Thursday, 4 February 2010

Small local stations & the Digital Economy Bill: debated in the House of Lords

The issue of the potential impact on small, local radio stations of the government’s proposed ‘Digital Radio Upgrade’ was first raised in this blog in July 2009, which stated:

“… the potential losers from Digital Radio Upgrade would seem to be:
• commercial stations presently carried on local DAB multiplexes who might have to be bumped because there is no longer the capacity after amalgamation
• local commercial stations presently carried on their local DAB multiplex who will have to quit DAB because they do not wish to serve the enlarged geographical area after amalgamation of multiplexes (for example, the cost of DAB carriage for Kent/Sussex/Surrey is likely to be considerably higher than Kent alone)
• new entrants

In the rush to frame proposals in Digital Britain that respond to the circumstances of the large radio players with substantial investments in DAB infrastructure, it might appear that the voices of the smaller local commercial radio stations have got lost in the stampede of lobbying. These stations might be small in number but many of them remain standalone, so they will not benefit financially from the relaxation of co-location rules. Digital Britain is condemning many of them to remain on FM (or AM), leaving the large radio groups to dominate the DAB platform.

Although the proposals in Digital Britain have been framed to ‘help’ local commercial radio, overwhelmingly they will reduce the financial burden of group radio owners with local station operations in adjacent areas, and of group owners who have invested in DAB infrastructure. There is little in the way of financial benefits for independent local commercial stations, or for potential new entrants, both of whom face being crowded out of the DAB platform.”

Last night, the House of Lords debated three amendments, amongst several, to the Digital Economy Bill which proposed that the voices of small, local FM radio stations and their listeners should be considered before the government commits the UK to digital radio switchover.

These amendments were eventually withdrawn after debate (see below) during which the government minister, Lord Young, made vague assurances that the views of listeners and others would be canvassed.

RadioCentre, the commercial radio trade body, subsequently commented: “Clause 30 (which relates to the switchover powers) was debated in detail, with proposed amendments withdrawn following debate and assurances from Government.”

Amendments 236 & 237
Moved by Lord Howard of Rising

236: Clause 30, page 33, line 17, after “to” insert “ — (a)”
237: Page 33, line 19, at end insert "; and
( ) the needs of local and community radio stations; and
( ) the needs of analogue radio listeners."

Lord Howard of Rising: My Lords, in moving this amendment, I will also speak to Amendment 237. The amendments are designed to ensure that attention is paid to the local and community radio sectors and the many millions of analogue radio listeners — to which I should add the providers of satellite systems about which the noble Lord, Lord Maxton, spoke. They should all be listened to before any decision is taken about switchover. We on these Benches have not hidden the fact that we remain unconvinced that the Government’s plans to switchover in 2015 are realistic. We do not believe that audiences will be ready by then. The audience must remain at the forefront of all our considerations when we debate these parts of the Bill. As drafted, the Secretary of State will have to pay heed only to Ofcom and the BBC. Despite the BBC’s dominance in the radio industry, there is a strong argument that it would be helpful for community and local radio stations to be consulted. Indeed, the whole commercial radio sector should be included. It does not seem unreasonable to suggest that the Secretary of State consult the other parts of the industry that will be affected. It would also seem both reasonable and important for the Secretary of State to consider the needs of those who listen to analogue radio. The Government stated in their final Digital Britain report that they would start the countdown to switchover once digital listening made up 50 per cent of radio listening. That seems far too low. It would still mean that there were millions of listeners not using digital. Our amendment would ensure that the needs of those listeners were taken into account before the Secretary of State could nominate a switchover date. The amendment is simply an attempt to ensure that all who will be affected by switchover are considered before the Secretary of State nominates a date. As I have said, it does not seem unreasonable to ensure that listeners are placed at the forefront of these considerations. I hope that the Committee will agree. I beg to move.

Lord Gordon of Strathblane: My Lords, I think that I can offer some reassurance to the noble Lord opposite. Unless all those targets were going to be met, virtually the entire commercial radio industry would not support the clause, which it does, with one minor exception. The feeling is that this is an empowering clause that does not oblige the Secretary of State to set a date. Indeed, he can set a date and then withdraw it if precisely those targets mentioned by the noble Lord are not met. The radio industry seems to feel that the Government have got it right. I hope that that reassures him.

The Lord Bishop of Manchester: My Lords, in speaking to the amendment moved by the noble Lord, Lord Howard of Rising, I recall that in an earlier debate this evening, the noble Lord, Lord De Mauley, expressed deep disappointment that I was not supporting an amendment that stood in the names of the noble Lords. I hope that they will now feel slightly happier, because I support this particular amendment. I do so because the Bill as it stands provides very little safeguard for those who are living in remote areas, some of them perhaps still relying on long wave, let alone FM, for their radio reception. I take the point that the noble Lord, Lord Howard, made about the Digital Britain report. If I recall correctly the point was made at Second Reading that, when 90 per cent has been reached, there will still be one in 10 people — some of whom would presumably lose access via their radio to all the national, BBC and commercial radio stations — for whom we really ought to have the greatest concern. Short of listening via the internet — which I know the noble Lord, Lord Maxton, though no longer in his place, would be urging us to do — or Freeview, there is nothing that the 10 per cent would be able to do until the DAB signal catches up with the FM one. Through this and other similar amendments, I hope the Government will come to recognise that there are some very serious reservations about giving the Secretary of State the power to set the switchover date without proper statutory consideration of the wider impact of that decision on those communities who are often disconnected from British society physically, and those small stations that serve them. I am much in sympathy with the amendment.

Baroness Howe of Idlicote: My Lords, we shall come to rather more detail about this aspect shortly. I, too, support the amendment and the basis on which it is being put forward. We spent this morning taking evidence from the commercial radio stations, both from those which disagreed with the main grouping and those which had done some amount of research over time. The more one looks at this whole area, it is quite clear that there is a big problem about when this is going to happen, stretching into the future, causing a considerable number of problems. At the very least, this amendment requires others — those concerned and those involved — to be consulted. So, like the right reverend Prelate, I certainly support the amendment.

Lord Young of Norwood Green: My Lords, Clause 30 states that before nominating a switchover date, the Secretary of State must have regard to any reports submitted by Ofcom or the BBC under the terms of Section 67(1)(b) of the Broadcasting Act 1996. The purpose of these reports is to review how long it would be appropriate for radio services to continue to be broadcast in analogue form. These reports should have regard to the provision of digital radio multiplexes, availability of digital radio services and the ownership of digital receivers. In order to produce these reports, Ofcom is required to consult multiplex licence holders and digital radio service providers. In addition — here I address the concerns of the noble Lord, Lord Howard, the noble Baroness, Lady Howe, and the right reverend Prelate the Bishop of Manchester — the Secretary of State must, on requiring these reports, consult such persons representing listeners and such other persons as he thinks fit, as provided in Section 67(4). The noble Lord, Lord Howard, talked about plans to switchover in 2015. That is a target that we have set, not a precise date, as I hope he will recognise. The experience that we had with the TV switchover, which in some ways was even more fraught with difficulty, has been an outstanding success so far. One of the largest switchovers, in the Manchester area, recently went over without a hitch. We had a lot of preparation, help and assistance. We want to adopt a similar approach. It is not just about the 50 per cent of listeners. We have also talked about DAB achieving the same coverage as FM, which is something like 95 per cent these days. We are well aware of the importance of that. I also point out another factor which I think is important. The prices of reasonable quality DAB radios have been coming further and further down. That is important for less advantaged parts of our population. We are aware of the concerns expressed. We believe that the clauses have got it right. We understand the concerns, which is why I have taken time to give some further assurance. Given the breadth of the requirements to consult already proposed in the draft Bill and our commitment to consult widely before setting a date, we believe that the amendment is unnecessary. With the explicit assurances I have given, I hope that the noble Lord will feel able to withdraw the amendment.

Lord Howard of Rising: I thank the Minister for his remarks. I am grateful to the right reverend Prelate the Bishop of Manchester and to the noble Baroness, Lady Howe, for their support for the amendment and to the noble Lord, Lord Gordon, for his reassurance. All I am doing is asking the Government to pay attention to and listen to the listeners before they take too drastic an action and leave a lot of people very unhappy. From his remarks this would appear to be the case, so I beg leave to withdraw the amendment.

Amendment 236 withdrawn.
Amendment 237 not moved.

Amendment 239A
Moved by The Lord Bishop of Manchester

239A: Clause 30, page 33, line 21, after “services,” insert “while retaining the use of the FM Band for those local and community radio services, including special interest services, for which digital transmission using DAB is not a suitable method due to —
(i) the size of local DAB multiplex areas, or
(ii) the unavailability of capacity on the local DAB multiplex,”

The Lord Bishop of Manchester: This amendment pursues further the issue about retaining the use of the FM band for local and community radio services. I invite your Lordships to put yourselves in the shoes of someone running a small FM radio station, serving a population of 100,000 people in and around, let us say, King’s Lynn. As it stands, that station’s future seems to be to bid for a space on a local multiplex. That would mean that it would begin broadcasting to almost 600,000 people. Such a shift would significantly change the character of that station. Listeners from a much wider area would start to phone in to programmes and would, for instance, start to demand their own slice of news output. The station manager would be forgiven for wishing to stay on the FM band as long as possible, until a better solution was found for smaller stations to find a home on the digital spectrum. Consider then the prospect of the only way of going digital to be to join an even larger regional multiplex which covers the whole of East Anglia and serves well over 1 million listeners. That is the kind of situation that is faced by a number of small commercial radio stations if digital rollout continues as planned. Their pathway towards a digital future seems shrouded in a kind of fog, partly because of the large size of DAB multiplex areas and the lack of capacity on some multiplexes .Forcing those small-scale stations to broadcast to much larger areas than their current coverage would alter their feel and alter their connection with their audience. It would undermine the integrity that they hold as local broadcasters and potentially damage their ability to service platforms which stimulate and reflect local democracy and social action. There is also a danger that counter-intuitively such stations would struggle to attract advertising spend from local businesses which do not wish to market themselves to audiences up to 100 miles away. So, socially and commercially, beaming local stations to regional audiences is, frankly, not in anyone’s interests. As for the lack of space on DAB in some areas of the country, take, for example, the multiplexes currently covering Humberside or, in my own area, of Manchester where there is virtually no space available. Even with just the larger stations currently on board, capacity is running out in some areas. I understand that some stations that gain access are broadcasting in mono rather than in stereo in order to preserve bandwidth. The limitations of DAB for local and community stations are well acknowledged by Ofcom. Indeed, it is already planning for small-scale commercial and community stations to stay on FM in the medium term as the most appropriate technology for those stations in terms of both coverage and cost. The vacation of FM band space by the removal of national and large local stations would free up more capacity for smaller stations. Ofcom sees this as a natural staging post in radio’s digital evolution. Nowhere, however, is this halfway house given a firm legal footing. In case my amendment is misinterpreted as a luddite attempt to hold back the march of progress, let me make clear that it is intended as a temporary but crucial platform to support the transition to digital of small-scale local stations, which not only serve geographically defined areas, but also identity-defined and interest-defined groups. Your Lordships may remember the furore caused when in 1992, BBC Radio 4 proposed to transfer use f its long-wave frequency to a rolling news service. The BBC reckoned that FM reception was good enough and the vast majority of the country could pick it up without a problem. But those living in remote parts of the United Kingdom, and even in exceptionally hilly inland parts, knew different. The determination to push ahead with cutting Radio 4 from the long wave was met with purposeful if well-mannered resistance, as one might expect from Radio 4 listeners. In fact, I am told that the sight of 200 protestors in tweed and twinsets marching down Upper Regent Street was enough to help the BBC to see the error of its ways. Let us not make a similar mistake. After all, FM had at that point been around for almost 40 years. We have had DAB for less than a decade. The future of local radio — which is so crucial to forging community cohesion and identity, and promoting local social action and democracy — should not be left to chance. That must mean embracing a multi-platform ecology which creates a pathway towards digital broadcasting for local radio, retaining space for them on FM until such time as a digital platform offers them the right environment to continue what they do best. I beg to move.

Lord Clement-Jones: My Lords, the right reverend Prelate has said so much of huge value — an absolute tour de force on behalf of ultra-local radio. Of course from the remarks made in the previous amendment, I not only put my name to this amendment, but fully endorse what he said. It is that kind of certainty which is crucial, and this is a very elegant way of keeping it in the Bill. I hope consideration will be given to that, because — and this is not intended as a pun — a signal is needed in this area. We need a very strong signal — not just a digital or political signal — to FM radio, to ultra-local radio, that they have a future which is secure. That is exactly what the right reverend Prelate, whom nobody could accuse of being a luddite, has advocated.

Baroness Howe of Idlicote: My Lords, the right reverend Prelate has put it beautifully: “multi-platform ecology”. I like that and it sets the pattern for the future rather well. Clearly, this amendment hits on the crucial area of what will happen in the mean time and what is to be done concerning FM. We need some reassurance on this point; I think the Minister said that it would be around indefinitely. At the moment, we know that Ofcom grants only short licences. There have been quite a number of complaints from the radio stations that not to have the certainty granted to them by, say, a 10-year licence means that their likelihood of failure is considerable. That side of things would be helped if the Minister could confirm that FM will definitely be there, and that licences can be given as people gradually go over to digital and more space on FM becomes available. We know that there are minimal alternative uses for the FM spectrum besides transmitting radio. It is not therefore likely that the Treasury will want to make vast sums out of it, as it clearly did when it realised its potential. It has already had its fair share from that — or unfair share, depending on how you look at it. Please can we therefore have two assurances from the Minister? We should all try to move as fast as possible and with all encouragement towards the digital switchover, because we can see the disadvantages in having that laggard time that many seem to envisage. Indeed, one person giving us evidence today said that, concerning radio, there was really no possibility of a digital switchover; he was as dispirited as anyone could have been about the process. Any form of encouragement that the Minister can give would be welcome, certainly on the future use of FM and on longer licences. Those two things were very much endorsed by the people who gave evidence this morning to the Select Committee on Communications.

Lord De Mauley: My Lords, it is late and I shall be brief, but when we finally switch over to digital transmission it is important to be sure that the Government stay true to their promise that the FM spectrum will remain available for use by local and community radio stations. The Digital Britain report said that that was the Government’s plan, but it would give a great deal more reassurance if such a promise was contained in the legislation.

Lord Young of Norwood Green: I thank the noble Lord, Lord de Mauley, for his brevity. It is not as if I am not paying attention, or giving this less than its due, but we have already travelled over some of this terrain. However, I shall endeavour to reiterate the assurances. For small, local commercial and community stations, both the coverage area of a digital multiplex and the cost of its carriage are too great at present. That is one reason why we believe that those stations are best served by continuing to broadcast on FM. We have also committed to retaining FM for radio after the digital radio switchover. Of course, the Government will not stop any station that wants to and can move to digital, but we will reserve capacity on FM for those which have no obvious route there. I want to address a couple of the concerns that the right reverend Prelate expressed. How will we support those stations which remain on FM? In order to ensure that stations on FM can operate and compete with services on digital after switchover, the Government have already said that we are committed to establishing a combined electronic programme guide for radio. That will allow listeners to access stations via the station name, irrespective of the platform carrying the service. Listeners will therefore move seamlessly between bands, selecting stations simply by name; that is currently not the case when listening to FM and AM stations on an analogue radio receiver. We are working with the industry on that issue and encouraging its development.

Lord Clement-Jones: We have been given that assurance on a number of occasions. The Minister in the Commons, who recently announced his resignation, sadly, has given that assurance about the electronic programme, but no date was put on it. It is simply that they are working on it. This is a crucial aspect in retaining people’s ability to tune in to FM.

Lord Young of Norwood Green: I will see whether I can find any further information. This is a genuine commitment. It is all part of the backdrop against which this debate is taking place. We have set 2015 as a target, but there is not a headlong rush to it. We are trying to ensure a number of things, and this is one of them. I can give a progress report on where we are: it is a clear commitment. The right reverend Prelate asked about making FM continue to be attractive to advertisers and listeners. The key to the switchover of radio will be establishing three distinct tiers of radio — local, regional and national — which will provide unique content and are sustainable in their markets. The services that will populate FM will have a distinct role in providing very local material and reflecting the communities they cover. Due to the very local nature of their content and the refocusing of the large regional stations, these services will benefit from less competition for local advertising funding. I hope that is of some help. The noble Baroness, Lady Howe, asked whether Ofcom will offer analogue licences for longer than five years. The duration of analogue licences is a matter for Ofcom. However, it has suggested that, subject to the outcome of the Bill, it will consult on this issue. We support this process as there is clearly a strong argument for allowing analogue licences over a longer licence period. I, too, rather like the elegant phrase “multi-platform ecology”. I wish I had thought of it myself. We have not included in the legislation a commitment to retain FM because the Bill is not intended to set out all the details of the digital radio switchover but to enable a switchover to take place how and when that is appropriate. We agree with the right reverend Prelate’s phrase “a multi-platform ecology” — imitation will soon be the sincerest form of flattery on this one. To do this, Clause 30 provides for changes in the licensing terms of those services for which it will no longer be appropriate to continue on analogue once the switchover date is nominated. For those licences where analogue broadcasting is the most appropriate or only means of broadcasting, these powers need not apply and their terms will be unaffected, including the right to broadcast on an analogue frequency. The continuation of FM is therefore already provided for in this legislation and should be read alongside the commitments in Digital Britain. In the interests of time, I shall not say any more. I have tried to give as many assurances as I can. We share noble Lords’ concerns. We want this to be successful. We should take heart from how successfully we have handled the switchover to digital TV. That has been a success story. Lots of concerns were expressed at the beginning, and we had to work to ensure that people who had fears about handling the new technology were assisted. We got it right. I am not saying that that should be a blanket assurance for everything, but we should not forget how well we handled that. It gives us a good background of experience upon which we can build. I thank the right reverend Prelate for this part of the debate. I trust that the assurances that I have given will enable him to withdraw the amendment.

The Lord Bishop of Manchester: I thank the Minister for his response to this debate. I am also grateful to the noble Lords, Lord Clement-Jones and Lord De Mauley, and the noble Baroness, Lady Howe, who made very helpful comments. I welcome the Minister’s assurances about the continued provision for local stations to use the FM band. He said that we had been over this ground several times, but we have done so partly because of the seriousness of the issue and partly, as the noble Lord, Lord Clement-Jones, said later in the debate, because of the need to pin the Government down to get the precise assurance that people need. I am sure that those who run and who listen to these media services will feel encouraged by the general direction in which all this is going. Again, the noble Lord, Lord Clement-Jones, was absolutely right to say — it may have been a parlance, but it is a very good way of saying it — that these people really do need a clear signal from the Government that is very much along the lines of what the Minister has said. Having said that, I suspect that this needs to be repeated and to be made even clearer. As those of us who have the privilege of sitting on the House of Lords Select Committee on Communications know, there is a huge difference between the switchover to digital television — this has indeed gone very smoothly, although it is not without its teething problems — and the digitalisation of radio. It has been made very clear to us in the evidence that we have received that the whole business of the digitalisation of radio is much more complex. While the Government and all the digital facilitators need to be congratulated on what they have done in the switchover to digital television, let us not think that because that went so easily it will be the same for radio. There are some very different and deeper issues that we must look at. That said, I utterly agree with the Minister and all noble Lords who have contributed to the debate that we want to keep up the momentum. We really do want to go along with what the Digital Britain report has said and get ourselves going in the technological direction in which we are set. Unnecessary delays are certainly not welcome. Finally — I think the Minister alluded to this in an earlier debate — there is the issue of manufacturers moving towards products that use a combined station guide, rather as Freeview and satellite television do for television, so that people can choose stations by name, whatever the band they are using. This kind of mixed economy of stations, both analogue and digital, will be the simplest way of getting through the many complexities that are on our path. I am most grateful to the Minister, and I beg leave to withdraw the amendment.

Amendment 239A withdrawn.

[For the purpose of transparency, I was one of the parties invited to offer evidence before the House of Lords Select Committee on Communications yesterday morning.]

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