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Lord McIntosh of Haringey: I understand the thinking behind the amendment and one is always sympathetic to the cause of community. But the amendments do not recognise the virtues of the provisions in the Bill. Clause 241 provides a very flexible licensing regime for local television services.

We do not know yet, and we cannot know, what the right balance is or will be between different kinds of services. We might have enough spectrum to accommodate both non-commercial and commercial services. There are benefits of both. After all, if people have a choice of what they want to watch, some who have access to non-commercial services may choose to watch commercial services. That is their privilege. Some services provided for commercial reasons might bring a large number of benefits to a particular community. There is not always a contradiction between public interest and commercial interest.

If, when we come to make orders under Clause 241, we believe that there should be only "public interest" or "community" services, which is really what the amendments are proposing, the drafting of this clause will allow us to do that. If, on the other hand, we want and can afford to provide for a wider variety of services, Amendments Nos. 172 and 173 would hinder our ability to do that. The thinking seems to be that Amendment No. 173 would make subsection (7) superfluous and that is why it is removed by Amendment No. 172. That would be a mistake. Subsection (7) does something quite different from Amendment No. 173. It allows a more subtle control of the nature of services licensed under Clause 241 than would be possible by simply adopting Amendment No. 173.

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Where the amendment specifies in broad terms the general nature of the service to be licensed, subsection (7) provides one of the means by which it might be achieved. One might say—I rather think that the noble Viscount, Lord Falkland, was saying it—that we should not have subsection (7) because we can rely on other provisions in the clause to prevent the services being too commercial in nature. But I believe that subsection (7) is necessary. Without it, our ability to shape the future of local digital television will be significantly impaired. With it, we will be able to act more flexibly on a case-by-case basis.

It may be that we want to provide for different types of services with different types of business plans. Some might be able to receive grants from associations or even support from local authorities. But if that were the case, we would want to ensure that they did not enter into unfair competition for advertising income with commercial TV licensees. To do so would need a specific power of the type set out in subsection (7) rather than the alternative proposed by Amendment No. 173. Clearly, we are seeking the same end, but the rather complex and obscure drafting, I have to say, of Clause 241 achieves what the noble Viscount, Lord Falkland, wants.

Lord McNally: Before the Minister sits down, I mentioned at an earlier stage our shared experience of mutuals and co-operatives as perhaps a third way of stopping one of the aims of these amendments. We have been here before in that the technology has provided for real local and community identity and ownership, but commercial forces have caused amalgamations and consolidations which have lost that. Since we are at another stage of technology where we really might be able to obtain local television and local radio, we should be exploring ways in which once they are set up they are protected from predators.

Lord McIntosh of Haringey: If there is room for everyone, the Bill allows for that. If there is not sufficient room for everyone or if there is a threat of a non-commercial interest being swamped by a commercial interest, the Bill allows for Ofcom to discriminate in favour of the non-commercial interest. I think that that is what is being sought by the noble Lord, Lord McNally. It is in place.

Viscount Falkland: I thank the noble Lord, Lord McIntosh, for what was by and large a sympathetic, detailed and thoughtful response. These are difficult problems and unforeseeable events will have to be dealt with in the future. I shall study carefully what he has said and, if necessary, return to the matter at a later stage. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 173 not moved.]

Clause 241 agreed to.

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Clause 242 [Regulation of independent radio services]:

Baroness Buscombe moved Amendment No. 174:

    Page 218, line 14, at end insert—

"( ) Where OFCOM receives notification that may give rise to a change of control in ownership of independent radio services, or that a relevant change of control takes place (whether or not that change has been previously notified to OFCOM), OFCOM shall carry out a review of the impact on music diversity and local character."

The noble Baroness said: We turn now to Clause 242 which concerns the regulation of independent radio services. In moving Amendment No. 174, I shall speak also to Amendments Nos. 251 and 252. Amendment No. 174 would ensure that Ofcom reviews the impact on music diversity and local character in the event of a proposed change in ownership of a radio licence.

While we believe it is important for the Bill to create a market environment which enables UK media companies to invest and compete on the global stage, we are concerned that this should not be achieved at the expense of one of our major creative and commercial successes; that is, the British music industry. The Government's proposals on local radio ownership could create a situation where in effect only three people, two in commercial radio and one at the BBC, will act as gatekeepers between music creators and their audiences.

We believe, therefore, that in the interests of creative growth and consumer choice, Ofcom should carry out an impact assessment on music diversity when a relevant change in ownership is proposed. Given the important interrelationship between radio and music, we are keen to see this measure specified on the face of the Bill rather than relying on the Government's proposal that reference will be made to music diversity in the accompanying guidelines. While other provisions in this legislation provide Ofcom with the ability to carry out impact assessments, it seems sensible for a review of musical diversity to be specified in this clause.

Important aspects of independent commercial radio stations are their programming formats. These are agreed when a licence is issued and account for the output a station provides when it applied for its licence. For example, they indicate how much output will be speech and/or music and what kind of music will be broadcast. In theory, a station currently may not deviate from its format without the consent of the Radio Authority. Station formats are intended to prevent a licensee from substantially changing the character of the service offered without the approval of the Radio Authority.

Already there exists a phenomenon known as "format creep". The Radio Authority itself acknowledges that a new owner already operating other radio stations might wish either to highlight or to underplay elements of a format in order to fit the station into its brand for the future. From a musical point of view, stations with supposedly different formats could then start to sound alike if their play-lists began to emphasise the more middle-ground elements of their format. Surely the institution charged

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with monitoring such franchise holders must be given the remit to assess the impact of any proposed changes in ownership, together with the power to employ clear sanctions when franchise conditions are broken.

I turn now to Amendments Nos. 251 and 252. The first of the amendments seeks to broaden the scope in this clause from "programmes" to "programmes and music". This would serve to ensure that music is taken into account when Ofcom makes an assessment of an independent radio licensee's departure from the character of its service. The effect would be that Ofcom would be legally required to consider music in its deliberations rather than relying only on the apparent assumption that it will be considered in its deliberations.

Amendment No. 252 relates to taking into account that the existing range of programmes and music is calculated, appealing to a variety of tastes and interests. This would mean that the licence review would depend on meeting a requirement to broadcast music catering for a range of tastes and interests matching local audience requirements.

During a debate in another place, the Government stated in relation to this clause that they expect Ofcom to consider the implications for music. The Minister said:

    "It would be impossible for Ofcom to consider the effect of a change in the range of programmes without also considering the range of music on offer . . . the two are virtually synonomous . . . However, I fully expect that, in considering these issues, Ofcom will consider the implications for music".—Official Report, Commons, 25/2/03; col. 159-60.

If the Government already accept that music should be taken into account, surely it should be a regulatory certainty by referring explicitly on the face of the Bill to music. I beg to move.

4 p.m.

Baroness Warnock: I support this group of amendments. The noble Baroness has made clear the essential connection between radio and music. I doubt whether there is anyone who has ever had builders in their house who does not realise that music forms a crucial part of radio output.

We had earlier a brief discussion on the need to preserve the relics of local character in the music output of independent local radio. Even more important is the need to preserve a range of choice and a variety of musical output. Diversity is even more important than locality.

As the Bill now stands, there is a real danger that ILR may become more unified. Although there are safeguards against this, the connection between music output and independent local radio should be spelt out specifically on the face of the Bill. I am not denying that, under the Bill, Ofcom has the ability to consider the changes in musical output that may come about with a change of ownership, but the issue is so important that it should be spelt out on the face of the Bill.

The Committee may well think that the music output of commercial radio is not great anyway and that it does not very much matter if it becomes more

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uniform—that it will be uniformly horrible—but that would be a grave mistake. At the moment, there is a diversity of musical output on ILR. Anyone who has experienced local and commercial radio stations in the United States—owned by giants in the field such as Clear Channel—will recognise that the American model is very different from our own. We need genuine certainty written into the Bill that we will not go in that direction. It must surely be an explicit part of Ofcom's regulation of radio to ensure that we are not subjected to the kind of undifferentiated, blanket Muzak heard on American radio.

As we are dealing with commercial radio, profitability of course has to form a large part of our considerations. But profitability should be balanced by a concern for public service in its broadest sense as regards music. I take it that to preserve this balance is Ofcom's chief function and I hope, therefore, that somewhere on the face of the Bill this may be spelled out with regard to music.

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