Memorandum submitted by the Radio Authority
1. The Radio Authority welcomes the opportunity to give oral evidence to the Committee on Thursday 23 May. We hope that it may be helpful to the Committee to have this preliminary memorandum in advance, setting out those issues which the Radio Authority regards as pertinent at this stage.
2. In its general approach to the establishment of the Office of Communications (OFCOM) the Radio Authority advocates the following key principles:
that OFCOM shall be a modern, flexible, non-monolithic body capable of ensuring world class regulation for broadcasting, telecommunications and spectrum management;
that the momentum of the legislative process, and the parallel design of OFCOM shall be maintained;
that OFCOM should be so organised that it can deploy specific and appropriate regulation to radio, rather than imposing television or telecom solutions on this distinct medium, and giving radio full and proper attention so that the regulation of this medium does not become a "Friday afternoon job";
that, given Government decision to remove many restrictions on the ownership of broadcasting licences, including especially the prohibition on non-EEA ownership, every care should be taken to ensure that OFCOM has appropriate duties and sufficient powers to protect the quality and key characteristics of UK broadcasting, and in the case of local and regional broadcasting, to guarantee a proper service to those localities;
that OFCOM shall have appropriate powers in respect of the BBC to ensure that the value of converged regulation is not lost by leaving key matters affecting a major player in the broadcasting market outside the scope of that regulation.
3. POLICY ISSUES
The Radio Authority is pleased that Government has accepted our recommendation to extend the length of analogue radio licences from eight to twelve years. We also endorse the decision that licences should continue to be competed for at the end of their duration, but that the fast track re-advertisement procedure should be retained and extended to all local licences, including the London-wide licences which were previously excluded from this approach. We welcome the decision to abolish separate cable and satellite licences, replacing them with a single new radio licensable content services licence.
We had urged on Government that cable and satellite radio services did not need separate licences, and we have noted the potentially deregulatory power allowing the Secretary of State to do this if it appears that separate licensing is no longer needed. We are pleased that the Bill continues to promote and support the growth of digital radio (Digital Audio BroadcastingDAB) in which the UK is authentically the world leader. However, some further slight modifications will be needed to ensure that the digital industry is not needlessly hampered by regulation.
(b) Programme Formats
Government has accepted the case put forward by the Radio Authority for some further relaxation, in order to make it easier for licence holders to respond to local expectations and to allow OFCOM to engender further competition in well-developed major markets. We are encouraged by the power proposed for OFCOM to review the onward sale of local licences, to reduce the risk of new owners moving to the middle ground of public tastes and thereby reducing programming diversity in local markets. However, we continue to hold the view that the regulator needs a specific power to prevent such onward sales, during the first year or so after a licence is awarded, if the integrity of the licensing system is to be protected.
We strongly welcome the Government's endorsement of the proposals developed jointly by the Radio Authority and the Commercial Radio Companies Association to liberalise ownership rules for local commercial analogue licences. These involve doing away entirely with nation-wide limits on licence ownership, leaving these matters solely to the competition authorities. In each local area, the formula that we have jointly proposed, that there should be a minimum of three owners plus the BBC in mature markets, is to be adopted. That would ensure a sufficient plurality of ownership, a safeguard which will be especially important given the removal of restrictions of foreign ownership on such licences. We note that the Government is adopting this "three plus BBC" approach for cross media ownership between newspapers and local radio and television companies and local radio, and that by implication it also underpins the approach to concentration of ownership within television where there will be at least three separate owners of network services plus the BBC. We believe that this approach is straightforward, transparent, fair and effective.
We welcome the fact that Government proposes to address the anomaly in the Broadcasting Act 1996, under which religious organisations are not allowed to hold a digital sound programme service in a local area. Government has correctly concluded, however, that the severe limitations on available spectrum mean that legislation should continue to preclude religious bodies from owning national radio licences.
We note the Government's proposals to abolish all rules on foreign ownership. As the policy narrative accompanying the draft Bill makes clear, this will place greater emphasis on ensuring national and local content in broadcasting. We therefore welcome the statement that OFCOM will have a duty to promote and protect the local content and character of local radio, and that the new regulator will have a continuing duty in respect of the quality of broadcast output.
(d) Access Radio
We are heartened by the support and impetus that Government has given to our proposal for the creation of Access Radio, a new third tier of radio services to be established on a not for profit basis, designed to provide specific social gain in local communities. With Government's agreement, the Radio Authority is undertaking a range of experiments through fifteen pilot projects which are being launched this year, most of which are already on air. Access Radio would be distinct from commercial and BBC local radio, providing opportunities for those in local communities to have access to the making of radio, and deploying the medium for demonstrable social purposes. The experiment is the subject of independent evaluation. However, it is already clear that, for the successful implementation of Access Radio, OFCOM will need to exercise its powers to deploy FM frequencies from within the BBC's national and local sub-bands, as well as the ILR and INR bands.
We are particularly pleased to see, in the Policy Narrative accompanying the Draft Bill, confirmation from Government that the principles of the Transfer of Undertakings (Protection of Employment) Regulations will be followed in respect of OFCOM, together with principles of the Fair Deal on Pensions. This will be crucial in ensuring that OFCOM has a good supply of high-quality experienced staff and to maintain business as usual for the existing regulators in carrying out their statutory tasks during the next year or two. We urge that draft clauses to give effect to this undertaking are prepared as a matter of urgency and should be available for scrutiny by the Joint Committee.
5. DETAILED DRAFTING
The Radio Authority hopes to offer the Committee detailed drafting suggestions in due course.