radio stations and maintaining a range and diversity of local stations broadcasting local material.
1.5 In addition, we have a duty to report and make recommendations to the Secretary of State at least every three years on the operation of the media ownership rules, which include local radio ownership rules and local cross media ownership rules. We also have an advisory role in relation to mergers in markets where we have particular knowledge or insight. In addition, we carry out the "public interest test" and report to the Secretary of State if the Secretary of State chooses to intervene in a media merger.
1.6 We are currently undertaking a range of work that touches upon areas of the Committee's inquiry:
· Follow-up work related to our Second PSB Review completed in January 2009, where we indicated that we would be doing further research to understand the level of interest in local television and other media to assess the future viability of local media as a whole; this is being considered, amongst others, as part of our Local Media Review;
· A review of the regulatory framework for local commercial radio and the future of local digital radio services (as part of which we have submitted two papers to the Government's Digital Britain project);
· review of the media ownership rules, with our report and recommendations to the Secretary of State due by 13 November 2009; and
· assisting the OFT in its current review of the local and regional media merger regime.
Much of this work is currently underway, and we intend to publish consultation or discussion documents in the summer. Where appropriate, we are also feeding in to the Government's Digital Britain process, the outcome of which may influence the workstreams outlined above. In particular, we are conducting research and analysis in a number of areas for our Local Media Review, including quantitative and qualitative consumer research and economic analysis of the local media sector. We have also met with over 40 stakeholders in the sector.
1.7 Since our analysis is still ongoing, this evidence outlines preliminary views. Until we publish our documents in the summer; proposed policy approaches remain subject to the outcome of a consultation process. This is therefore our initial evidence to the Committee with a view to submitting further evidence at the pleasure of the Committee.
1.8 The term 'local' can have many different interpretations for the public. Despite increased convergence, we should not regard it simply as one business model facing one set of challenges. Ofcom's primary focus is upon those sectors we regulate - television and radio - although we are also looking at related industries of newspapers and internet content given that they form part of the local media mix and impact on television and radio.
1.9 Our preliminary findings suggest that local media is important and valued by both citizens and consumers. We believe local news and journalism play a role in democracy by keeping citizens informed as to what is happening in their locality. Other types of content, for example, features and listings, have a role to play in promoting community cohesion through shared experiences.
1.10 A choice of local media services is also important to both citizens and consumers.
1.11 There is evidence to suggest that the local media sector is facing significant economic pressure as a result of a combination of structural change in advertising markets (advertising expenditure, in particular classified print and radio display is migrating from traditional local media to the internet) and the cyclical impact of the recession. This is not manifesting itself in a uniform way, nor does it mean that the underlying fundamentals of free to air television, broadcast radio or indeed newspapers are broken. However business models are coming under stress and there is pressure for change in the way local media services are provided.
1.12 In some areas, these pressures may be making key services unviable. In the Second PSB Review, we concluded that regional news on Channel 3 (ITV, stv, UTV, and Channel TV) is increasingly unviable and yet it is one of the areas of PSB content most valued by audiences. We currently consider that Independently Funded News Consortia are the most suitable way to secure sustainable plurality in regional television news.
1.13 We have suggested a range of options, but in broad terms, we believe that Independently Funded News Consortia have the potential to provide quality regional television news outside of the BBC on an ongoing basis. The potential composition of Independently Funded News Consortia, which might include local newspaper groups, in addition to broadcasters could enable regional television news to be provided in new ways, giving the possibility of increased levels of localness.
1.14 We have also set out our preliminary thoughts on the future of radio. In our submission Building on the Myers Review, Ofcom suggested to Government four alternative options for regulating localness on commercial radio stations serving populations of under 700,000. Each of these would require some form of local news to be provided, and we have set these out in the submission.
1.15 The need for new business models and increased technological convergence may also place more pressure upon the current ownership restrictions at a local level. At the same time such rules are an important means of safeguarding plurality. We are carrying out a review of the media ownership rules. If appropriate, we intend to consult on recommendations to changes to the rules before submitting our report to the Secretary of State.
1.16 Overall, the preliminary picture we can present here is of a market in flux. The picture is by no means universally negative, but there are serious challenges, particularly to maintaining regional television news. Ofcom's role within this is to try to secure the best interests of citizens and consumers both in terms of their choice of quality content and also ensuring that markets can function.
In the remainder this document, we provide a brief background to the local media landscape in the UK in Section 2, and address the specific questions on which the Committee has invited views, in Section 3, namely:
o The impact on local media of recent and future developments in digital convergence, media technology and changing consumer behaviour
o The impact of newspaper closures on independent local journalism and access to local information
o How to fund quality local journalism
o The appropriateness and effectiveness of print and electronic publishing initiatives undertaken directly by public sector bodies at the local level
o The role and effects of search engines and online aggregators on local media
o The future of local radio and television news
o Opportunities for "ultra-local" media services
o Opportunities and implications of BBC Partnerships with local media
o Incentives for investment in local content
o The extent of plurality required in local media markets
o The desirability of changes to the regulatory framework for print and electronic local media, including cross media ownership and merger regulations
2 The local media landscape
A complex and evolving landscape
2.1 The UK's local and regional media sector is a mixed ecology which includes approximately 1300 regional and local newspaper titles, 350 BBC, commercial local and regional radio services , regional television news bulletins delivered by both publicly-funded and commercial providers, an embryonic local television sector and a range of local commercial, public and community-based media.
2.2 A key feature of local media is its heterogeneity, with a large number of players operating in the sector. There are 87 regional and local newspaper publishers listed by the Newspaper Society as at January 2009 (excluding non-members and publishers which only produce daily free newspapers) and 76 commercial local radio operators, operating 304 services, in addition to the 135 community radio providers broadcasting. However few providers operate across platforms, with most concentrating on a single medium. The types of organisation delivering local media are also varied and widespread, ranging from public limited companies, private companies, media trusts, local government and the BBC to a range of community groups and individuals.
2.3 The heterogeneity of local media makes it difficult to give a universally accepted definition as to what 'localness' is. Consumer research suggests that individuals find it easy to distinguish between the concepts of 'national' and 'regional', but there are differences in how people classify different levels of localness. 'Localness' is broadly categorised into several scales- though the boundaries between these levels of localness are blurred and differ between individual media and individuals. Thus definitions of 'localness' are inherently flexible, and what could be construed as 'regional' in some contexts, could be regarded as 'local' in another.
Figure 1: Perceptions of 'localness'
2.4 Boundaries between 'regional', 'local' and 'ultra' (or 'hyper')-local are also blurred within industries. For example, the coverage area of commercial radio stations (some serving populations of several million) through to small commercial stations in Scotland that reach of a few thousand. Likewise, in press, the geographic coverage areas of newspapers can vary from daily newspapers covering entire regions or metropolitan areas, for example, The Scotsman or the Yorkshire Post, through to weekly newspapers with content focussed on individual towns. Although classified as 'regional' BBC and ITV, stv, UTV and Channel TV regional content is the most popular main source of 'local' news in consumer research that Ofcom has conducted. In the devolved nations, "regional" news on television can be seen as national news, rather than news about particular regions of the nations, contrasting with the situation in England. Thus in the devolved nations, for example Wales, the picture is more complex, with UK, Wales, regional (e.g. South Wales) and (local e.g. Penarth) levels.
Figure 2: Summary of Regional and Local Media in the UK
2.5 In addition to the services outlined above, S4C provides content in Welsh, including a news service, in addition a range of factual, entertainment, drama, children's and sports programmes in Welsh. BBC Alba provides nations TV programming in Gaelic. The service includes news, Scottish sport music, entertainment and children's programming.
2.6 In recent years there has been a trend towards greater consolidation of local media.
· In television, the Channel 3 television licence is now operated by a single company (ITV plc) in England and Wales following a period of consolidation of licence holders which began in the 1990s.
· In newspapers, the five major regional newspaper groups account for over 70% of newspaper circulation, with the top ten groups listed by the Newspaper Society accounting for almost 89% circulation
· In radio, the two largest commercial radio groups now account for 39% of commercial local radio services after a series of mergers between groups.
· Consolidation has been primarily within a single media platform, although there is some cross media ownership between regional newspapers and radio (for instance, Guardian Media Group and Tindle), and between regional television and radio (UTV).
2.7 The local media sector is currently undergoing both cyclical and structural change, leading to financial pressures on some of the firms operating in the local media space. The key trend, the migration of advertising revenues away from traditional media to online has been driven by increased take-up of internet access and online services and entry of online only players into the local media space. The impact of this structural change has been compounded by the current macroeconomic environment.
3 Response to the Committee
Ofcom's response to the Committee's areas of inquiry
The impact on local media of recent and future developments in digital convergence, media technology and changing consumer behaviour
3.1 The vast majority of adults (90%) consume some form of local media. Over seven out of ten watch regional news on television and three quarters use a local newspaper at least weekly, while nearly half listen to local commercial radio and one in five access a local news website (one in four broadband users). While regional television news and local newspaper readership are skewed towards older age groups, the young are leading the take-up of local media online.
Figure 3: Use of local media at least weekly, consumers with broadband and without broadband at home
Source: Ofcom research conducted for BBC MIA, omnibus carried out in August 2008
Base: All adults (n=2088)
3.2 Consumers see the range of local media available fulfilling complementary purposes. Besides factual news and information about their locality, people also listen to local radio for music and entertainment and they read local newspapers for the classified advertisements. People also value local information from a range of sources, including council newsletters, political party communications and local community leaflets and flyers. The internet has had a major impact on the volume and quality of information available.
3.3 Three quarters of adults consume local news on a regular basis, but the way people say they are consuming local news has changed in recent years. Consumption of traditional media is falling while use of the internet has grown. Newspaper circulations have been falling since the 1970s at a consistent rate of around 2% per annum, whereas reductions in regional television viewing and local radio listening have been more recent.
3.4 The proportion citing television as their main source of local news has remained stable since 2002, at around half of adults. At the same time, while 32% said local newspapers were their main source of local news in 2002, this fell to 23% in 2008, with indications of a decline in the use of radio falling from 13% to 11% and the internet growing from 1% to 4%. This growth in internet use as people's main source of local news has to some extent been at the expense of other media - one quarter of those accessing local newspaper websites said they do so instead of reading the hard copy.
Figure 4: Trend in main source of local news
Source: Ofcom's Media Tracker, April & October 2008, Ofcom's Technology Tracker 2005-2007 Base: All UK adults aged 15+
3.5 The increase in the take-up of broadband, from 4% households in Q4 2002 to 60% at the end of 2008 has been a key driver in some of the shifts that have taken place in the consumption of local media.
Figure 5: Household penetration of key technologies
Source: Ofcom Technology Tracker, 2002-2008
Base: All UK adults aged 15+
3.6 Our research suggests that take-up of broadband has had an impact on the way local content is consumed. Among recent broadband adopters broadband has had most impact on consumption of local radio and local newspapers. Nearly 10% say they now read fewer local newspapers than before and one in seven say they listen to less local radio.
Figure 6: Total regular use (at least weekly) of each type of local media among users who have had broadband for less than 2 years
Source: Ofcom Research conducted for BBC MIA, SPA survey, June 2008 Base: All with broadband at home for less than 2 years
3.7 Younger recent broadband adopters (16-34) appear to be driving this shift with almost twice the average saying they now consume each of these media less frequently than before.
3.8 Broadband ownership has had a positive impact on use of local news websites. Men (17%) and those living in rural areas (18%) are most likely to say they use sources these more than before.
The impact of trends on the economics of local media
3.9 Increased take-up of the internet has had a profound impact on advertising markets in the UK. From 1998 to 2008, Advertising Association data shows that there has been a migration of advertising revenue away from traditional media, including TV, regional/local press and commercial radio to online advertising. TV advertising revenues fell by £300m in real terms (2000 prices) to £3.3bn between 2002 and 2008, regional newspapers (including local titles) fell to £2bn from £2.8bn during the same period. In contrast Internet advertising grew in real terms from £0.2 to £2.8bn over the same period. According to Ofcom's 2008 International Communications Market Report, the UK had the highest proportion of advertising revenue spent on the internet of any major economy - 19% in 2007.
3.10 Online advertising presents attractive opportunities to advertisers, including increased ability to target specific audiences, and more effective measurement. Online advertising is also flexible in terms of advertiser payment models - under a pay-per-click or pay-per-action system, the advertiser is only billed when a potential customer either clicks on an advert or carries out some action, such as making a booking.
3.11 The economics of regional television news have been well documented in our Second PSB Review. The increased penetration of digital television and the audience fragmentation in television viewing it brings have created structural declines in advertising revenue and this has been compounded by the impact of the recession. Recognising the decrease in the value of its PSB licences, ITV plc scaled back its regional news services at the beginning of 2009 from 11 to 9 regions and has said it intends to exit from regional news completely in 2010.
Figure 7: UK advertising revenues by platform 2002 - 2008 at constant (2000) prices
Source: Advertising Association statistics. "Other" grouped to include Business & Professional, Consumer Magazines, Direct Mail, Outdoor&Transport and Cinema. Excludes directories
3.12 In local and regional newspapers there has been a particular structural shift in classified advertising revenue moving to online classified and search advertising. Classified advertising spend in regional newspapers (jobs, motors property etc) fell by 21% between 2003 and 2008, while on the internet it grew seven-fold to over £2.6bn by 2008.
Figure 8: UK Classified advertising revenues
3.13 Commercial radio advertising levels have consistently failed to keep up with the rest of the market over recent years, as radio display advertising has migrated to the internet. Industry revenues declined by 7% in 2008 and analysts predict that radio revenues will continue to decline in 2009, based on data available from trading statements. Some of this decline may be cyclical, but some of it is clearly structural, as advertising moves from traditional media to the internet. Our recent analysis of the sector (to be published in our Local Media Review) suggests that, if the most pessimistic forecasts of industry revenue are realised, many stations serving fewer than 700,000 people, could be loss making by the end of this year.
3.14 The effects of this structural migration of advertising revenues from traditional local media to online are being exacerbated by the current economic environment. Certain types of classified advertising revenues, (jobs, motors, property) appear to follow cyclical trends very closely, and are thus at particular risk during periods of economic downturn.
3.15 In our stakeholder interviews, local media companies expressed concern about the combination of structural and cyclical pressures on margins, and the impact this may have on the ability of firms to meet their business commitments in the short term, and to continue to invest in content creation in the long term. Recent results issued by some local and regional media companies reinforce these concerns.
· Johnston Press reported a 34.4% fall in total advertising revenues in the 19 weeks to 9 May;
· Trinity Mirror reported a 36% fall in advertising revenues in the 17 weeks to 26 April at its local and regional business.
· ITV plc reported a 15% fall in ITV family channel net advertising revenue in its May 2009 trading update.
3.16 In the radio sector, UTV Media Plc reported a 15% fall in its GB Radio stations division in the 4 months to the end of April 2009 in its May trading update
3.17 The short-term outlook for the economics of local media is dependent on the overall economic environment. Given the complexities of ongoing structural change, and continued uncertainty surrounding the economy, resulting in a wide range of forecasts, it is difficult to conclude definitively what the future trends for the economics of local media are with a high degree of precision. However, it is likely that the structural shift in advertising expenditure from traditional media to the internet will continue after the recession, suggesting that margins for traditional local media businesses may fall to a lower long-run steady state, with further pressures on cost efficiencies within the industry
The impact of newspaper closures on independent local journalism and access to local information
3.18 Very little objective evidence has been brought to bear in this area to date, so as part of our Local Media Review, we commissioned research into recent newspaper closures. Our analysis shows that out of 57 titles identified as having closed from the start of 2008 to February 2009, 49 were weekly free-sheets rather than paid for papers (see figure 9 below). Free-sheets typically carry less non-advertising content than paid-for papers, especially in relation to news content, and most of these occupied the second or third position in the local market. Of the remaining eight paid-for newspapers on the list, all of these were weekly titles. Half of these closures were in the context of a rival publisher having stronger titles on the market, two were a result of the same publisher having stronger titles in the area and the remaining two were a result of titles being consolidated or merged. None of the titles examined were dailies.
Figure 9: Local newspaper closures in the UK: January 2008 - February 2009
3.19 Recent closures also need to be seen in the context of a significant expansion in the number of titles during the 1980s - most of these free weekly titles, whose circulation rose significantly during the 1980s, taking advantage of growth in the advertising market. So far there is no evidence of large scale closures among dailies or paid weeklies
Figure 10 - Weekly regional/local newspaper circulation trends (billion)
Source: Advertising Association
How to fund quality local journalism
3.20 While funding for local newspaper journalism is clearly outside Ofcom's remit, our duties in relation to PSB - in particular, the provision of regional news on television and radio - mean we need to understand wider issues in relation to local journalism. We recognise the contribution and the ongoing role that the BBC may play in this area. We have also proposed the creation of Independently Funded News Consortia to ensure ongoing provision of regional TV news in addition to the BBC, and to create a strong platform for cross media local journalism in the future.
3.21 There are a wide range of platforms for the delivery of local journalism, including local and regional newspapers; local radio (both BBC and commercial); regional television (BBC and ITV1), some local TV, and the internet. However, around 80% of local journalists work in local newspapers and therefore developments in newspaper journalism have a direct influence on broadcasting, which often follows daily newspaper agendas. It is appropriate, therefore, to consider the local media ecology in its entirety when assessing the delivery of local journalism as a whole.
3.22 Figures from the National Union of Journalists suggest that more than 900 journalists have lost their jobs on local newspapers since July 2008. In our analysis, we estimate that 57 newspaper titles have closed since the start of 2008 to February this year (see above), and a number of district and local offices have shut as proprietors centralise operations in head office newsrooms. At the same time, the reductions to ITV's regional television news output have resulted in an approximate headcount reduction of 600, although not all of these are editorial staff.
3.23 However, looking at longer term trends, there is no evidence of either a structural or cyclical decline in the number of journalists employed. Figures from the ONS show that the number of journalists employed has fluctuated from year to year between 2003 and 2008, with no obvious trend to the data.
Figure 11: Number of journalists employed in UK (thousands)
Source: ONS Labour Force Survey 2003 - 2008. Note: Includes unpaid family workers and persons on government-supported training and employment programmes. Includes both full- and part-time workers
3.24 In our interviews we found that regional newspaper stakeholders are seeking to reduce the cost base of their businesses in response to the financial pressures the industry faces. However, despite the pressure to reduce costs, evidence suggests that there is a tendency to seek to reduce costs and headcount from non-core functions before seeking to make cost savings in the core function of newsgathering which we estimate accounts for a modest proportion of overall local and regional press cost (17%) in Figure 12.
Figure 12: Generic local press cost structure estimates
Source: Estimated from industry reports, stakeholder interviews and Ofcom analysis
3.25 Our discussions with local newspaper stakeholders suggest that one of the most important reasons for readers to buy newspapers is to read the news content. For this reason, job losses within the newspaper industry appear to have been concentrated on management; sales; administration and production. Many newspaper groups, including Trinity Mirror in South Wales; Johnson Press in central Scotland and Guardian Media Group in Manchester have closed outlying offices and centralised advertising and production functions in major newsroom hubs.
The appropriateness and effectiveness of print and electronic publishing initiatives undertaken directly by public sector bodies at the local level
3.26 This area lies outside Ofcom's statutory remit, and we are therefore unable to provide definitive comments as to the appropriateness and effectiveness of print and electronic communications carried out by public bodies at the local level. However, this topic was spontaneously raised by several stakeholders during discussions held as part of our Local Media Review.
3.27 We note that a range of public bodies, especially local authorities now produce quarterly, monthly, fortnightly or even weekly publications of varying formats, typically in magazine or newspaper format. A Local Government Association survey in early 2009 found that 95% of the 199 local authorities who responded to the survey had commissioned a regular publication. Councils in Wales, Northern Ireland and Scotland also publish newsletters and magazines which also look and feel like local commercial newspapers. These are distributed free of charge to local residents, raising concern amongst some, such as the Newspaper Society during stakeholder interviews. Stakeholder concerns relate to both advertising markets, where they are concerned at competition for advertising revenue from council publications and issues concerning the impartiality of council-produced content when reporting on council activities.
3.28 In London, some local authorities have invested in their own local newspapers. They say they fill a gap that is no longer filled by commercial weeklies; a lack of local newspapers was cited by 25% of the London councils in the LGA survey as a reason behind providing their own publication. Hackney Today, a publication by the local borough council, claims "the largest reach in the borough of any local paper". H&F News (published by the London Borough of Hammersmith and Fulham) includes sections on business, property, entertainment, and sport. The LGA reports that 28% of the authorities who responded to the survey took no advertising in their publications.
3.29 Apart from council-funded newspapers, public bodies are looking to find more cost-effective ways to advertise job vacancies. In Scotland a consortium of public sector organisations has created a single jobs portal (Myjobscotland). Local newspaper groups in Scotland told us that there was no evidence that this was a more efficient use of public money than advertising in local newspapers and indicated that some form of impact assessment would be in the public interest.
3.30 The Government has issued guidelines to public bodies concerning the use of the internet to disseminate public information, and as a result, local councils are making Increasing use of the internet to make information available to the public and to journalists. In particular, journalism related stakeholders have suggested to us in interviews that the Freedom of Information Act (FOI) enables them to obtain information from local public bodies more easily than in the past.
3.31 Some authorities, such as the London Borough of Camden are videoing their council meetings and placing them on their websites, in addition to publishing minutes and agendas of meetings
3.32 Preliminary conclusions from our consumer research suggest that residents use and value local authority websites to access factual information about public services in their area.
The role and effects of search engines and online aggregators on local media
3.33 Online local media is characterised by an often complex value chain in which several parties play a role in the creation and distribution of content to end users. These parties may include groups not traditionally associated with the creation of local content such as web portals (e.g. Yahoo Local), web hosting services (e.g. online video sites such as YouTube hosting local video content), and search engines.
3.34 During our Second PSB Review, Ofcom carried out research into the accessibility and discoverability of online public service content. While the research did not focus specifically on local online public service content, it suggested that search engines have a role to play in making content accessible to citizens and consumers. Search engines in particular were cited as the most commonly used way to access online public service content (89% of respondents).
Figure 13: Methods used to access online public service content
Source: PSB Review phase 2: Public Service Content and the internet, June 2008
3.35 Discussions with stakeholder interviews suggest that there are issues around the discoverability of certain community/ultra-local online content via traditional search engines, due mainly to the lack of scale of sites featuring such content. We note that stakeholders have suggested that emerging specialist local content search and aggregation services such as Localmouth.com and Hophive.com may have an increasing role to play in addressing issues around discoverability in the future, especially if these services can gain significant scale. Increased geographic targeting by online advertising networks may help to address some of the issues around monetisation of some types of ultra-local online sites. The BBC has also said that it may have a role to play in linking with community-based websites. This formed part of its proposal to launch 60 local video websites which was rejected by the Trust in 2008.
3.36 National online classified advertising sites such as Propertyfinder, Rightmove and Monster.com play an important role in the online mix. In certain sectors, specialist online classified sites account for the majority of online classified revenues - for example, our analysis suggests that specialist online recruitment sites account for 65% of all online classified recruitment revenues.
3.37 We note the ongoing debate surrounding the role of news aggregation sites and their use of content originated from other sites. Some parties have expressed concern that online news aggregation sites undermine the viability of news gathering by providing news content without investing in original news gathering. We also note however, arguments that that search engines and aggregation sites may play a key in aiding discoverability of local online content and directing traffic to online news sites.
The future of local radio and television news
Regional television news
3.38 Consumers regard regional television as their most important source of local news and information, ahead of newspapers - and regional news on Channel 3 continues to attract an audience share of around 20 per cent nationally (an average of 4-5 million viewers per evening), which represents significant reach and impact. Ofcom research for the Second PSB Review showed that audiences also value the plurality that is provided through the existence of ITV regional news alongside the regional news offered by the BBC. This was especially so in the devolved nations, but also in the English regions.
3.39 However, ITV plc has indicated it will not be able to deliver its regional news service to England and Wales beyond 2011. And in Scotland and Northern Ireland, stv and UTV respectively are also facing deficits on their PSB licences.
3.40 For this reason, Ofcom set out in its Second PSB Review a proposal for slots to be made available within the ITV network schedule, into which nations and regions news programmes delivered by outside consortia could be inserted. These programmes would be publicly funded through competitive tender.
3.41 We regard the continuation of a nations and regions news service on commercial PSB television as an important priority. The proposal for Independently Funded News Consortia is therefore the most important aspect of this submission. We consider it to be the most effective and impactful way to deliver a high quality regional service outside of the BBC.
3.42 Under the proposal, an awarding body would issue a tender for the provision of a news service within the existing ITV schedule. We would expect a range of media organisations to be interested in joining potential consortia, including news broadcasters, regional newspaper groups, local television stations, picture agencies or independent producers. The BBC has offered to make its regional resources available to ITV regional licensees in order to reduce their cost of delivering regional news and we understand that BBC resources would similarly be made available to potential consortia.
3.43 In England and Wales, one option would be to retain the current nine ITV plc regions to provide a service similar to that currently broadcast. However we believe that an enhanced option could deliver much more than the current service and in the process create a more sustainable basis for regional and local news delivery as a whole. Such an enhanced option could deliver:
· A quality television news service, providing plurality alongside the BBC;
· A range of news in nations, regions, cities and locally, through maximising the 'localness' (granularity) of the existing ITV transmission footprint combined with more localised television and video services, which would offer scope for a full cross media service, integrated into and contributing to the wider local media ecology;
· Clear and transparent set-up and operation, with independent funding; and
· Significant audience reach and impact.
3.44 Contracts would likely be based on the existing ITV regions but could be awarded through a national or regional tender process. Contracts would be awarded by beauty contest based on agreed levels of funding and awarded by an independent body (e.g. a new body designated by government, or the Ofcom Content Board, or BBC Trust).
3.45 The nature of the consortia may vary by region, depending on the characteristics of local media markets involved and the level of broadcast expertise available. For instance, in north-west England, a full cross media service supplied by a new consortium and including local television might be achievable relatively quickly. In other areas such as the east of England, this may take much longer to realise and more modest proposals might be more appropriate in the short term.
3.46 In summary, the enhanced proposal for Independently Funded News Consortia addresses the issues around provision of regional news, but also recognises some of the concerns around the ability of the wider industry to adapt to a cross media model.
3.47 Decisions on funding rest with Government and there are a number of other practical issues that are still to be resolved including:
· The nature and composition of an awards body or bodies
· The role of the host channel in the awards process and the level of editorial influence to be allowed thereafter
· Ongoing governance and compliance.
The extent to which it will be possible to achieve an enhanced local service is obviously also dependent on the level of funding available.
3.48 We have made a detailed submission to Digital Britain in relation to Independently Funded News Consortia and are awaiting the outcome of the final Digital Britain Report.
The future of local radio news
3.49 Local news is listened to by 84% of people who listen to local commercial radio on a weekly basis, more than other forms of content, including local weather (73%) and local travel news (60%)
Figure 14 : Types of content listened to on local radio amongst weekly listeners
Source: Ofcom research, fieldwork carried out by SPA in June 2008
3.50 Local radio is valued not just for news but also for 'softer' local content. Ofcom's qualitative audience research has identified two distinct types of local radio content, both of which are important to consumers:
· Core functional content comprising local traffic and travel, local weather and local news. This is of interest and importance to all listener types and seen as a crucial element of local radio output by the majority of listeners in all locations.
· Human, engaged local content, for example discussion of local community issues, local entertainment, and locally-themed chat shows and competitions. This varies in perceived importance depending upon the life-stage and personal tastes/needs of the listener. Thus community issues are of interest to the more community minded, or those in rural areas; phone-ins are important for older, speech radio listeners; sports coverage for sports fans etc.
3.51 As we highlighted in our two recently published submissions to Government, Radio in Digital Britain, and Building on the Myers Review, the central challenge for policy and regulation is to meet the public's demand for the local radio content they value, in a way which takes account of the financial realities faced by operators - so that regulation does not threaten the provision of the very thing it is designed to protect, localness - while at the same time creating an industry structure that could fit a digital future.
3.52 Currently, we generally require local news to be produced locally and broadcast during peak time (breakfast and drive time) by all stations, although the smallest tier of FM stations (those serving populations of less than 250,000) may be permitted to share broadcast hours outside of breakfast time.
3.53 In our submission Building on the Myers Review, Ofcom suggested to Government four alternative options for regulating localness on commercial radio stations serving populations of under 700,000
· The 'Local Impact Test' proposed in the Myers Review
· Focus on news, information and community notices
· A new 'Localness Charter'
· Liberalise current rules, and create a new set of mini-regions
3.54 It is likely that all four would involve a requirement for local news to be broadcast, but they differ in two respects:
3.55 The second option (focus on news) would see the requirements for news strengthened. This could be in terms of quantity of output, or specifications regarding what the output should be.
3.56 Each of the four options would likely result in a different balance between news and 'softer' content being struck, although it is difficult (particularly with the first option) to predict what that balance would be.
3.57 Where legislative changes are required for any of the options, Ofcom would need to consult on the detail of any changes to localness regulation within its powers. These would occur after publication of the Government's final Digital Britain Report, and the consultation would further inform our views and future regulation.
Opportunities for "ultra-local" media services
3.58 It is difficult to provide a precise definition of 'ultra-local'. Despite this, it is possible to identify a range of services which provide content and services to smaller scale geographic areas than those traditionally served by local press and BBC and commercial local radio services. A key characteristic of these ultra-local services is that they are often run by the targeted communities, offering a high proportion of user generated content.
3.59 Ultra-local media outlets are not a new phenomenon; the UK has long had a history of civic activism, with community groups, such as residents associations or parish councils, for example, publishing newsletters for their memberships. However, relatively recent developments have resulted in renewed opportunities for 'ultra-local' services in the UK.
3.60 Firstly, the development of accessible online content authoring and management tools, combined with increased internet usage means that the internet is playing an increasingly important role in the creation, distribution and consumption of 'ultra-local' content.
3.61 Secondly, legislation has created a new form of radio licensee with specific rules on providing services to underserved communities, which may include specific geographic communities, and on providing opportunities for discussion and the expression of opinion. Since 2005 Ofcom has issued over 200 community radio licences with 135 stations on air and is continuing to license new stations where possible. These stations serve a variety of audience needs within smaller catchment areas. They are non-profit in nature and are limited to raising no more than 50% of their income through advertising and sponsorship (though some face tighter restrictions on advertising due to overlap in their coverage areas with small commercial stations). While staffing costs account for the majority of the sector's costs, volunteers play an important role in the sector. On average each community radio station has 74 volunteers who give a combined total of around 214 hours volunteer time a week per station (an average of just under three hours for each volunteer a week).
3.62 There are several factors which lend Community Radio to providing 'ultra-local content. Firstly, constraints on the availability of spectrum in many places means that broadcast power outputs need to be relatively low, limiting the potential size of area served by the station. Secondly, the nature of community radio, i.e. that it is run by members of the community which it seeks to serve, lends relevancy, and local knowledge to output. Finally, Ofcom's regulation of Community Radio has a role to play in supporting the potential for 'ultra-local' media by supporting stations in following their key commitments, which through detailing both output requirements, and other station commitments around training, for example, helps to ensure that these stations deliver social gain to their immediate communities.
3.63 As the chart shows, general content for ultra-local communities accounts for the majority of the communities served by community radio stations.
Figure 15: Community radio stations on air by type of community served
3.64 Ofcom is continuing to license new community radio stations, which may provide 'ultra-local' content, aimed at the needs of the community which it seeks to serve. However, intensive use of spectrum in some parts of the country (particularly in certain urban areas) means that community radio stations are currently unable to be licensed in some parts of the country.
3.65 Given the diversity of the community radio sector, the online presence of community radio stations varies between stations. Many community radio stations, such as BCB 106.6 fm (a Bradford based station) make the service available to a wider audience via the web and via mobile. Depending on their resourcing and strategy, other community radio stations may differ in their approach to the internet and may have a significantly smaller online presence.
3.66 Press groups are also playing a role in the provision of ultra-local content, for example Northcliffe will start to rollout a network of hyperlocal sites from June, covering towns regarded as too small to have their own paper. While being owned by Northcliffe, much of the content will be provided by citizen journalists, and overseen by 'community publishers'. The mixing of professional and citizen-based journalism has also occurred in some local newspaper titles, where for example, amateur citizen journalists write a weekly column on their own village, providing a degree of hyperlocal coverage amongst professional journalistic content covering a larger geographic area. Other press groups, including Trinity Mirror have also launched hyperlocal sites.
3.67 Online community media also has a role to play in the provision of ultra-local content. Our discussions with stakeholders suggest that there are many sites run by community groups and volunteers. Compared with more traditional forms of local media, online offers community media relatively low barriers to entry in terms of funds, equipment and skills needed to get started (for example some 'ultra-local' sites use established blogging platforms and video hosting sites). The nature of web based content means that it is also suited to collaborative working practices, enabling the number of contributors to grow as the community group grows in size.
3.68 We are also studying developments in the US with interest. Major newspapers are closing down, (for example the Seattle Post-Intelligencer) and are being replaced by smaller online news services drawing on networks of citizen journalists, bloggers and local community websites.
Opportunities and implications of BBC Partnerships with local media
3.69 Partnerships between groups forms a part of the local media landscape. The BBC has the potential to be a major contributor to the growth of community media and recently announced its initiative to extend its regional news partnership proposals to other local media providers, including Independently Funded News Consortia and community media. The BBC has also said it will make its College of Journalism available to the general public. Several types of partnership between the BBC and other players have also been discussed. These include:
· A proposed partnership with ITV plc for the provision of regional news, later extended to other local media organisations,
· BBC-CSV partnership promoting volunteering and active citizenship through outreach and on air campaigns.
· Community Media Association - a Memorandum of Understanding was signed with the BBC English Regions in 2006, reflecting and building upon the relationships that some community radio stations had already built with the BBC.
3.70 In December 2008, the BBC published its Public Service Partnerships document in which it proposed partnerships in a range of areas including production (with specific proposals in relation to regional news), distribution of content, and 'enabling' partnerships (for example, sharing of training) with a view to supporting PSB beyond the BBC in the future. The BBC estimated that in total, its partnership proposals could result in an additional £120m/year value to PSB.
3.71 In relation to regional news, the BBC suggested that partnership with ITV could include:
· Sharing of raw news footage with other organisations
· Sharing of infrastructure in the medium-long term
3.72 The proposed BBC-ITV partnership in relation to TV regional news provision is unlikely to be put into practice given that ITV does not see it delivering enough benefits to secure ongoing regional TV news. In January 2009, Michael Grade wrote an article in the Telegraph discussing regulation and the commercial pressures the industry was facing. In relation to possible partnerships with the BBC, he wrote that "ITV and the BBC would share facilities, buildings and technologies across the UK - making commercially funded regional news much more cost efficient".
3.73 At the time of the signing of the MOU between the BBC and ITV plc on 12 March 2009, ITV plc estimated synergies of £1.5m/year in 2011, rising to £7m/year by 2016. The MOU covered three main areas for the partnership
· Sharing of newsroom and studio facilities in England, and co-location of regional news services in Cardiff
· Sharing of some regional news picture gathering resource
· Establishment of a pool of pictures available to both the BBC and ITV plc, with ITV plc also gaining access to certain raw feed material
3.74 At the Westminster Media Forum on 24 March 2009, ITV's director of news, current affairs and sport, Michael Jermey stated that ITV had concluded that initial savings to ITV plc of £1-2m/year meant that "We have therefore reached the conclusion that the benefit of a BBC partnership would not be sufficient in itself to provide a viable, guaranteed future for news in the nations and English regions".
3.75 In any partnerships involving the shared use of content, it is likely that agreements would need to be struck between the BBC and the other partner as to the nature of the content that is shared, and how the content is used by the other party.
3.76 BBC partnerships are active in the community radio sector, where the partnerships have given community radio stations access to BBC journalism training, technical training, use of specialist equipment, and staff secondments from the BBC. As the nature of these partnerships differs substantially differ between areas and groups, some examples of BBC partnerships with community radio stations are outlined below.
· Training - Pure FM, a Stockport based community radio station benefited from the BBC Manchester Community Radio Bootcamp, in which 11 volunteers attended workshops on presenting and script writing. ALL FM in Manchester's partnership with BBC Learn for Real has included a masterclass on programme ideas with BBC producers and a mentoring scheme for volunteers , and all staff and volunteers at Insight Radio, a community station in Glasgow have received training from BBC staff in a range of areas
· Use of specialist equipment - Southall community radio station Desi Radio used BBC London outside broadcast facilities to run a show at the London Mela 2007
· Secondments - In addition to use of BBC outside broadcast facilities, following a trial one day a week secondment by a BBC London 94.9 journalist, a tri-media BBC journalist from BBC London became based at Desi Radio
3.77 The BBC partnerships may also benefit the BBC, with community radio volunteers being a potential pool of talent from which the BBC can draw. For example, a volunteer from Bristol community radio station BCfm was given a regular show on BBC Radio Bristol, and a volunteer from Forest FM became a weather and traffic presenter on BBC Radio Solent.
3.78 We are currently in dialogue with the BBC and the BBC Trust regarding the BBC's role in the local media ecology.
Incentives for investment in local content
3.79 As consumer research suggests, audiences appreciate and value localness in content, with 90% adults consuming some form of local media, suggesting that the market provides an incentive for continued investment in local content. During interviews local media companies have consistently indicated ongoing interest in continued investment and development in their online services in recognition of the structural shift in advertising revenues towards the internet, and to reach a wider audience. Examples of this includes increasing the range of content carried on websites (for example, the Newbury Evening News website www.newburytoday.co.uk produces a daily video news bulletin) or local media groups setting up their own online classified advertising sites.
3.80 The proposed creation of Independently Funded News Consortia may provide an additional incentive for investment in local content via a market intervention. In this regard the competitive funding aspect of Independently Funded News Consortia is important, given the role that levels of investment in local content may play in determining the successful bidders to provide services.
3.81 There is currently little local TV in the UK, in contrast to a range of other European countries, in part due to the uncertainties surrounding the economics of commercial local television. Recent analysis conducted during Phase 3 our Second PSB Review shows that even city-based local television may not be profitable outside the major markets of London and Manchester. There are currently only four local TV stations broadcasting on terrestrial TV (Channel M in Manchester; MATV in Leicester; Northern Visions in Belfast; and York TV). All carry news in some form. We also note the potential role for community involvement in local television services.
3.82 Digital switchover and the digital dividend may create an opportunity for the further development of local TV services in the UK. In particular, our current policy of releasing geographic interleaved spectrum via a technology neutral auction process may act as a catalyst for new investment in local digital terrestrial TV services in a range of locations around the United Kingdom, potentially leading to a network arrangement. Work is ongoing in this area, and we intend to release a further consultation in relation to the digital dividend later in 2009.
The extent of plurality required in local media markets
3.83 One of Ofcom's principal duties in carrying out its functions, as provided by section 3(2)(d) of the Act, is to further the interests of citizens and consumers by securing "the maintenance of a sufficient plurality of providers of different television and radio services."
3.84 While issues around a wide range consumer choice and access to quality content are important, we believe that plurality has a value in its own right from the citizen perspective. Plurality has a key role to play in helping to promote active citizenship, supporting accountability and strengthening democracy. Plurality supports these desirable outcomes by providing a framework in which informed citizens can fulfil their role in a modern liberal democracy.
3.85 Our consumer research also indicates that consumers value plurality, seeing benefits primarily in terms of choice and quality of content.
Plurality in television
3.86 In Phase 1 of our Second PSB Review, we published consumer research which highlighted that participants felt that plurality of media provision helped meet the need to cater for different tastes and interests and to provide different viewpoints.
3.87 The research also highlighted that participants saw competition for quality as a crucial benefit of plurality, and that competition could deliver a number of benefits including high quality programming, impartiality and accountability.
3.88 The research shows that audiences value plurality in programming at both a national and regional level. For example, 73% of respondents felt that it was important that more than one of the main channels provides current affairs about their nation or region; and 65% felt that it was important that there was plurality in other programmes about their nation or region
Figure 16: Plurality of programming: How important is it that more than one of the main channels provides XX programme type?
Source: PSB Quantitative Research, Q34, 2,260 UK adults aged 16+, Ofcom October - December 2007
3.89 Our final statement for Ofcom's Second Public Service Broadcasting Review: Putting Viewers First sets out recommendations to ensure that the interests of citizens and consumers can continue to be fulfilled through ongoing production and availability of a choice of content that delivers the purposes of PSB.
3.90 One of those recommendations was to take forward work by doing more detailed analysis of the issues regarding provision of public service content (PSC) at a local level across all media including radio. This is being taken forward through research being carried out as part of the Local Media Review.
3.91 In the case of local radio, a plurality of station owners is currently secured directly by the radio-specific media ownership rules and indirectly by the application of competition law. For example, in the most recent large radio group merger, of Global Radio UK Limited and GCap Media plc, the merged entity divested a number of stations in the Midlands due to competition law issues and the media ownership rules. This sense of plurality is important for the democratic concerns around 'concentration of voice' in local radio markets. (In addition, holders of commercial radio licences cannot hold community radio licences.)
3.92 From the consumer perspective, however, questions of diversity on local radio may be more salient than those of ownership plurality. Radio stations in a given local market tend to be differentiated by their formats (which regulate a number of aspects of their content) rather than by their news offering. Diversity in this sense is important for the choice it gives consumers, rather than for the more citizen-oriented concerns around 'voice'.
Research into plurality is being carried out as part of the consumer research for the Local Media Review
3.93 A programme of primary consumer research has been conducted as part of the Local Media Review to build upon Ofcom's existing evidence base in relation to local media. Some of this ongoing research relates to consumer attitudes to plurality at the local level. To build a thorough and wide understanding of consumer attitudes to plurality across the UK, Ofcom is conducting both quantitative research (25 minute face to face interviews) and longer qualitative research (3 hour deliberative group sessions in 8 locations across the UK). By combining the results of these two surveys, we hope to build up a robust view of UK consumer attitudes towards plurality in local media.
3.94 The quantitative research is representative of UK adults aged 16+ and asks questions relating to attitudes to media ownership, including attitudes to single ownership within sectors and cross sectors. This enables us to identify headline attitudes towards plurality across a large sample size, enabling comparisons to be drawn between different regions of the UK.
3.95 The qualitative research focuses on gaining a deeper insight into attitudes towards plurality and cross media ownership. The use of deliberative groups enables us to obtain considered views and attitudes towards the value of local media, plurality and trust and the reasoning behind these attitudes. The focus groups have been held in a range of locations throughout the UK, including the devolved nations. Our research into the availability of local media in these locations enables us to place the focus group discussions in context.
3.96 The findings of our consumer research across a range of issues will be published as part of our Local Media Review.
The desirability of changes to the regulatory framework for print and electronic local media, including cross media ownership and merger regulations
3.97 Print and electronic media are regulated in a number of different ways.
3.98 Ofcom has a range of statutory duties which relate directly or indirectly to the local media sector. Ofcom's remit in this area is set by the Act, and specifically by the provisions in the Act concerning PSB, radio, the media ownership rules and the public interest test in relation to media mergers. The Broadcasting Act 1990 also gives Ofcom duties and powers relating to local radio.
3.99 Ofcom's principal duty in carrying out its functions is to further the interests of citizens in relation to communications matters and to further the interests of consumers, where appropriate by promoting competition.
3.100 In carrying out this duty, Ofcom is required to secure a number of things including:
· the availability throughout the United Kingdom of a wide range of television and radio services which (taken as a whole) are both of high quality and calculated to appeal to a variety of tastes and interests; and
· the maintenance of a sufficient plurality of providers of different television and radio services.
3.101 Significantly, amongst others, Ofcom must take into account the different interests of persons in the different parts of the United Kingdom, of the different ethnic communities within the UK and of persons living in rural and in urban areas.
3.102 Ofcom must also ensure that television and radio broadcast services meet minimum standards of taste and decency.
3.103 Responsibility for the merger regime lies with the OFT, though Ofcom has an advisory role in relation to mergers in markets where we have particular knowledge or insight. Ofcom also carries out the "public interest test" and reports to the Secretary of State if the Secretary chooses to intervene in a media merger (see further below).
3.104 Ofcom is not responsible for the regulation of newspaper print and online content, which is overseen by the Press Complaints Commission.
3.105 PSB: relevantly, the legislation requires Ofcom to include positive content requirements in the individual Channel 3 licences requiring a minimum commitment to provide high quality regional news and regional non-news of particular interests to persons living within each Channel 3 licensed area.
3.106 Radio: Format and licensing controls define localness in terms of content, where stations can be based and where some programmes should be made. This is designed to keep content local and contributes to plurality of formats. Community radio has its own set of format requirements and restrictions on advertising.
3.107 Television and radio broadcast content: these are subject to the Ofcom Broadcasting Code which covers standards in programmes, sponsorship, fairness and privacy, including standards of taste and decency (e.g. standards to protect the public from harmful and/or offensive material to protect the under-eighteens).
3.108 Media ownership rules: Ofcom has a duty to review the operation of the media ownership rules and make recommendations for any changes to the Secretary of State at least every three years. In summary, local cross media ownership rules restrict cross ownership of Channel 3, radio licences and local newspapers within a given local area. Radio ownership rules place detailed restrictions on ownership of radio stations and multiplexes at a local level, as well as restrictions on ownership of national digital multiplexes.
3.109 Media merger regime: The Secretary of State may intervene in media mergers (including mergers involving newspapers) and can take public interest considerations beyond competition law into account, especially in relation to ensuring promoting plurality in a range of views. Ofcom carries out the public interest test and provides a report on its recommendations to the Secretary of State
The Media Ownership Rules
3.110 The local cross media ownership rules restrict ownership in three ways:
· Regional 3 Licence and local newspapers
A person may not acquire (directly or indirectly) a regional Channel 3 licence if they run one or more local newspapers that have an aggregate market share of 20% or more in the area covered by the regional Channel 3 licence;
· Local analogue radio licences, local newspapers and regional 3 licences
These restrictions are based on the points system for radio licences which underpins the radio ownership rules. This allocates points on the basis of coverage overlap.
In an area where there are three or more overlapping local radio analogue licences, a person who owns one or more local newspapers with a market share of 50% or more in the relevant coverage area, or the holder of the regional Channel 3 licence, may become the holder of one or more of those radio licences only if the points attributed to the licences held by that person would not account for more than 45% of the points available in the area.
· Local analogue radio licences, local newspapers and regional Channel 3 licences - No one person may hold at the same time:
o a local analogue radio licence; and
o a regional Channel 3 licence with a potential audience that includes 50% of the audience of the analogue radio service; and
o one or more local newspapers which have a local market share of 50% or more in the local coverage area
3.111 As said, Ofcom has a statutory obligation to carry out reviews of the operation of all the media ownership rules (including the local cross media rules) at least every three years. We must report our findings to the Secretary of State, including recommendations to amend or repeal any of the rules (if any). Our next report is due no later than 13 November 2009. After we make our recommendations it is up to the Secretary of State to decide whether to seek changes to the rules by secondary legislation.
3.112 We intend to publish a Consultation Document on our review of the media ownership rules in early summer. An important focus of the review will be the local cross media ownership rules and whether it may be desirable to change them.
3.113 The rationale for the media ownership rules is to help to ensure that citizens have access to diverse viewpoints in news, information and opinion so that they can participate in the democratic process in an informed way. The aim of our review is to assess whether, in light of current changes, the current rules remain fit for this public policy purpose.
3.114 A key question for our review of the local cross media ownership rules will be to determine whether the rules still strike the correct balance between the citizen goal of diversity of viewpoints and the goal of allowing companies the freedom to maintain sustainable business models (and thereby have a basis for delivering higher quality programmes, greater creativity and more risk-taking).
3.115 Two of the key issues we will therefore look at to determine our views on the local cross media ownership rules are:
· Are the rules outdated because consumers and citizen behaviours have changed? For example, because consumers have access to viewpoints from other media sources, such as the internet?
· Are the rules acting against the interests of consumers by limiting companies' freedom to survive, consolidate and invest?
3.116 As Section 3 demonstrates, our initial evidence indicates that the way in which people consume local media is changing. However, there is still strong reliance on traditional media for local news. A key issue for our review will be to understand consumer trends in more detail.
3.117 As we have also set out in Section 3 local media is facing financial pressures. A key issue for our review will be determining how the rules may impact on traditional media business models and behaviour at the local level.
3.118 We are currently gathering further evidence to inform our views on this, which the consultation process will further inform our views on. Much of our evidence will come from the work which is being done as part of the Local Media Review, which is looking at changes in consumption patterns of local media and the structural and cyclical challenges facing traditional media at the local level.
3.119 Ofcom's role with respect to the merger regime is limited. The Secretary of State may choose to intervene in a media merger where he considers there may be "public interest" considerations including plurality. If the Secretary of State does this Ofcom carries out the "public interest test" and reports to the Secretary of State. We also have an informal role providing the OFT with data and advice on mergers in markets where we have particular knowledge or insight given our role as sectoral regulator.
3.120 As part of our review of the media ownership rules we will be considering the operation of the "public interest test" but it is not within the powers to review the operation of the merger regime more generally. As the Committee would be aware, following the Digital Britain Interim Report, the OFT is currently undertaking a review of the local and regional media merger regime including considering whether it is sufficiently flexible to allow business models to manage the transition to the digital age. The OFT will decide whether any legislative changes are needed to the merger regime. Ofcom is feeding into that review.
 Ofcom research, fieldwork carried out by SPA in June 2008
 Source: Ofcom research, fieldwork carried out by SPA in June 2008
 Source: Ofcom research, fieldwork carried out by SPA in June 2008
 Section 3, Ofcom's Second Public Service Broadcasting Review - Phase 2: preparing for the digital future, Ofcom, September 2008
 Survey of local authority newsletters/magazines 2009, Local Government Association, May 2009
 Figure 10, 'The Public's attitude towards plurality', Ofcom's Second Public Service Broadcasting Review Phase 1: The Digital Opportunity, 10 April 2008, p. 35.
 PSB Review Phase 1, as above, p. 35.
 Ofcom's Second Public Service Broadcasting Review: Putting Viewers First, Statement, 21 January 2009.
 PSB Review: Putting Viewers First, Statement, p.102-103.
 See http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/Global_GCap.pdf.