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Broadcasting Bill [H.L.]

3.57 p.m.

The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Inglewood.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Ampthill) in the Chair.]

Lord Desai moved Amendment No. 143:

Before Clause 62, insert the following new clause--

Amendment of the Broadcasting (Restrictions on the Holding of Licences) Order 1991

(".--(1) The Broadcasting (Restrictions on the Holding of Licences) Order 1991 is amended as follows--
(2) In section 12 subsection (3) for "two" there is substituted "three".
(3) In section 13 subsection (1) for "hold a licence" there is substituted "hold more than one other licence".
(4) In section 13 subsection (1) for "holder of a licence" there is substituted "holder of more than one other licence".

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(5) In section 13 subsection (2)(a) for "for which the service" there is substituted "for which a service".").

The noble Lord said: Amendment No. 143 stands in my name and is grouped with Amendment No. 156 which stands in the name of the noble Baroness, Lady O'Cathain. I trust that the noble Baroness will speak to her amendment and I shall speak only to mine.

At the heart of the Bill is a correct philosophy that in the world of today's technology and competition we need powerful British companies which can compete internationally. Therefore, certain restrictions imposed on television companies as regards licensing and on other media companies as regards cross ownership have rightly been lifted. My amendment addresses the issue of local radio stations being treated unfairly, or asymmetrically at the very least, in this respect.

The restrictions on local radio stations having more than one FM station have not been lifted.

Members of the Committee will remember that there is a restriction on local radio stations not owning more than one FM station. That was not in the Broadcasting Act 1990 and nor is it in this Act. But that was put in place by an order and because it was an order, my amendment refers to that order.

The situation is very simple. An independent local radio station may have an FM station and an AM station. Since those independent stations were able to have two wavelengths, the Gold station has been transmitted on AM and current news and so on transmitted on FM. In the spirit of the Broadcasting Bill, it would be quite right to allow radio stations to be able to bid for two FM wavelengths. That will enhance the quality of transmission of the programme and it is quite clear that AM is a technology which is less preferred than FM by many transmitters. That seems to me to be a straightforward argument. We wish to be able to allow our radio stations to have two FM wavelengths.

It may be said that having one radio station with two FM transmitters could restrict competition and that we would not have diversity. It is almost a well known result in many of these industries that if different owners have the same kind of channel, there is a great deal more uniformity of service rather than rivalry. If you do not believe me, go to Heathrow Airport and you will find that flights to the United States leave more or less at the same time whether it is British Airways, United Airlines or American Airlines. That is how people tend to behave. You would think that they would provide diversity because there is competition, but instead they provide identical services. Therefore, if we want to have diversity, it is better to have a producer of the size and range that can produce diversity.

This is a straightforward amendment. I hope that the Minister will not find much objection to it. Perhaps I may add briefly that across the country many independent radio broadcasters are in favour of this amendment. I beg to move.

4 p.m.

Baroness O'Cathain: My Amendment No. 156 is grouped with this amendment and I wish to speak now to that amendment.

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Amendment No. 156 addresses one of the particular issues where I believe this Bill could be improved. My amendment is placed with the specific intention of ensuring that three of the objectives of government policy are supported: first, by encouraging greater diversity of broadcast output--in other words, consumer choice; secondly, by deregulating the restrictions on the media industry; and, thirdly, by ensuring the commercial strength and success of our much valued media industry.

Currently, an independent radio station is restricted from applying for a licence for more than one station on the same waveband in the same geographical area. This amendment aims to allow independent radio stations to apply to the Radio Authority for more than one licence on one waveband in any licensed area. That will offer local radio stations the opportunity to move their popular AM Gold music stations onto the better quality FM frequency.

For the benefit of Members of the Committee who are not quite sure what "Gold" means, it refers to what I would call easy listening muzak which one hears in hotels and shops but which in fact is extremely popular. Gold stations are currently listened to for something like 17 million hours per week. That sounds a great deal. That may mean that 17 million people listen to it for one hour per week but it is more likely that, for example, 4 million people listen to it for 4.5 hours per week.

Gold music output is currently listened to for that amount of time and the majority of that output is on the AM frequency which, as we have said before, is notorious for its poor quality. With the advent of digital audio broadcasting--DAB--the AM frequency will disappear--at least, it will not disappear but it will be even more sub-standard. Therefore, it is important for millions of listeners that the quality of output of those popular stations should be improved.

The restrictions which prevent that at present are contained in the Broadcasting (Restrictions on the Holding of Licences) Order 1991. Some may say that giving existing companies greater access to FM frequencies may reduce diversity of output. In fact, the exact opposite is the case. For example, two different companies running two FM stations may have very similar output in a particular geographical area with both aiming for the same most lucrative advertising market. However, if the same company owns two FM licences, by commercial definition it will aim for different audiences and a different advertising market through significantly different programming, thereby creating diversity.

As regards deregulating the media industry, the Government have achieved much in allowing greater cross-media ownership. However, they may have overlooked the need to ensure that each specific media sector is allowed an equal amount of freedom. If this Bill passes into law unchanged, a local radio station could own a greater "share of voice", as it is called, by purchasing a local newspaper, but would be prohibited from obtaining a similar percentage of "share of voice" by expanding in its own sector. Surely it should not be more difficult for a company to expand within its current media sector than to diversify outside its core

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expertise. From my understanding of the radio industry, very few radio companies have any interest in developing into local press barons.

The popular Gold music stations are in direct competition with the BBC's Radio 2. Radio 2 is on an FM frequency and therefore has, I believe, an unfair competitive advantage over local radio stations which must broadcast on an AM frequency.

As regards the commercial strength and success of our valued media industry, I believe that the majority of the radio industry is not interested in diversifying into the print media. It is interested in excelling in the industry in which it has the greatest expertise; namely, radio broadcasting. That in turn should be encouraged by the Government. Giving independent local radio companies the same commercial freedom as other media operations will create greater choice and better quality of radio broadcasting to consumers. I hope that the Government will consider that issue as it would add to the improvements which the Bill brings to the media industry.

The Earl of Onslow: I was approached by my noble friend Lord Dixon-Smith, who cannot be present today, to add my name to the amendment tabled by the noble Lord, Lord Desai. I was extremely willing to do so until I saw all the Members of the Opposition Front Bench putting their names to it. I thought that they wanted to ban me from speaking on the matter and therefore I did not add my name to it. However, I support them in principle, especially the noble Lord, Lord Desai.

It seems to me that the Government are worried about a monopoly situation, and they are right because we should worry about a monopoly situation. But surely such a situation should be dealt with either by the radio regulator or by the monopolies commission. Capital Radio gave me a sandwich lunch and a drink of water, because I was dying of thirst, when explaining this matter to me. If Capital Radio wished to buy half of the FM frequencies available in London, that would obviously be monopolistic. But all the independent radio stations have said that they do not wish these restrictions to be placed upon them. I did not understand until it was all explained to me but FM radio produces a far higher quality of music transmission. Whether it is that disgusting noise which sometimes one's children will listen to or whether it is Brahms, is relatively immaterial. However, it seems to me to be right that, provided that it is non-monopolistic and non-area dominating, people should be allowed to have two or three stations. After all, if the Evening Standard were to take over Capital Radio, it would actually have a far more monopolistic access to news and media ownership over London than would be the case if Capital Radio were to have a second FM channel.

I am suggesting that the monopolistic tendencies are obviously real. I recognise the fact that everyone, from the Venetians through to Adam Smith, wants a monopoly because it is a licence to print money and that it is the duty of regulators to stop that happening. But it seems to me that a blanket ban is not the correct way to do it. It would be much better to approach the

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monopolistic angle which, I believe, is the only angle which has any truth or value. As I said, it could be done by the regulator rather than by a blanket ban. That is why I support not only my noble friend and the noble Lord, Lord Desai, but also the Opposition Front Bench on the issue.

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