Digital switchover of television and radio in the United Kingdom - Communications Committee Contents


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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