Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by the Radio Authority


  1.  The Radio Authority was set up by the Broadcasting Act 1990 to license and regulate independent radio. There are currently in issue 250 independent local radio (ILR) licences, three independent national radio (INR) licences, one national digital multiplex licence and 16 local digital multiplex licences carrying between them 160 digital sound programmes services. The Authority has around 90 long-term RSL (LRSL) licences in issue to schools, colleges, hospitals and other institutions with a transient population, and awards some 400 short-term restricted service licences (RSLs) each year. The Authority's engineering staff undertakes frequency planning, commissioning and technical regulation for these services. Taken together, the Authority is responsible for some 40,000 hours of programming and advertising output each week, which is co-regulated with the industry according to a series of statutory Codes.


  2.  The development of new radio services will be a continuing task for regulation in the coming years. It is most effectively carried out through a licensing process, which relates closely to content and technical regulation as well as providing funding for the regulator without demands on the public purse. It will be necessary to include within OFCOM's structure a separate capacity to undertake these licensing tasks which would be overseen by an independent committee reflecting the public interest, rather than being left to a single professional regulator.

  Plurality of ownership is a proper and necessary objective for any public policy applying to broadcasting and will not be delivered by the market alone, where there remain only a limited number of outlets due to spectrum scarcity, which will be the case for radio into the foreseeable future. The Authority believes that plurality rules are required locally, but the accumulation of ownership across the UK as a whole shall be subject only to competition rules.

  The Authority recommends a series of transparent formulae to ensure local plurality, based on the principle that in each local area where there are sufficient licences, there shall be three separate commercial owners of local licences plus for the BBC. We propose similar formulae for cross-ownership between radio and newspapers and radio and television. We believe that rules concerning local plurality should be based upon a universe of local services, rather than including national radio stations in any calculation.

  The Radio Authority welcomes the proposals in the White Paper to regulate where necessary the selling on of recently awarded local licences, and the proposals to amend disqualifications over the ownership of digital local radio licences by religious bodies. The Authority does not believe that there should be any further relaxation of the ban on ownership of national radio services by single religious bodies, but multi-faith ownership—fully reflecting the religious nature of UK society—would be permitted.

  Access Radio, a new "third tier" of non profit stations, is to be the subject of a seminar organised by the Radio Authority on 12 February, following which the Authority will express further views on this proposal.

  The powers in respect of the BBC which the White Paper envisages remaining with the Secretary of State for the time being should, at the time of charter renewal, pass to OFCOM. OFCOM should plan all use of radio broadcasting spectrum by both the public and private sector and be given the task of evaluating the public service remit of BBC radio.

  The internal structure of OFCOM should be so organised as to ensure that a separate division applies radio experience and radio expertise to the regulation of licensing, programme formats and local plurality rules for commercial radio, the administration and licensing of the Access Radio "tier" and such matters relating to BBC radio services as OFCOM is required to undertake. OFCOM will therefore need to have vertical sectoral divisions, alongside horizontal operating divisions.


  3.  Unusually among established media, existing terrestrial radio is characterised by a continuing demand for the licensing of new services, as well as the obligations under present legislation to re-advertise and re-license existing services. There remains a very high level of demand for the remaining existing analogue opportunities, which will require the Radio Regulator to undertake a good many years more of new licensing on the existing frequency allocation, and those which may be added to it. The FM spectrum review, set up by Government to consider whether more intense use could be made of the FM bands currently deployed for radio broadcasting, could identify further analogue frequencies which may help to meet the unsatisfied demand for access by existing and new operators, and therefore extend UK radio licensing requirements to be carried out by a future regulator. For digital audio broadcasting or digital radio as it is now termed in consumer marketing, where multiplex licensing is the crucial element in ensuring access, the existing frequency allocation will occupy a licensing body for many years. Complete coverage of the UK, using additional space on Band III, will also extend this process. During the later years of the decade, the availability of L-band will create new licensing duties, and in particular will offer access to digital for smaller areas as well as opening up digital radio to the non-commercial private sector. At the same time it is likely that both the demand for and opportunity to provide further small-scale services on analogue FM will go forward for many years. Thus whatever changes are made to regulatory structures to deal with technical convergence, the task of radio licensing as we know it today will need to continue for many years, and provision needs to be made in any new structure for this function which is best achieved through a sectoral regulatory division of OFCOM.

  4.  The Radio Authority is in no doubt that economic regulation is most effectively carried out through a licensing process. This is especially so since licensing inter-relates closely with effective content and technical regulation. Sanctions—whether relating to programme content, technical compliance or to enforce ownership provisions—are most meaningful when applied to the continued holding of licences. A licensing regime allows for swift complaints handling which, unlike the judicial process, is readily available to all listeners. The licensing system also builds a constructive relationship between the regulator and the licensee, allowing regulation to be at an appropriate level and sufficiently flexible to work in both the public and commercial interests, rather than simply on a non-discretionary administrative basis. The licensing mechanism also provides funding for the regulator, without demands on the public purse. Commercial radio is in fact a net contributor to the Consolidated Fund, of monies, coming from cash payments made by Independent National Radio stations together with station fines totalling some £10.5 million in 2000.

  5.  The White Paper acknowledges the continuing task for OFCOM in licensing new analogue radio services, rolling out digital multiplexes and readvertising existing analogue licences (3.6.3). Given existing spectrum resource, there is likely to be a significant degree of new analogue licensing until at least around 2006. After that, there is the prospect of additional small-scale licences in less densely populated areas. For digital radio, assuming access to L-Band and some additional Band III spectrum after the middle of the decade, new digital multiplex licences might continue to be offered until the latter part of the decade, and smaller-scale digital multiplexes for some years thereafter. Restricted Service Licences will continue at or close to their current level. (We estimate that last year RSL's involved some 20,000 people in doing radio). In addition, subject to the outcome of the continuing review of the use of the FM spectrum, there may be an additional tranche of new analogue licensing to be undertaken. It will therefore be necessary to include within OFCOM's structure a separate capacity to undertake these licensing tasks.

  6.  It is the Authority's view that the final decision on such licensing should not be left to a single professional regulator. Radio licensing is the last major licensing task where awards will be made on the basis of specific statutory criteria. The licensing of radio so far has been carried out with decisions being made by a Board of independent part-time Members, reflecting the public interest. That collegiate, lay approach, time-honoured in broadcasting matters, means that decisions are made by those whose only remit is to serve the public interest and who—whatever their necessary expertise—do not have a professional involvement in the day to day regulation of the industry. This is a necessary protection when allocating a valuable public resource for commercial exploitation. There is fierce competition for licences and this can generate a remarkable level of passion. An individual making such decisions on his or her own would be placed in an unacceptably exposed position. The public interest is best served by establishing a Radio Committee, as a sub-committee of OFCOM, and chaired by one of OFCOM's independent part-time Members which would guarantee the necessary level of independence in licensing.


The nature of radio

  7.  Throughout the 20th Century, radio has remained a distinctive medium despite the growth of television, cinema, video, cable and satellite distributed audio services, telephone services and the ubiquitous availability of recorded music. The Radio Authority believes that it will remain similarly distinct for the coming decade at least, and thus throughout the currency of any new legislation. Indications so far are that new technologies will complement and enhance the role of radio, rather than change mass consumer behaviour, during the next 10 years. It is also clear that analogue FM in particular will remain of great importance for small scale radio services into the foreseeable future. The Authority judges that by 2010, at least 80 per cent of radio listening will continue to be to universally accessible, free-to-air, terrestrially delivered services. The exciting opportunities offered by the Internet and mobile telephony platforms (such as 3G) already show signs of re-invigorating terrestrial radio rather than replacing it over this time scale.

  8.  The Radio Authority believes that over the next 10 years radio will continue to be distinguished by its current characteristics:

    —  Radio is generally and universally available and is not dependent on wired delivery (although it may he supplied by wired delivery) and can use any available platform.

    —  Radio is simultaneously available to all potential listeners, almost always without a charge, and thus "free-to-air".

    —  Radio services can be all received in mobile and portable mode.

    —  Radio is primarily audio and not dependent on pictures or other features which, if present, are supplementary.

    —  Radio tends not to be made up of a service of separate programmes, but its output is packaged to offer added value and a distinct character, not merely to offer audio streams or clips.

    —  Radio is linear and mostly live. Unlike television, recorded radio, for time-shift listening, is not generally popular and timed audio recorders are rarely sold or used.

    —  Radio is personal not collective, and its close relationship with its audience is not dependent upon interactivity.

    —  Radio unlike television is both a primary and a secondary medium, and as a secondary medium it is easy to combine with other activities.

    —  Radio is inexpensive, whether to the programmer, the broadcaster or to the listener.

    —  Radio creates a unique intimacy and engenders a passion among its listeners, who can interact with radio through their imagination.

  9.  Existing evidence suggests that terrestrially broadcast radio will remain the dominant means of delivery through the next decade. While new technologies are readily available, there is no indication that they will automatically replace the existing radio technology. Unlike the Internet and other services dependent mainly on fixed links, terrestrial radio broadcasting offers mobility and portability. Unlike mobile telephony services, terrestrial radio is free for consumers, and relatively cheap for broadcasters to reach the mass audiences to which their content is suited. Research conducted by Arbitron in the United States and by its sister company Continental Research in the UK, clearly shows that radio listening remains at least constant in Internet-capable households, in contrast to the decline of television viewing. Indeed, there is evidence that the growth of the Internet stimulates radio listening. There is a natural symbiosis between radio and the Internet, the former supplying wide bandwidth, the latter offering immediate impact and sign-posting. Since radio is a secondary medium, it is patronised at the same time as surfing the web. There has been a significant growth of Internet sites linked to existing radio services and of advertising on contemporary radio.

  10.  Despite the popularity of radio sites on the Internet, the fundamental economics of free-to-air radio (one-to-many) will remain hugely more favourable than wired services (one-to-one) for the foreseeable future. We recognise that the impact of Moore's law on technology will continue to increase processing power. Hand in hand with this, bandwidth for fixed access systems will become more plentiful and much cheaper. However, radio spectrum is inherently finite, particularly where mobility and portability are a requirement. Significantly, there is no evidence that Moore's law acts also on consumer behaviour. The conservatism which characterises radio listening indicates that consumer behaviour will change much more slowly than changes in available technology.

  11.  That innate conservatism of radio audiences is illustrated by the slow take-up of VHF/FM in the 1970s and 1980s, and by the intense opposition in 1992-93 to the proposed removal of BBC Radio 4 from long wave. We estimate that there are at least 100 million analogue radio sets currently in use in the United Kingdom. Existing analogue radio is also available as part of a significant number of other consumer goods such as cars, clocks and computers. For that reason, there remains uncertainty about the speed of take-up of digital radio. The specific purchase of sets to receive Internet radio or mobile-telephony-delivered audio—as distinct from their incidental acquisition—is unlikely to be a major element for 10 to 15 years at least. The wide patronage of existing analogue radio services sees nine out of 10 people in the UK listening to radio every week for an average of some three hours a day, representing over one billion listening hours each week. Such consumer behaviour underpins the high level of demand which still exists for new analogue licences advertised by the Radio Authority and the industry demand for more analogue as well as more digital spectrum. These factors taken together lead the Authority to its 80/20 prediction, that by 2010 80 per cent of all radio listening will still be to terrestrial services, whether delivered by analogue or digital transmissions. That may even prove to be an under-estimate.

  12.  If technical convergence is to be defined as the ability of all platforms and all networks to carry all services, then the convergence of radio shows very different characteristics from that of television and telecommunications. Radio is essentially cheap and easy to receive, free-to-air, using low cost portable equipment. Since it is a secondary medium, it operates alongside the Internet rather than in opposition to it. Consumer behaviour and existing patronage suggest that consumer take-up of new radio technologies will be slow. While new regulation needs to stimulate and facilitate change, it must also protect those millions of listeners who want to continue to listen as they do now. Unlike the situation in respect of television and telecommunications, there is little industry drive towards radical convergence. Commercial radio is the last of the traditional broadcast media still to be expanding significantly through new licensing, analogue as well as digital. The Authority takes the view that radio convergence of a type that will fundamentally change listener behaviour will take place only in the decade after 2010, and only after significant changes in market behaviour for other media and further development of audio technology. We think it likely that a researcher surveying the radio industry at the end of the new decade may well observe how similar it is to that which applied at the turn of the old century rather than how different. They may remark upon the way in which new technologies have added to the scope of radio, but they are likely to conclude that the bulk of public use of radio has changed little since the end of the 20th Century.

  13.  Given the continuing scarcity of radio spectrum for those types of services which are likely to continue to attract the great majority of radio listening, the Radio Authority believes that the over-riding aims of radio regulation should be:

    —  to manage the balance between the public interest and the commercial interest in the use of the scarce radio spectrum allocated to it by Government;

    —  to reduce the levels of inappropriate sectoral regulation as changes in the social, technological and political environment make such reduction appropriate, and to increase levels of co-regulation;

    —  to facilitate the introduction and development of digital terrestrial radio broadcasting; and

    —  to apply radio solutions to radio problems where the distinctive nature of the medium so requires.


Concentration of radio ownership

  14.  Plurality of ownership is a proper and necessary objective for any public policy applying to broadcasting. The Radio Authority believes that it is undesirable for ownership to become so concentrated that even where there is a multiplicity of radio stations these can be in the hands of only one or two operators. While recognising that the presence of BBC radio provides some natural plurality (and increased diversity), the essentially non-commercial nature of the BBC means that plurality obligations still remain for commercial radio itself. The Radio Authority is not convinced by the argument that existing radio operators need further ownership liberalisation in order to avoid takeover, since large groups are just as attractive as small ones and there are existing protections against non-EEA control of UK radio licences. Nor is the Authority persuaded that media groups need ownership liberalisation in their home market in order to compete overseas. There is every indication that a successful but limited domestic company has as a consequence more incentive to expand into other countries. Nevertheless, we feel that the existing ownership rules for radio are becoming anachronistic because they contrast unfavourably with the rules which apply to other established media.

  15.  The Authority therefore recommended in June 2000 that the existing points system should he removed and that accumulation of ownership of commercial radio, both analogue and digital, across the UK shall be subject to normal competition rules, with plurality rules applying only in individual localities. This liberalisation will assist existing operators with their longer-term investment in digital radio. The White Paper envisages that this sectoral competition regulation will be done by OFCOM itself under concurrent powers.

  16.  The Authority has also found that the system of public interest tests established by the Broadcasting Act 1996 both for in-area concentration of radio ownership and for cross-media ownership has proved cumbersome and opaque. We wish the new regime to be as clear and specific as possible, and to provide maximum certainty for both the industry and the regulator. We recommended therefore that the public interest test regime should he replaced by straightforward and transparent new rules based on clear formulae (one of a number of examples in our submission of retaining regulations). We further recommended that any such formulae should be capable of amendment by secondary legislation, so that in the uncertain future there will be sufficient flexibility to amend such rules without recourse to primary legislation.

  17.  The Radio Authority does not believe, however, that the principle of plurality should be abandoned. On the contrary, it is important that it is protected and made entirely clear. Plurality of voice for broadcasting is the cultural equivalent of competition policy and the Authority believes that it is culturally and socially unacceptable, putting aside competition issues, for any media company unreasonably to dominate output on a single medium. We therefore recommended that the new legislation should establish transparent formulae with the broad aim that there shall be not fewer than three separate owners of commercial local radio services in any locality. There would be a "grandfather" clause to allow existing owners of stations to retain the current holdings where these are allowed by the legislation now in force. We propose therefore the following formulae for analogue radio, which represent a further liberalisation of the existing ownership rules:

    —  In any area where twelve or more ILR licences exist, no more than five may be owned by any one company;

    —  In any area where nine to 11 ILR licences exist, no more than four may be owned by any one company;

    —  In any area where six to eight ILR licences exist, no more than three may be owned by any one company;

    —  In any area where three to five ILR licences exist, no more than two may be owned by any one company;

    —  In any area where there are only two licences no restriction shall apply; and

    —  These rules shall be applied without regard to waveband.

  18.  For digital radio, we propose the following formulae:

    —  Given the key position occupied by the multiplex operator as "gatekeeper", no company which owns one multiplex in a local area may own more than 20 per cent of any other local multiplex in that locality;

    —  On a national (ie UK-wide) multiplex, no programme provider may hold a licence to provide more than three services; and

    —  On local multiplexes, no programme provider may hold a licence to provide more than one third of the total number of commercial digital programme services available on local multiplexes in a given locality.

  We anticipate that, once digital radio has moved beyond its development stage, rules governing the ownership of multiplexes might well become matters for competition rules rather than formulae of this nature.

  19.  In every instance, the formulae assume an effective definition of "control". In order to establish plurality rules from the perspective of the individual listener, and to avoid heavy regulation, a mechanism based on co-regulation will require operators to ensure that there is no point within their licensed areas where they are in breach of these formulae. This also gets away from the existing complicated rules regarding overlaps. The OFCOM would then deal with any breach by requiring companies to sell down with immediate effect.

Cross-media ownership

  20.  We propose the following formulae to govern cross-media ownership between radio and newspapers and radio and commercial television (we use the specific term "national" for UK-wide radio and television licences):

    —  No newspaper with more than 50 per cent of a local market in terms of circulation should be able to own an analogue radio station in that market unless there exist at least two other analogue ILR radio stations—not so owned—except in areas with only two ILR stations where one may be owned by the newspaper;

    —  A newspaper should not be able to own a local digital multiplex in that area unless there is at least one other multiplex not so owned;

    —  No UK-wide newspaper should be able to own an analogue INR station or a national digital multiplex;

    —  No company should be able to own both a national commercial television licence and an analogue INR licence;

    —  No company should be able to hold a regional commercial television licence and an analogue ILR licence for the same area unless there exist at least two other analogue ILR stations not so owned, nor own a local digital multiplex in that area; and

    —  Subject to those rules, there should be no limitation on cross-ownership between radio and newspapers, or radio and independent television, except those which apply to the concentration of radio licence or multiplex ownership itself, as are set out above.

  21.  These rules would apply to all ILR services, whether local or so called "regional". The legislation should be so framed to enable the amalgamation of analogue and digital rules, by Order, once digital radio services have attracted significant audience numbers.

Basis for ownership calculation

  22.  The Radio Authority proposed to Government in its previous submission that the existing points systems should be replaced by a series of simple numerical formulae, applying at any point within the licensed area of a local service. This approach assumed a universe of stations calculated using only Independent Local Radio licences, and was based upon a principle that where sufficient such licences exist there should be no fewer than three separate owners in any area. Working on this basis, and taking into account the services provided by Independent National Radio operators and the range of non-commercial services from the BBC, the Authority was satisfied that the necessary plurality of ownership would be protected and made clear. We note that the White Paper establishes "plurality of public expression" as central to OFCOM's regulatory objectives. (8.5.1)

  23.  It has been argued that the universe forming the basis for calculating the number of licences which may be held should include Independent National Radio services and all BBC services, the latter counted according to the number of different radio stations provided by the Corporation in a locality. The inclusion of Independent National Radio, whereby three services are provided in most parts of the United Kingdom would bring in competition issues which are not part of the sector-specific local plurality issues (leaving aside issues raised by Atlantic 252 etc). For that reason it is not appropriate to include INR services. The position of the BBC is rather different. However, the Corporation's five national services are not relevant in adding to potential for the expression of local views or the provision of specifically local information. The Authority therefore does not think it appropriate to include BBC national services in any calculation. So far as BBC local stations are concerned, although expression of views and provision of information is obviously relevant, the Authority would not wish to depart from its principle that there should be three separate owners of local radio stations plus the BBC in any locality. BBC local radio is therefore taken account of in the existing calculation. The Authority does not believe that the existence of a BBC local radio station in any locality means that plurality would be adequately served if there were merely two commercial owners of other radio stations.

The selling on of radio licences

  24.  The Authority warmly welcomes the signal given in the White Paper that a mechanism should be put in place to regulate where necessary the selling on of local radio licences (5.11.1). It shares Government's concern that a uniform move "towards a middle ground of national taste" would be against the public interest. The Authority will be proposing to Government that provisions similar to those which apply to Independent National Radio, in section 103 of the 1990 Broadcasting Act, could be applied to local radio licences. This would give the regulator the power to prevent a change of control, if it seems that such a change would be prejudicial to the principles of section 105 of the 1990 Broadcasting Act (or its equivalent in any new legislation) on the basis of which the licence was originally issued. The Authority believes that the "relevant period" during which such consideration might be given for ILR licences should be two years. The existing power under section 86(7) of the 1990 Act to withhold consent to a transfer unless satisfied that the new owner will be able to comply with all the existing conditions of a licence should, for the new regulator, be extended to all changes of control. The Authority also believes that the power it has under section 93 of the 1996 Broadcasting Act, to firm up licence conditions which protect the character of a radio station when it is taken over, should be extended to the new regulator and should apply to all licences, not just those awarded before the 1996 Act came into operation.

Religious ownership of national independent radio services

  25.  The Authority welcomes the proposals in the White Paper to amend ownership disqualifications (4.9). It is particularly appropriate that the anomaly whereby religious bodies may hold analogue but not digital local radio licences is to be addressed. The Authority does not believe that there should be any further relaxation of the ban on ownership of national radio services by single religious bodies. However multi-faith ownership, fully reflecting the religious nature of UK society would be permitted. We have noted the opinion of the European Court of Human Rights that existing UK legislation is justified by the scarcity of available frequencies. Since, with spectrum available for just three INR licences, it is wholly out of the question that even the majority of established religions can have the privilege of ownership of a licence in this scarcity, the Authority continues to believe that only allowing multi-faith ownership is the fairest way to proceed. The existence of digital radio, at least in the spectrum presently allocated to it or likely to be allocated to it in the future, does not in any significant way alleviate this spectrum scarcity. The Authority feels the greatest reluctance at allowing a situation to come about where rival religious bodies have to engage in competition to place the highest cash bid, in order to gain access to a national radio service, and thereby to exclude equivalent access for another religion or another denomination.


Access Radio

  26.  In response to the invitations issued in 4.5.2 and 4.5.3 of the White Paper for views and debate about the concept of a separate tier of Access Radio services and of a Radio Fund to support it, the Authority has organised—with the agreement of Government—a seminar to be held on 12 February 2001. We hope that will be an occasion for all those with an interest in these concepts to express and debate their views. Following the seminar, the Authority may wish to add to its own submission, set out in June 2000 on Access Radio.

  27.  The Community Media Association has argued, in line with the Radio Authority's June 2000 submission to Government, that there should be a range of pilot experiments to cover as many aspects as possible of the proposed Access Radio sector. However the White Paper has not indicated that Government necessarily intends to proceed with Access Radio, nor has it given any authorisation to the Authority to undertake such experiments. Given the wide range of small scale services already established by the Authority, and the progress which has been made with long-term Restricted Service Licences as well as the widely used and highly effective short-term Restricted Service Licence scheme, the Authority does not feel justified in initiating any such experiments at this stage. We will, however, be alert to indications from Government following the 12 February seminar and the opportunity to consider views expressed on that occasion.

The regulation of the BBC

  28.  The Radio Authority judges that the White Paper's approach to the content regulation of public service broadcasters, described as "tier three" regulation, is a valuable way of protecting and enhancing the public interest. We consider it important that, as envisaged in paragraphs 5.8.4 and 5.8.5 of the White Paper, OFCOM shall be given the task of evaluating the performance of BBC Radio against the self-imposed high level remits. This will require OFCOM to have both the capacity and expertise to undertake such a radio specific task. It will have the value of ensuring that there is a more even set of rules governing formats for public service radio and for the commercial sector.

  29.  We recommend that powers in respect of the BBC which the White Paper envisages remaining with the Secretary of State for the time being (paragraph 5.8.6.) should, at the time of the Charter renewal, pass to OFCOM. In terms of spectrum management, we consider it an essential part of OFCOM's functions in this respect that it shall oversee spectrum used by all broadcasters, including both the BBC and the commercial sector. Indeed there is a strong case that OFCOM should take over frequency planning for both radio sectors (plus Access Radio) to ensure the most productive use of a scarce public response. With that in mind, we recommend that the role currently undertaken by DCMS in respect of the BBC's use of spectrum should be carried through by the new regulator ab initio.

The structure of OFCOM

  30.  The Radio Authority welcomes the intention set out in the White Paper that OFCOM shall follow the established principles of good corporate governance, and Better Regulation, and be governed by a Board with a separate Chair and Chief Executive. Given the particular public interest in the regulation of media and communications, we regard the representation of that public interest will be best protected by ensuring that OFCOM itself includes a majority of independent non-executive Commissioners, although they will clearly require experience and expertise in these fields. We anticipate that OFCOM will oversee a Management Board, and that the Chief Executive and a small number of others from that Board will serve on the Commission itself.

  31.  OFCOM will be required to undertake such a range of tasks that it is clearly unduly simplistic to seek to establish either two separate self-contained structures (content and infrastructure) or even three (adding spectrum management). Not only are there a number of significant tasks that will not easily fit within the artificial straitjacket of a dualistic approach, but matters such as competition affect both content and delivery whilst retaining a necessary separateness. If OFCOM is to work as envisaged, as a properly integrated single regulator, each of its many and separate functions will need to be represented as an integral unit incorporating appropriately qualified professional staff who can work both cross-sectorally and have the necessary sectoral expertise.

  32.  At the same time, it will be necessary to protect the separate needs of radio as identified in the White Paper (8.6.2), at least for so long as those distinctions continue to exist. With that in mind, we recommend that OFCOM shall include:

    (i)  a separate Radio Broadcasting Division to undertake new analogue and digital licensing, with relevant support in respect of frequency management and technical policy associated with that, the supervision of formats and format amendments for ILR stations ("tier two" content regulation), the supervision of BBC Radio delivery of its "tier three" content obligations, supervision of the radio sector-specific ownership rules and management of Access Radio;

    (ii)  other horizontal departments within OFCOM, including finance, engineering and spectrum management and content regulation, to contain and retain specific radio expertise; and

    (iii)  that OFCOM would put in place effective co-ordinating machinery.

  We do not believe that this needs to be reflected in the new Communications Act as a statutory requirement, but urge that it shall form part of the clear instructions given during the establishment of OFCOM.

  The Radio Authority will be pleased to amplify any of these points in giving oral evidence to the Committee, or to deal with any other issues which the Committee wishes to raise.

February 2001

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