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Analogue Commercial Radio Licence Renewals

Volume 594: debated on Tuesday 24 March 2015

The UK has a rich and thriving commercial radio sector, providing a wide range of programmes that appeal to a variety of different tastes. Commercial radio plays a key role in the provision of national, international and local news, delivering large amounts of locally produced and relevant content, and providing a dynamic platform for the UK’s world leading music and entertainment industries.

A key part of supporting commercial radio is the need to create and maintain a stable regulatory framework that fully supports continued investment by commercial radio in the face of increased competition for audiences and changes in patterns of media consumption.

In December 2013, the Government concluded that it was not the right time to commit to a future radio switchover or set a firm or indicative timetable for such a move. This remains the Government’s view. However, the Government fully support the transition to digital radio and have provided up to £7.75 million to fund the expansion of local digital radio coverage to approach commercial FM coverage by September 2016. An effect of the Government’s decision in December 2013 was that the licences which were renewed for seven years under the provisions of the Broadcasting Act 1990—as amended by the Digital Economy Act 2010 Act—will begin to expire from 2017, before a switchover is possible, and leaving around 60 licences facing expiration.

In November 2014, the Government therefore consulted on whether the current legislation should be amended to allow further renewal of existing analogue commercial radio licences without re-advertising the affected licences. Our consultation found that there is widespread support for renewal of the affected licences. Although some respondents considered that the sector and listeners could potentially benefit from re-advertisement of these licences, Government have concluded that the benefits of allowing further renewals outweigh any potential benefits of stations re-competing for licences.

For this reason, the Government believe it is appropriate to give Ofcom the ability to further renew national and local analogue commercial radio licences under sections 103B (which covers national licences) and 104AA (which covers local licences) of the Broadcasting Act 1990 for a further period of five years. We believe a renewal period of this length will drive momentum in the continued transition to digital radio, and provide commercial radio with the stability it needs to support this transition.

The Government therefore intend to lay a Legislative Reform Order in Parliament as soon as possible to bring forward this change.

The Government are also today publishing their response to the consultation, alongside the full impact assessment and findings of an independent study carried out by value partners into the advantages and disadvantages of the proposals on which we consulted.

We believe this important change will continue to support the whole of commercial radio and provide the necessary stability for the sector as a whole as it moves towards a digital future.