Supplementary Memorandum submitted by
the Local Broadcasting Group
1. The Local Broadcasting Group currently
operates six local television stationsat Hertford, Taunton,
Bristol, Perth, Stirling and Edinburgh.
2. The services vary from text news and
information at Edinburgh to a diverse schedule of news, feature,
information and entertainment at Taunton. Each station would,
when operating fully, provide about 20-40 new local jobs.
3. The programme policy of LBG has been
to provide for local viewers:
24 hour, 7 days a week local service.
Locally determined programme schedule,
with no networking and no opt out.
Programme schedule with extensive
local origination, often more than 65 per cent.
Local news, weather and sport for
15 minutes at the top of every hour.
Local news features for a further
15 minutes in every hour, more in night-time, rising to 30 minutes
in every hour.
A high repeat factor for local programming
to give all demographic viewers the chance to view as many programmes
Access opportunities for local community
groups and other local institutions.
4. In December 2000, LBG announced its intention
to raise funding to launch up to 40 stations utilising the grant
of restricted service licences from the ITC. These licences permit
terrestrial broadcasting in local areas in analogue only for a
period limited to four years and providing there is no competing
need for the spectrum.
5. The severe restrictions imposed by current
legislation and the lack of a resolution to these issues in the
new Communications Bill have been significant factors in LBG's
petition for Administration at the end of November 2001. LBG is
currently a company operated in Administration by Smith and Williamson.
6. LBG has found it impossible to date to
prove beyond doubt the effectiveness of the free-to-view distribution
of local services or to raise funding to a sufficient level going
forward to proceed with further launches for the following key
(a) The licence period of four years is too
(b) There is no guarantee of continuation
of the licence beyond that date.
(c) The licences are pre-emptible even during
those four years.
(d) There is no guarantee of the grant of
digital spectrum after analogue is switched off.
(e) There is no opportunity for digital simulcast,
as enjoyed by other broadcasters
(f) The quality of the frequencies allocated
is too poor or variable to ensure economic coverage.
(g) There is no recognition of local services
as providing "public service".
7. The roll-out of local television services
generally, not just those of LBG, is being held back by an inadequate
regulatory framework which inhibits investment. Many attempts
to encourage activity in this sector are proving uneconomic because
of the regulatory restrictions and uncertainty going forward.
8. The Communications Bill as it stands
makes no reference to the existence or value of local television
services, nor addresses the future of such services.
9. LBG, in common with other local service
providers, seeks the Select Committee's support in ensuring that
the Communications Bill includes a new and helpful legislative
framework which will encourage investment and ensure that a high
quality and free local public service is delivered across all
Digital versus Analogue
10. LBG understands the current dilemma
of frequency planners and regulators in trying to integrate these
new and vibrant local services in analogue form, while at the
same time encouraging the take up of digital terrestrial services.
The spectrum is crowded and frequency planning is difficult.
11. For this reason, we accept that no new
licences should be accommodated beyond the 65 announced by the
ITC to date. We believe the roll-out of these should be honoured
as they have already attracted investment which will otherwise
need to be written off.
12. This would further inhibit investment
in the sector and delay the launch of attractive services for
13. However, to delay the launch of local
services until digital terrestrial has reached a critical mass
is unacceptable. Local services are new and relatively untested.
They need the penetration of analogue in the development phase
before migrating to digital in simulcast. They need to be known
and recognised by viewers. That means a period of analogue visibility
for those licences already in play.
14. These free-to-view services will be
a driver for the take-up of non-pay digital terrestrial services
and should be simulcasted in both analogue and digital as soon
A Public Service
15. LBG's programme schedules emphasise
local news, local weather, local information, local entertainment,
local sport and local features. We believe a local service should
be branded as local and be scheduled locallynot operated
as a network with opt-outs like ITV.
16. LBG believes local schedules should
be broadly accommodating of all local interests. They must deliver
elements of "access" within the schedule to ensure local
"ownership" of the station.
17. Local television services should be
clearly identified as public service television in the best traditions
of UK services. An appropriate level of content regulation should
be acceptable but that regulation should acknowledge the narrow
economic base and early stage of development.
18. LBG believes that local services offer
a new opportunity to advertisers who are either too small to afford
current television advertising or who operate locally rather than
nationally or regionally. This advertising income should form
the basis for funding the service.
19. Then local advertising market is estimated
at more than 2.5 billion and is more resilient in recession than
20. The market is discreet from that offered
by ITV, C4 or C5 or satellite services. It offers an alternative
medium to local newspapers and radio.
21. LBG sees no reason why such services
should be publicly funded and would be concerned at any market
distortion created by a mix of advertising and subsidy which would
allow subsidised stations to undercut the advertising market.
22. However, we also recognise that the
business models are unproven and flexibility in the funding mix
may be needed during the formative period.
The role of other broadcasters
23. LBG believes that a new "type"
of broadcaster is required to develop local services and that
this should be enshrined in legislation as part of the Bill.
24. ITV has established regional and sub-regional
services. Some service areas, such as Border or Channel come closest
to what LBG intendsand viewer ratings for local services
in these areas are among the strongest in the ITV network.
25. However, ITV cannot expect to matchand
may not wish or be able to justify the diversion of airtime and
resources to matchthe depth of service which local television
can provide. Nor can it provide the focus for advertisers that
a one-town or one-city service can offer.
26. ITV is increasingly a national brand
and may have an international future as a high quality, diverse
and still regulated entertainment channel.
27. The BBC is active in local radio and
has developed its local profile and service. However, we would
be concerned if the BBC developed local tv stations if it put
further pressure on the level of the licence fee, or if it diverted
resources away from the key free national channels, or if it caused
the BBC to distort the market by funding local television commercially,
or if the BBC's presence limited audience opportunities for private
28. There are synergies which may be enjoyed
at local level with local radio and local newspaper operators,
where such associations do not create local information or advertising
monopolies. However, since local television is unlikely ever to
match viewing levels of the major channels, due consideration
should be given to permitting the early development of local services
in tandem with other local news and information providers.
29. Longer licence period and continuation
30. The four year licence term does not
give sufficient time for set-up costs to be amortised and makes
venture funding impossible. LBG has consistently met problems
with the attitude of potential funders and with service providers,
such as transmission companies, because of this key weakness of
31. We believe that, in the Communications
Bill, the licence period of the 65 licences published to date
should be extended to ensure their attractiveness to investors.
A period of eight years would suffice but it is unclear why licences
cannot match those of the ITV companies.
32. The value of a four year licence is
diminished further by the power of the ITC to revoke a licence
if an alternative use for the spectrum is found which delivers
greater value. In short, the licence can be taken away so that
a theatre can use radio microphones.
33. This is an impossible restriction on
which to build a broadcasting business or provide a public service.
Local services are at the wrong end of a long food chain in spectrum
34. We believe that the Communications Bill
should establish appropriate legislative security and create a
new class of "Local Television Service" licence with
the same protection as other broadcast licences.
A digital future
35. There is currently no allocation of
digital spectrum agreed for free-to-view local services. Such
services will die as analogue is switched off. This issue is highlighted
in the recent report of the Parliamentary Office of Science and
Technology and we welcome this as the first sign that the inadequacy
of the proposed legislation with regard to local television has
36. We are certain that properly funded
local services will be driver for free-to-view digital services
and will enhance the speed of the roll-out of digital television.
We believe this should be a key factor in the Government's approach
to local television, yet it is ignored by the Communications Bill.
37. We believe the Communications Bill should
make digital spectrum available as simulcast alongside analogue
as soon as possible to those 65 licences already established.
Future licences should have access only to digital bandwidth.
38. The frequencies which are currently
available to local broadcasters are effectively what is left after
all other operators have been satisfied. The signal quality is,
therefore, highly variable in analogue.
39. We believe that the Communications Bill,
as part of establishing a sound regulatory framework for local
television, should ensure that, going forward, every effort is
made to find better frequencies in analogue in the short-term.
Public service status
40. There is a lack of clarity in the Bill
about what may or may not evidence "public service"
to ensure a "must carry" obligation.
41. We believe that the Communications Bill
should make clear that local services should be classified as
"public service television" provided that, when mature,
these services deliver at least 50 per cent of content which is
locally originated and locally scheduled.
42. "Locally" in this context
should recognise that some current licence areas are either so
small that they need to be managed in conjunction with other licences
or are contiguous or offer a "travel to work" area which
may extend beyond a single licence area. Some "bunching"
should be permissible.
43. Equally, due regard needs to be paid
in the Bill to a phasing in on the content requirements over a
period which we would suggest might be four years.
44. We believe that the Communications Bill
offers a great opportunity to establish a sound framework for
television to develop and deliver the local newspapers of the
45. We believe that the linear TV services
we have defined and in which we operate will, in the digital environment,
generate new opportunities for interactive services and self-select
services of local news and information. They will be a driver
46. However, this may be jeopardised unless
the Communications Bill acknowledges the presence of local television
services now, recognises the extreme difficulties under which
such services are forced to operate, and creates a structure to
encourage their further sound development.
47. At the moment, the Bill remains silent
on all these points and, if it remains so, a great opportunity
for new viewer services will be lost.
48. In addressing this, LBG seeks the consideration
and support of the Select Committee.
31 January 2002