CHAPTER 5: Digital radio: What needs
to be done?
104. If the UK is to go ahead with digital switchover,
there needs to be the utmost clarity as to what will happen, in
order that the consumer and the industry can proceed with confidence.
This chapter looks at the main areas where we think that clarity
is required or where the Government's policy needs to be more
widely disseminated.
DIGITAL COVERAGE
National coverage
105. First and foremost, the Government must
ensure that digital coverage is comparable to that of FM. Improved
coverage is required for the achievement of all other objectives.
Improved coverage will encourage more digital listening, more
purchases of digital receivers, greater advertising revenues generated
by digital stations, and more investment in digital content. Although
comparability of coverage including coverage of major roads is
one of the two criteria set down by the Government, the position
is anything but clear. Indeed, it is claimed that the 98.5 per
cent coverage, which FM currently provides, is simply not achievable
by 2015—the year set out in Digital Britain (p 79).
106. As explained in Chapter 2, there are two
national digital radio multiplexes. The BBC's national multiplex
currently covers around 85 per cent of the population, and the
BBC confirmed that transmitters are now being built which will
increase this to 90 per cent by 2011 (p 100). It needs to
build around 140 transmitters to achieve this five per cent increase—compared
to 90 transmitters which achieved the first 85 per cent (p 100).
107. The BBC further estimates that, "to
extend the network from 90 per cent population coverage to FM
equivalence would require several hundred additional transmitters,
and might take approximately seven years to complete"[63].
If this estimate is accurate, the timing of build-out is a major
issue. It is difficult to see how it can be reconciled with a
switchover date of 2015. Caroline Thomson, Chief Operating Officer
of the BBC told us that covering this final segment "costs
an awful lot of extra money" (Q 365). She said it would
almost double what the BBC spends on digital transmission (Q 366).
The Government has subsequently told us that the extension of
BBC national coverage from 90 to 98.5 per cent will cost about
an additional £10m per year (p 162). The BBC has noted
that this is "broadly consistent with our own expectations"
(p 114). Caroline Thomson said that the BBC would carry out
this extension "subject to a licence fee settlement that
enabled us to do it" (Q 369). This was disputed by Siôn
Simon MP who indicated that the BBC would be able to "absorb
that within its current budgets" (Q 495). Given the
importance for the Government's plans for digital switchover of
universal reception of the BBC's national stations, it is essential
that a firm and unambiguous plan and funding for the completion
of build-out of the BBC's national multiplex is put in place as
soon as possible.
108. The commercial national multiplex, Digital
One, currently reaches about 87 per cent of the population.
Digital Britain says that "the national commercial multiplex
already matches Classic FM"[64]—and,
by implication, meets the criterion of comparable FM coverage.
Ideally, this coverage would be greater: the Digital Radio Working
Group proposed that it should be extended to 94 per cent. While
we acknowledge that the current financial problems of commercial
radio make further build-out of the national commercial multiplex
difficult at this time, we urge the Government to ensure that,
in due course, it is extended in line with the Digital Radio Working
Group's proposal.
Regional and local coverage
109. Part of the Government's own criterion for
Digital Radio Upgrade is that local DAB coverage must reach 90
per cent of the population—currently it reaches around 75
per cent of the population. There are six regional and forty local
commercial multiplexes currently in operation. The Government
is facilitating mergers and extensions of existing multiplexes
into currently un-served areas and allowing regional multiplexes
to consolidate and extend to form a second national commercial
multiplex[65].
110. The BBC coverage of its nations and local
services depends on the commercial multiplex operator in each
area. "The BBC has taken up the capacity reserved for it
in every instance, but the lack of a licenced multiplex in some
areas of the country (Cumbria, Suffolk, and the Channel Islands
in particular) means that currently the BBC Local Radio stations
for those area have no route to digital carriage" (p 100).
Many local commercial stations only provide coverage to urban
areas, and not to more sparsely populated areas further afield.
Digital Britain therefore calls for partnerships between the BBC
and commercial multiplex operators. "In areas where the BBC's
need to deliver universal access is not matched by the economic
realities of the local commercial market, the BBC will need to
bear a significant proportion of the costs"[66].
Siôn Simon MP told us that the Government expects the
extension of coverage to FM levels to cost the BBC between £10m
and £20m a year and that this amount will be absorbed within
the BBC's current budgets (Q 493-495).
111. The BBC had expressed concern about the
financial outlook for many of the local and regional commercial
radio multiplexes as well as the significant misalignment of their
total survey areas with those of BBC services. The BBC called
for accelerated negotiations on the future of local and regional
commercial multiplexes[67].
The BBC has confirmed to us that it has not yet reached an agreement
with commercial radio on how local digital coverage will be extended
(p 114). We recommend that, as a matter of urgency, the Government,
the BBC and commercial radio agree a plan and allocation of funding
responsibility for local multiplex build-out in order that local
DAB coverage can be raised to 90 per cent.
THE FUTURE OF ANALOGUE RADIO
112. The Government needs to offer greater clarity
on the continuance of broadcasting on FM. Siôn Simon MP
told us that the transmission infrastructure of FM is ageing and
that it is unlikely to be economic to renew it (Q 484). He
said that government policy was to avoid "piecemeal disintegration
of the FM infrastructure in a disorderly way" (Q 484).
This was confirmed by Arqiva, who have a monopoly over supply
of the DAB network (p 186). The Government said last year
that capital investment of up to £200m would be needed to
maintain a full national FM network over the next 20 years[68].
When pressed on how long the FM network might be available for
broadcasting, Siôn Simon MP was not able to give assurances.
Since ultra-local and community radio are to continue to broadcast
on FM for the foreseeable future (and other services until 2015,
or longer if the Upgrade criteria are not met), we recommend
that the Government commissions and urgently publishes a report
on the state of the FM network, what investment might be required
to keep the network functioning and where any maintenance costs
would fall.
113. There is also uncertainty about the Government's
longer term intentions for the FM network. The Government has
said that its intention has always been "that the ultra-local
services which remain on FM after the Digital Radio Upgrade should
only do so temporarily"[69]
Yet Siôn Simon MP thought that radio services would
remain on FM well beyond 2020 (Q 507). Lord Davies of Oldham
said, on 3 March 2010 during the debate on the Digital Economy
Bill, that "for the foreseeable future, the Government will
consider FM radio to be part of the broadcasting firmament"[70].
114. There is further uncertainty about the long
term part to be played by AM services. What will happen to AM
community and ultra-local services? Will Radio 4 on Long Wave
at 198 kHz still have a role in the UK's emergency communication
systems? If AM analogue services are to continue then new digital
radio sets should be able to receive them. It is important that
the Government makes clear its plans for AM because the effectiveness
of the AM Long Wave medium for emergency communications depends
on listeners having AM-capable receivers.
115. Jaqui Devereux, Director of the Community
Media Association made clear that, for community radio, analogue
radio offers clear benefits—"it is cheap to produce,
it is cheap to transmit" (Q 658) and it is local (Q 673)—and
said that she would like the Government to say that FM will stay
switched on for the next 30 years, or whatever it is, for the
long term future" (Q 656). Greater clarity would help
the radio industry to plan its investment. It is also important
to consumers who are considering purchasing or disposing of radios.
In particular, the Government should clarify whether or not it
intends that ultra-local and community radio should migrate onto
digital some time after the Upgrade date. We urge the Government
to clarify its longer term policy on the use of FM and AM for
radio broadcasting.
116. A related point is the concern of local
radio stations that digital switchover will create a two tier
structure in radio, with the FM tier being, in effect, left behind.
This concern could be addressed by developing a single electronic
programme guide[71] or
unified channel list, capable of carrying both digital and analogue
stations. This would remove any suggestion of discrimination against
FM, since the listener would not be aware which platform was the
source of particular programmes. As long as it was simple to use,
it might also help disadvantaged listeners, who could have difficulties
knowing where to access particular services.
117. The Government has committed to ensuring
the development of such a guide which would list all available
DAB and FM stations in alphabetical order[72].
Laurence Harrison, Director of Consumer Electronics at Intellect
told us that discussions were taking place, but were still at
the technical stage (Q 607). He also confirmed that the industry
was liaising with the RNIB and other organisations about additional
functionality on digital radios for disadvantaged groups (Q 608).
We recommend that the Government seeks assurances from the
electronics industry on when a single electronic programme guide
will be available. The Government should include these assurances
in the advice it issues to consumers on digital switchover.
CAR RADIOS
118. A major question is what will happen to
car radios. In-car listening accounts for about 20 per cent of
all radio listening hours. However, of the 30m vehicles on the
road, less than one per cent of them are currently equipped to
receive DAB through a compatible digital receiver. This is one
of the major areas of uncertainty (p 80).
119. It is true that there is already a number
of car models that have digital radios as a standard fitting.
RadioCentre pointed out that Ford now fits them as standard on
all medium to top range cars and fifteen vehicle manufacturers
from Audi to VW fit DAB as either standard or an optional upgrade
for around £55 (p 215). The Society of Motor Manufacturers
and Traders (SMMT) said that, given that the lead time for development
of new vehicles is about four years, incorporating digital radios
into new models by 2013 will be a challenge, but achievable.
120. Laurence Harrison added that a key consideration
in terms of incorporating digital radios as standard was the ability
to build for at least a European market. "What we are seeing
now is ... many more European states committing to ... the family
of digital radio standards and the introduction of the multi-standard
chip set which will enable economies of scale and also manufacturers
to have the confidence ... that it will be a viable option across
Europe" (Q 571). It will also be more attractive to
consumers, since the digital radio in their vehicle will work
when they take it to mainland Europe. The SMMT have told us that
the multi-standard chip is the preferred option for vehicle manufacturers
and that, as the cost comes down, it will become more viable for
manufacturers to use (p 185). We recommend that the Government
should work with manufacturers to ensure that digital car radios
are fitted with multi-standard chips as soon as possible and inform
consumers of availability and benefits of digital radios containing
the multi-standard chip.
121. The fitting of new vehicles with digital
radio is only part of the story. The SMMT estimates that there
will be 20m vehicles in use in 2015 that would need to be fitted
with convertors at the owners' expense, to allow continued use
of existing analogue radios. Retro-fitting of digital radios is
impractical because of vehicles' increasingly integrated electronic
systems (Q 564 and p 167). The consumer organisation,
Which?, has tested one of the conversion devices currently on
the market and concluded that "although it is reasonable,
it does not work well as we would like in cars with small windscreens"
(p 206). Paul Everitt, Chief Executive of the SMMT,
agreed that the currently available convertors were first generation
technology and fairly cumbersome and "not necessarily providing
the kind of quality that drivers may wish" (Q 560),
but Laurence Harrison was confident that with more competition
and innovation these products would improve (Q 561). Nevertheless,
20m car owners will face an additional cost of purchasing converters
for their cars and the aim must be to make this process as smooth
and cheap as possible.
122. The conclusion we draw from this evidence
is that the technology is in place and the products available,
with improvements on the way, to make in-car listening digital.
But the industry is clearly seeking greater certainty that digital
switchover will happen to drive through the process of development
and conversion. We agree that there is a risk that consumers may
put off decisions about requesting a digital radio as an option
on a new car or retro-fitting a device to an existing car, thus
reducing the chances of in-car listening contributing significantly
to meeting the listening criterion for Digital Radio Upgrade.
We recommend that the Government, in collaboration with the
manufacturers, should provide guidance to the public on in-car
digital listening, including advice on conversion kits available
and likely to be available within the timeframe of digital switchover.
123. A further issue related to vehicle reception
is the future availability of traffic reports to satellite navigation
systems (sat-navs) and digital receivers. Paul Everitt told us
that, at present, there was no digital equivalent to the traffic
information on FM, which was a cause for concern and some clarity
was required on "what the plans are to adapt traffic information
so that it can be integrated into the new technology" (Q 576).
He added that the motor industry was working on the whole area
of intelligent transport systems to reduce congestion and minimise
environmental impact, so the industry needed clarity on "the
kind of architecture we will be working with" (Q 576).
So far, the Department for Transport had not offered any guidance
(Q 581). We recommend that, as a matter of urgency, the
Government should liaise with the vehicle manufacturers to provide
clarity on how traffic reports will be provided to motorists with
digital radios and built-in satellite navigation systems, thus
allowing manufacturers to incorporate this into their vehicle
development.
DISPOSAL OF ANALOGUE RADIOS
124. There could be as many as 100m analogue
radio sets which will not be required after digital switchover
and will therefore potentially be for disposal. The number will
probably not be this high because some will be retained to listen
to local and community FM services. Others, which are contained
within another device, such as a mobile phone or a CD player,
will become redundant but will not be disposed of until the main
device is no longer required. Laurence Harrison told us that converters
for analogue radios were technically possible but, for standalone/kitchen
radios, would cost virtually as much as a new digital radio. They
were only likely to be attractive for converting radios in expensive
hi-fi systems (Q 591-2).
125. Nevertheless, the reality is that there
will be tens of millions of radios which will become redundant.
Many households will face a substantial bill if they want to replace
each radio that they own. It is one of the most sensitive issues
that the Government will have to face at the time of the switchover.
There will be entirely understandable complaints if the public
is being forced to scrap perfectly serviceable radios. Against
this background, there are already industry proposals for some
form of scrappage scheme—on the lines of the recent car
scrappage scheme—where consumers would be given a discount
on the purchase of replacement radios. There may also be a secondary
market for these radios or their components.
126. There are no easy answers to these questions,
but a number of steps can be taken to alleviate the problem. First,
the Government must ensure that advice goes to retailers and the
public that when purchasing radios, consumers should purchase
sets that include a digital tuner. This will prevent the problem
getting worse. Second, the Government should encourage the industry
to devise a sensible scrappage scheme, recognising that the industry,
manufacturers and retailers, will benefit heavily from the new
sales generated by digital switchover. Thirdly, we recommend that
the Government inform consumers as soon as possible as to how
the Waste Electrical and Electronic Equipment (WEEE) regulations
will operate for disposal of analogue radios.
CLARITY ON DIGITAL RADIO STANDARD
127. We do not favour a change of digital radio
standard in advance of Digital Radio Upgrade. The Government said
last year that the biggest barrier to radio's digital future is
"the lack of clarity and commitment to the DAB platform"[73].
It went on to confirm that "for the foreseeable future DAB
is the right technology for the UK"[74].
While we are aware that DAB+ standard offers some advantages over
DAB, and recognise that the UK may move to a different standard
at a later stage, we think that the continuing debate over whether
the UK should move now to an alternative standard is unhelpful
and only likely to add to the confusion of listeners and consumers.
128. We were particularly struck that Grant Goddard,
an independent radio analyst, and John Myers, author of a review
of localness in radio for the Department for Culture, Media and
Sport[75], when asked
whether we should stay with DAB or switch to DAB+, said we should
stay with DAB (QQ 346-7). Grant Goddard's arguments were
that DAB+ would not solve the problem of finding an economic model
for commercial digital radio; and secondly that consumers have
invested substantial amounts of money over ten years in digital
receivers, almost all of which cannot receive DAB+. "I do
not think it is fair on the consumer suddenly to adopt a new codec
for the broadcast system which means that those consumers have
to throw away their radios" (Q 347). We therefore
recommend that the Government should make clear to the public
that DAB will remain the digital radio standard for Digital Radio
Upgrade.
129. At the same time, we recommend that the
Government should set a date by which all new digital radios should
contain the multi-standard chip, giving the UK the option of a
subsequent move to a different standard. We also recommend that
the cost benefit analysis, which the Government has undertaken
to carry out, should include an analysis of the costs and benefits
of a subsequent move to another standard.
INCREASING PUBLIC AWARENESS
130. Our impression from the submissions that
we have received from members of the public is that the Government's
policy on digital radio, as set out in Digital Britain, is anything
but well known. We do not think that there is general awareness
that Digital Radio Upgrade will only go ahead once the two criteria—on
listening and coverage—are met. We received an assurance
from Siôn Simon MP that these criteria would be observed
and that Upgrade would not take place until two years after the
country was ready (as measured by these criteria). We think that
this would provide both clarity and reassurance to the general
public.
131. Likewise, the effect of the Government's
policy on the structure of radio in the UK is not widely appreciated.
The proposed three tier radio structure, with the third, ultra-local
tier continuing on FM, and the greater choice of channels available
in most areas are two aspects. Another is the likelihood of more
radio station mergers, sharing of premises, changes of station
location and broadcasting areas and the effect that this will
have on what listeners have come to see as "their" local
radio. We recommend an early and extensive information campaign
to publicise the Government's digital radio policy, its rationale
and its implications for listeners.
STEPS TO INCREASE PUBLIC CONFIDENCE
132. We think that the Government also needs
to provide further information to the general public on the equipment
needed to listen to the radio after switchover and the factors
that need to be taken into account when acquiring new digital
equipment. We were particularly struck by the evidence of Bryan
Lovewell, the Chief Executive of RETRA, the association of independent
electrical retailers, that at present a customer wanting to buy
a radio would get "rather sketchy" advice from a retailer
because RETRA had not been briefed fully by Digital Radio UK (QQ 619-620).
He said that his members required more guidance on what was expected
of them (Q 621). We recommend that, as a matter of urgency,
the Government, Digital Radio UK, representatives of the electrical
manufacturing and retailing industries, and representatives of
the vehicle manufacturing and retaining industries should agree
advice to consumers about purchase of digital radio equipment.
We also recommend the introduction of a "kitemarking"
scheme for digital radios, to include information on power consumption.
133. We support the suggestion in Digital Britain
that, in order that any future upgrade to a different digital
standard should have minimal impact on listeners, all radio receivers
sold in the UK should meet at least the WorldDMB profile 1 (the
multi-standard chip) and that such equipment should be clearly
labelled, for example using a "digital tick"[76].
We recommend that the Government explains in a public communications
campaign on digital radio that, while DAB radios will continue
to operate for the foreseeable future, radios containing the multi-standard
chip will provide insurance against a future change of digital
standard and will also work on the continent of Europe.
A HELP SCHEME FOR DOMESTIC RADIO
SWITCHOVER
134. Radio is listened to very heavily by elderly
people and we believe that the same arguments as were used in
support of the Help Scheme for television also apply to domestic
use of radio. We recommend that the Government confirms as
soon as possible that a help scheme with special focus on disadvantaged
groups will be part of the Digital Radio Upgrade programme. In
this case, funding should be raised through general taxation,
not through the licence fee.
PROMOTION OF DIGITAL RADIO
135. Since the announcement of the Government's
policy on digital radio in June 2009, and the establishment of
Digital Radio UK in December 2009, the radio industry has made
progress in promoting digital radio and forging cooperation with
manufacturers and retailers. It would have been helpful if the
same urgency had been evident in the promotion of digital radio
several years ago. While we welcome the fact that promotion is
underway, there is more that needs to be done. We are not convinced,
for example, that the benefits of increased functionality and
interactivity have been promoted in a way that will appeal to
the majority of radio users.
136. The build-out of digital radio coverage
will bring improved reception to some listeners, but the availability
of more stations does not appear to be a major benefit to listeners,
given the high levels of satisfaction with current radio services.
One way of promoting digital radio would be through further investment
in content available only in digital. We appreciate the financial
difficulties of commercial radio sector, with falling revenues,
but improved availability of attractive digital content seems
to have been an important factor in securing public support for
digital television switchover: so far radio has not matched television
in this respect. In our view, this is a challenge that commercial
radio cannot avoid. If investment in more and better digital-only
content were to be left to the BBC, there would be a risk that
listenership would be drawn increasingly to the BBC, further reducing
commercial radio revenues.
137. The BBC's new strategy proposals, which
are the subject of a public consultation, include the proposed
closure of two of the BBC's digital-only radio stations: 6 Music
and the Asian Network. This proposal sends a negative signal to
consumers about the BBC's commitment to digital radio—and
the direction of travel on digital radio in the UK—and weakens
the already limited case for listeners to invest in digital equipment.
This is an issue that will have to be addressed if digital listening
is to reach the 50 per cent level at which the Government would
be able to implement its Digital Radio Upgrade programme. We
recommend that the Government and broadcasters consider how increased
production and dissemination of digital radio content can be encouraged.
WILL PASSAGE OF THE DIGITAL ECONOMY
BILL PROVIDE GREATER CLARITY?
138. We were struck by the expectation of commercial
radio and manufacturing industry that the passage of the Digital
Economy Bill would give greater certainty and clarity to the process
of switchover to digital radio, and lead to greater activity.
Laurence Harrison told us that "what industry works best
with is clarity in the market. The Digital Economy Bill and the
targets within it provide that" (Q 562). Paul Everitt,
Chief Executive of the SMMT also spoke of the "greater certainty"
that the Bill would create (Q 565), and that "the more
that we create certainty, the more that the broadcasters improve
coverage and make the content attractive, then consumers ... will
want to access that and that will create more demand ..."
(Q 566). He added that "a change in market circumstances,
which a commitment to digital provides ... catalyses the market
place" (Q 571).
139. The clauses of the Bill relating to digital
radio are essentially enabling legislation. The Bill enables the
Secretary of State to set a date for digital radio switchover,
but provides no more certainty on the date of switchover than
the Digital Britain report of June 2009. Laurence Harrison has
told us that, from the industry's perspective, the Bill's importance
is that it signifies a clear commitment to digital radio, despite
the lack of detail. He compares it to the announcement of television
switchover in September 2005, following which sales of digital
televisions jumped from 800,000 a year to 2.5m a year. The 2005
announcement was not subject to meeting criteria, but Laurence Harrison
has told us that "even though we still have to hit the criteria
in this instance we know what they are and we know what the target
date is. In the eyes of the industry that makes this Bill as important
as the 2005 announcement" (p 185).
140. It may be that Laurence Harrison's perception
is correct and that passage of the Digital Economy Bill will have
the effect of galvanising broadcasters and manufacturers to make
the investments which will entice listeners to digital in sufficient
numbers to permit the Upgrade programme to go ahead. However,
we remain sceptical about the natural attractions of digital radio
and are not convinced that listener and consumer behaviour will
follow the same path as digital television.
A DATE FOR RADIO SWITCHOVER
141. In spite of the firm statement in Digital
Britain that digital switchover would be completed by the end
of 2015 recent Government statements have been more cautious.
In the House of Lords on March 3 2010, the Government minister
Lord Davies of Oldham had this to say: "What date will all
this be effected? That is a pointed and precise but nevertheless
very difficult question. We have indicated that 2015 is ambitious
although it is achievable. If we do not set a target there is
no stimulus to all those who can make a contribution to effecting
this successfully to get to work and do so. So we want a date
and have identified 2015 but we recognise that it is a challenge."
142. We agree that a target date is necessary
to provide some certainty for both the public and the industry.
The radio industry in particular will suffer financially the longer
it is expected to provide dual transmission in analogue and digital.
We are also mindful of the fact that the Digital Radio Working
Group suggested a target date for switchover of 2017 and the Government
changed this to 2015. Given this history it seems sensible to
us that we should retain 2015 as the target date. If the Government
was to implement the recommendations in this chapter, it would
substantially increase the chances of this target being met.
63 Digital Britain: the BBC's role; the BBC Executive's
response to Digital Britain-the interim report, p 37 Back
64
Digital Britain, June 2009, p 97 Back
65
Ibid, p 97 Back
66
Ibid, p 97 Back
67
Digital Britain: the BBC's role; the BBC Executive's response
to Digital Britain-the interim report, p 37 Back
68
Digital Britain, June 2009, p 92 Back
69
Ibid, p 95 Back
70
House of Lords Official Report, 3 March 2010, column 1517 Back
71
An electronic programme guide allows the listener see what programme
is on now and next, and to search programmes Back
72
Letter of 10 March from Lord Young of Norwood Green, Minister
for Postal Affairs and Employment Relations to Lord Fowler, available
at: http://interactive.bis.gov.uk/digitalbritain/digital-economy-bill/ Back
73
Digital Britain, June 2009, p 92 Back
74
Ibid, p 95 Back
75
An Independent Review of the Rules Governing Local Content on
Commercial Radio, April 2009 Back
76
Digital Britain, June 2009, p 95 Back
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