Memorandum submitted by the Commercial
Radio Companies Association (CRCA)
Noteall references are to the Policy
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 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
over 75 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
1. The draft Communications Bill applies
disproportionately detailed regulation to radio ownership:
we believe that it is inconsistent
to impose a complex points system to control local radio ownership
within a draft Bill which has such a deregulatory approach to
ownership of other media;
however, we support the government's
wider objective of ensuring thre elocal media owners within each
2. The draft Communications Bill threatens
a more regulatory regime for radio in the future:
the role of the Content Board should
not go beyond the BSC's existing role in determining acceptable
standards or the Radio Authority's duty to establish and monitor
radio stations' "formats";
OFCOM's new duty to "promote
and protect local content" begs the question of who will
define such content and charcter: regulators, broadcasters or
3. Access Radio will only add something
new to the radio ecology if it is funded in a new way. To allow
it to source commercial funding would enable it to become little
more tha publicly subsidised commercial radio.
4. CRCA congratulates the government on
a draft Bill which is radically deregulatory in much of what it
proposes. In particular, we commend the introduction of communications
regulation that, for the first time, recognises the value of competition
powers in controlling media ownership, thus dispensing with the
need for complex point systems.
5. However, the draft Bill's deregulatory
approach is not even-handed across all media. It does not do sufficient
to reduce the likelihood of content micro-regulation and the CRCA
Board believes it over-regulates radio ownership.
6. CRCA believes that subjecting radio to
a complex local points system is inconsistent when considered
alongside the draft Bill's removal of all foreign ownership restrictions,
its complete deregulation of cross-media ownership (bar a handful
of key rules) and its decision to leave to competition law the
possibility of a single ITV owning Channel 5. The draft Bill's
continued loyalty to such a detailed radio ownership scheme, which
was developed over a year ago, ignores the further recommendations
for deregulation which CRCA has made during 12 months which have
advanced the ownership debate considerably.
7. We recommend that the draft Bill's objective
of ensuring there are at least three owners of local media be
adopted as the Bill's central local ownership policy, leaving
sectoral specific controls to competition powers.
8. While we are concerned by the inconsistent
approach that the draft Bill takes to ownership policies across
different media, we recognise that this may be a consequence of
amalgamating sectoral drafting. We therefore hope that a more
even-handed approach to radio regulation and ownership rules will
be applied in the Communications Bill itself.
9. We welcome the removal of restrictions
on foreign ownership of UK media companies (9.3.1). However, we
strongly urge the government to seek reciprocity from foreign
governments to ensure that UK media is better able to expand overseas.
National & UK-Wide Radio Ownership
10. We welcome the relaxation of national
radio ownership restrictions (188.8.131.52) and the abolition of the
points system that restricts UK-wide ownership of local radio
Local Radio Ownership
11. We are pleased in principle that the
Bill recognises the need for local radio ownership relaxation
by including the 3+1 formula, which CRCA had previously agreed
with the Radio Authority (184.108.40.206).
12. However, we are disappointed that the
further relaxation we were encouraged to propose in the government's
consultation document has not been acted on, particularly in light
of the overall deregulatory nature of the Bill's wider ownership
13. In particular, given the statement in
the legislation that local press and TV are the two most important
local media (9.4.4), it is difficult to understand why radio now
has the only sector-specific local restrictions in the legislation.
14. It is over a year since we were strongly
encouraged to seek consensus with our regulator in the matter
of local radio ownership. Since then there has been significant
change in the broadcasting and telecommunications sector, change
which has been reflected in an enabling and deregulatory draft
Bill. Radio has, in contrast, not moved on, and remains at the
mercy of a complex points system.
15. In light of the relaxations afforded
to TV and newspapers, we cannot see why radio should still be
subject to single medium local ownership rules.
16. We believe that local plurality will
be sufficiently protected by the combination of competition powers
and a scheme to ensure there are at least three local media owners
in each market (see below), without imposing radio-specific rules.
Local Cross-Media Ownership
17. Consistent with the Bill's wider principle
of ownership deregulation combined with a small number of key
rules to protect plurality, we support the proposal (9.4.2.c.iii)
that there should be three local media owners in each market.
This is a simple but powerful concept which, when twinned with
competition rules, will deliver local plurality.
18. We believe that it is proposed to deliver
this objective by building cross media rules on top of the (3+1)
local radio points scheme (9.6.2). However, further clarification
is needed since neither Policy Narrative nor the recently-published
draft Ownership Clauses contain sufficient detail.
19. Regardless of what is currently proposed,
we believe it is possible to secure the objective of three local
media owners with a simple mechanic which would not be dependent
upon the radio ownership scheme for its foundations. We are currently
developing such a mechanic.
Ownership of Local Radio by Other Local Media
20. We do not support increased regulation
of local radio ownership by local press (and its corresponding
application to ownership by local TV stations) (220.127.116.11).
21. There is no evidence to suggest that
allowing a local newspaper to own a local radio station has any
adverse effect on the accuracy or impartiality of radio output.
Indeed the Radio Authority has confirmed that its available records
contain no complaints on impartiality or accuracy matters relating
to such ownership arrangements.
22. Additionally, the draft Bill reminds
OFCOM of its duty to continue to maintain impartiality and accuracy
in radio output, as the Radio Authority has done in the past (9.10.6).
23. We can therefore see no reason to impose
press/radio specific ownership restrictions beyond the rule to
protect local plurality by ensuring there are at least three local
media owners in each marketplace.
24. We commend the proposed duty on OFCOM
to ensure that unnecessary regulatory burdens are neither imposed
25. However, we believe that this is at
odds with the comparatively high levels and detail of regulation
that the Bill proposes to apply to radio. We believe that the
proposed increase in subjective controls such as format variations
upon change of control and what appear to be new powers for OFCOM
to determine local content and character, runs contrary to the
draft Bill's deregulatory intentions (18.104.22.168).
26. We support the proposal (5.2.3) that
OFCOM should have a similar obligation to that imposed upon the
FSA where any increase in regulation needs to be preceded by a
27. The proposed duality of competition
powers between OFCOM and the OFT threatens to maintain the "double-jeopardy
from multiple regulators" which the Secretaries of State
have said this Bill should bring to an end.
28. Certainty for industry is essential.
The Communications Bill should give clear direction that OFCOM's
views will be in the ascendant in matters of communications competition.
OFCOM's understanding of the wider communications market will
ensure that such adjudications appreciate issues of market convergence
rather than being based on outdated single sector concerns.
Radio in OFCOM
29. CRCA recognises that the pace and nature
of radio licensing requires a strong team of radio experts to
undertake it, just as it does now within the Radio Authority.
However, such a team would sit well within an overall licensing
department, and the need for such department-specific radio specialists
is not justification for subjecting radio to an inappropriate
regulatory structure within a converged, deregulatory body.
30. OFCOM must be a wholly converged regulator
if it is to oversee a converging industry. At a time when radio
listening is increasing (as television viewing declines) and given
the industry's importance as an advertiser and employer,
consigning radio to a solo silo would be wholly inappropriate,
not least because regulators concentrating on a single medium
might be tempted to micro-regulate. Radio should enjoy full status
within OFCOM, being represented at the highest level within the
organisation and appropriately within each department.
The Content Board
31. We are uncertain about aspects of the
proposed new Content Board. As a mature and responsible industry,
we should not be subject to an interfering style of regulation:
one which might forget that, in the end, listeners are often the
best regulators, judging the quality and suitability of output
or device better than any watchdog. We believe listeners will
punish broadcasters who dare to provide poor quality programming
by using the "off" or "re-tune" switch.
32. We support the continuation of the BSC's
role in determining acceptable broadcasting standards and ensuring
fairness. However, the term "content" implies something
quite different from "standards". A radio station's
"content" is defined by the format (promise of performance)
which is agreed (and should continue to be agreed) with the regulator.
Content regulation which goes beyond the BSC's existing codes,
current advertising and programme impartiality and accuracy safeguards
or the format restrictions imposed in radio licences would be
an unwelcome increase in regulation.
33. The Policy Narrative makes clear that
OFCOM will have new powers "to promote and protect the local
content and character of local radio" (22.214.171.124). In the face
of massive competition from other local and national commercial
and BBC stations, competition for local audiences is fierce and
local stations dare not compromise their local appeal. In such
an environment, it is illogical to suggest that a regulator is
better placed to determine what comprises local content and character
than those working daily within the community.
34. We are concerned that the draft Bill
does not preclude OFCOM from enabling Access Radio to source at
least some of its funding from commercial sources (8.4.2). Whilst
we are generally in favour of expanding the radio sector, we are
wary of this initiative's potential to become publicly subsidised
35. Access Radio must be a wholly new sector
of radio, both in its structure and funding. To enable it to access
commercial revenues would both undermine its own social-action
objectives and threaten the smallest and most community-focused
commercial radio stations.
36. Given the increased number of services
available, we can see no reason to impose greater restrictions
on digital sound services than on analogue local radio stations.
We therefore propose that digital sound programme services should
be included within a three-local-media-owners rule.
37. We recognise the important and influential
role that multiplex owners have and agree that there should be
multiplex ownership rules. We recommend changing the proposed
rule limiting each company to ownership of one multiplex per area
(126.96.36.199) to one that ensures that there are at least two owners
of multiplexes in each market large enough to accommodate them.
This would be future-proof in the event of more spectrum becoming
available thus allowing markets to contain more than two multiplexes
without all of them having to be separately owned.
38. We welcome the lengthening of analogue
radio licences from 8 to 12 years (188.8.131.52).
39. In addition, we recommend that analogue
services already rolled in return for participation in digital
services, merit a further roll at the end of the current analogue
licence period. The rate of digital radio take-up of has been
slower than anticipated. Income from analogue broadcasts will
continue to subsidise digital activity for some time to come.
Changes to Licences
40. We welcome the introduction of two new
circumstances in which a radio station's licence may be altered
where a departure would be conducive
to maintaining or promoting fair competition; and
where there is significant support
for the change.
Onward Sale of Licences
41. The draft Bill seeks to prevent a change
of control leading to a move towards a middle ground of national
taste (184.108.40.206). With a 77 per cent share of local radio listening,
in the face of ever-increasing competition, commercial radio sees
little evidence of such an erosion of local character.
42. The draft Bill also seeks to protect
the character, range and quality of local radio in the face of
ownership changes (220.127.116.11).
43. It suggests that both these dangers
can be prevented by empowering OFCOM to change a radio station's
format in the light of a change of ownership control. At the moment,
the Radio Authority may only prescribe a tightening of a station's
format, or a clarification to output or editorial arrangements
when ownership changes are subject to a public interest test.
44. These content protection objectives
are already met by the "format" system. Tightening or
altering a format for a new owner of a licence already issued
is not the proprietor-neutral regulation that we have been told
this Bill intends. Neither does it achieve the intended certainty
45. We believe that a five-fold increase
in fines is excessive (18.104.22.168).
46. We believe that OFCOM's complaint handling
role should be backstop only. CRCA recommends that, while OFCOM
should approve and review relevant codes, it should direct all
complaints in the first instance to the licensee concerned (8.5.2).
8 Broadcast radio employs more people than TV (23,200
people as opposed to 20,200 people) Skillset 2001. Back
RAJAR Q1, 2002. Back