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COMMONS AMENDMENT

212

Schedule 2, Page 99, line 26, at end insert--

'Limits in relation to licences to provide local radio services in overlapping areas

10A.--(1) No one person may at any time hold any two licences to provide local radio services which share a potential audience unless either--
(a) one of the licences is an AM licence and the other is an FM licence, or

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(b) the Authority have determined that in all the circumstances, having regard to the matters specified in sub-paragraph (4), the holding by that person of the licences in question could not be expected to operate against the public interest within the area concerned.
(2) No one person may at any time hold any three licences to provide local radio services any of which shares a potential audience with each of the other two services unless--
(a) the licences include both an AM licence and an FM licence, and
(b) the Authority have determined that in all the circumstances, having regard to the matters specified in sub-paragraph (4), the holding by that person of the licences in question could not be expected to operate against the public interest within the area concerned.
(3) No one person may at any time hold any four or more licences to provide local radio services any of which shares a potential audience with each of the other services.
(4) The matters referred to in sub-paragraphs (1) and (2) are--
(a) any reduction in plurality of ownership of local radio services within the area concerned that would result from a decision to allow the licences to be held together, and
(b) the likely effect of such a decision on--
(i) the range of programmes available by way of independent radio services to persons living in the area concerned, and
(ii) diversity in the sources of information available to the public in the area concerned and in the opinions expressed on local radio services received in that area.
(5) For the purposes of this paragraph two local radio services share a potential audience if, but only if, the potential audience of one service includes more than half of the potential audience of the other service.
(6) This paragraph has effect subject to paragraph 10B.
(7) In this paragraph--
"AM licence" means a licence to provide a local radio service on an amplitude modulated frequency,
"FM licence" means a licence to provide such a service on a frequency modulated frequency, and
"potential audience", in relation to a local radio service, means the persons over the age referred to in paragraph 8(2)(a) who reside in the coverage area of that service.
Power by order to impose different restrictions in place of paragraph 10A

10B. The Secretary of State may by order provide that, where a digital sound programme service is provided in any area, the holding by any one person of two or more licences to provide in that area local radio services which for the purposes of paragraph 10A share a potential audience with each other or with each of the others shall, instead of being subject to the restrictions specified in paragraph 10A, be subject to other restrictions specified in the order.'.

Lord Inglewood: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 212. I should also like to speak to Commons Amendments Nos. 222 to 229 and Commons Amendment No. 136.

There has been considerable debate about the current restriction which limits companies to one radio licence on the AM waveband and one licence on the FM

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waveband in areas which overlap. The Government listened carefully to this debate and held discussions with the Radio Authority and the Commercial Radio Companies Association. We concluded that both the industry and the listener would benefit from a measured relaxation of the existing ownership regime. Amendment No. 212 therefore allows companies to own three licences in areas which share a potential audience; that is to say, either two FM licences and one AM licence, or two AM licences and one FM licence.

The acquisition of a second licence on the same waveband will be subject to a radio specific public interest test, to protect plurality and diversity in the local radio market. When considering applications from radio companies wishing to operate a second licence on the same waveband in the same area, the Radio Authority will have to consider three factors in relation to that area. These are whether any reduction in plurality of ownership might result from a decision to allow the licences to be held together; the likely effect on the range of independent radio services available to listeners; and the likely effect on diversity in sources of information available and opinions expressed on local radio services in the area.

In the larger city areas where there are already several other radio stations, it is not obvious that plurality dictates that a company should be restricted to owning two licences. Under the test that we propose, the authority will be able to allow the acquisition if it concludes that a reduction in plurality is not so material as to be against the public interest.

However, in shire areas, where typically the only AM licence and the only FM licence are owned by the same company, the test will allow the Radio Authority to conclude that the acquisition of a third licence for that area does not operate against the public interest if such an acquisition will actually lead to an increase in the number of services which would be provided. That may be the only way that a further service would be viable; that is to say, through the exploitation by the dominant company of economies of scale. It will be for the Radio Authority to judge whether the benefits of diversity outweigh the interests of plurality.

In allowing a company to acquire a second FM (or AM) licence in a particular area, we do not propose to remove the existing licence conditions applying to programme formats and promises of performance. If a company acquires an existing licence, it will remain bound by these conditions, and will not simply be able to supplant an existing service with one that is radically different from the one to which listeners have grown accustomed. And in issuing any new licences, the Radio Authority will continue to seek to extend diversity for listeners in the area.

However, in our discussions with the Radio Authority about this issue, the authority expressed concern that many of the existing promises of performance had been drafted in general terms when there were tighter limits on the ownership of more than one station in any one local area. Amendment No. 136 accordingly enables the Radio Authority to revise local licences upon a change of control in order to write tighter promises of

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performance which accurately reflect the character of the station's output immediately prior to the change of control.

The intention behind Amendments Nos. 222 to 227 is simple. The connected persons provisions in Part III of Schedule 2, would mean that the Radio Authority would have to apply the new public interest test if a person is a director of any three radio stations which share a potential audience. That was never the intention, and these amendments change the connected persons provisions to ensure that such a situation does not arise.

Finally, Amendments Nos. 228 and 229 remove the limits on participation by holders of certain licences to provide services of a different category. Those arrangements have been superseded by Amendment No. 215.

Moved, That the House do agree with the Commons in their Amendment No. 212.--(Lord Inglewood.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

213

Schedule 2, page 99, line 30, leave out 'such' and insert 'non-simulcast'.


214

Page 99, leave out lines 31 to 51 and insert--


'(2) Where--
(a) the coverage area of the local radio multiplex service is to a significant extent the same as that of another local radio multiplex service, and
(b) the person concerned is not providing any non-simulcast service by means of that other local radio multiplex service,
sub-paragraph (1) shall have effect as if the reference to one non-simulcast service were a reference to two such services.
(3) In this paragraph "non-simulcast service" means any local digital sound programme service other than one which--
(a) is provided by a person who holds a licence to provide a local radio service, and
(b) corresponds to that local radio service.
(4) For the purposes of sub-paragraph (3)(b) a local digital sound programme service corresponds to a local radio service if, and only if, in every calendar month--
(a) at least 80 per cent. of so much of the local radio service as consists of programmes, consists of programmes which are also included in the local digital sound programme service in that month, and
(b) at least 50 per cent. of so much of the local radio service as consists of such programmes is broadcast at the same time on both services.
(5) The Secretary of State may by order--
(a) amend sub-paragraphs (1) and (2) by substituting a different numerical limit for any numerical limit for the time being specified there, and
(b) amend sub-paragraph (4)(a) or (b) by substituting a different percentage for any percentage for the time being specified there.
(6) In subsection (4) "programme" does not include an advertisement.'.

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215

Page 99, line 51, at end insert--


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