Saturday, 30 January 2010

SWEDEN: transmission company proposes DAB radio re-launch in 2010/11

DAB radio in Sweden could be re-launched to the public in 2010 or 2011, argues radio transmission company Teracom, interviewed in Radio World. Although Swedish state radio has been broadcasting on the DAB platform since 1995, the signal still only reaches 35% of the population. No DAB licences for commercial radio have yet been issued. In 2005, the Swedish government halted any further public investment in DAB radio due to poor consumer response.

Despite these setbacks, Teracom is attempting to stimulate Swedish interest in an upgraded DAB+ transmission system. It started DAB+ trial broadcasts in May 2009 and is conducting market research with the 500 people to whom it has supplied DAB+ receivers. The trial stations on DAB+ comprise four from state radio, eight from commercial radio and three community broadcasters.

Teracom pilot project manager Per Werner said one of the aims of the pilot is “to demonstrate to decision makers that the Swedish radio industry is ready for digital radio and that there is demand for new regulations allowing the industry to enter the digital era.” He explained: “If a decision is made to build a DAB+ network on a larger scale, a natural consequence would be to migrate the current DAB network to a DAB+ network. This is a decision for Sveriges [state] Radio, which is currently using the DAB network in a limited coverage area.”

Werner advised: “There is consensus in the industry that a wide range of programmes from public service and commercial radio, as well as community radio, will be necessary to provide a compelling offer to listeners.”

Thursday, 28 January 2010

Government: agreement to finance DAB radio upgrade “not expected until late 2010”

Recent government correspondence (see below) has confirmed that:
• DAB upgrade is “unlikely to be an easy task”
• DAB upgrade is unlikely “to be resolved quickly”
• DAB upgrade requires agreement about the current levels of FM coverage
• DAB upgrade requires agreement of a plan for building out DAB
• DAB upgrade still requires agreement on the level of investment required
• the government “hopes to have a comprehensive plan by the end of 2010”
• the DAB upgrade funding issue still has to be agreed between the BBC and the commercial radio sector, which is not expected until late 2010.

House of Lords
Delegated Powers & Regulatory Reform Committee
Second Report of Session 2009-10 [excerpt]
re: Digital Economy Bill
17 December 2009

Clause 36
20. Section 58 of the Broadcasting Act 1996 makes provision for the duration and renewal of national and local radio multiplex licences, and in particular specifies the grounds on which an application may be refused. Section 58 is in Part 2 of the 1996 Act.
21. Clause 36 inserts a new section 58A into the 1996 Act enabling the Secretary of State by regulations subject to affirmative procedure to “amend section 58 and make further provision about the renewal of radio multiplex licences” and for that purpose to amend other provisions of Part 2 of the 1996 Act. There is a “sunset” provision preventing the power being exercised after 31 December 2015.
22. It is impossible to tell from the Bill whether the policy is that the licences should or should not be renewable at all, let alone for what period or on what grounds. Indeed, paragraph 56 of the memorandum candidly admits that the relevant policy decision has yet to be made. We draw attention to the skeletal nature of the power in clause 36, to enable the House to examine it further and determine whether it is justifiable in this context.

Attached is the Memorandum by the Department for Culture, Media and Sport and the Department for Business, Innovation and Skills which explained:

Clause 36: Renewal of radio multiplex licences: Amendment of Broadcasting Act 1996
Powers conferred on: Secretary of State
Power exercised by: Regulations
Parliamentary procedure: Affirmative resolution

Clause 36 adds a new section 58A into the Broadcasting Act 1996. That provision contains a power to amend Part 2 of the Broadcasting Act 1996 (and in particular section 58) by regulations for the purpose of making further provision about the renewal of radio multiplex licences. In particular, regulations made under this power may make provision about the circumstances in which OFCOM may renew a licence, the period of such renewal, the information that OFCOM may require from an applicant, the requirements that an applicant must meet, the grounds for refusal of an application, payments to be made and further conditions that may be included in a renewed licence.
The reason for providing for a power to amend Part 2 of the Broadcasting Act 1996 by order in this way, rather than making amendments in the Bill, is that the decisions about whether or not to extend radio multiplex licences are dependent on an agreed industry wide plan for rolling-out DAB to match FM coverage. This planning process can only begin when (a) OFCOM have the power to allow multiplexes to merge, which requires the new powers to change the frequencies allocated to multiplexes set out elsewhere in the Digital Economy Bill, and (b) when funding issues between the BBC and the commercial sector are agreed; which is not expected until late next year. The power conferred on the Secretary of State will be subject to a sunset provision, so that it cannot be exercised after 31 December 2015.
Given that the power provides for amendment of primary legislation relating to the regime for renewals of licences, we consider it appropriate that any order made under this power should be subject to the affirmative procedure.

Letter from the Rt Hon Lord Mandelson, Secretary of State, Department for Business, Innovation and Skills to the Chairman of the Delegated Powers & Regulatory Reform Committee [excerpts]
January 2010

1. I am writing in response to the Committee's Second Report of Session 2009-10 published on 17 December which addresses the Digital Economy Bill…….

Independent radio services
Report paragraph 22: clause 36: Renewal of radio multiplex licences

22. The Committee considers that it is impossible from the Bill to determine whether the policy is for licences to be renewable and, if so, for what period and on what grounds. The Committee draws attention to the "skeletal nature of the power in clause 36, to enable the House to examine it further and determine whether it is justifiable in this context".
23. The Department notes that the Committee does not recommend removal or amendment of this provision. The Government intends to further explain the rationale for the clause during the Committee stage of the Bill.
24. It is the Government's aim to work with broadcasters and multiplex operators to agree how to build out the Digital Audio Broadcasting (DAB) infrastructure to meet FM coverage levels, one of the criterium that needs to be met in setting a date for digital switchover for radio. This is unlikely to be an easy task, or indeed to be resolved quickly. Among other things, it will require agreement about the current levels of FM coverage, the plan for building out DAB and the level of investment required. The Government hopes to have a comprehensive plan by the end of 2010.
25. The Government believes that a key component of this planning will be the ability to alter the terms of multiplex licence renewals. The existing section 58 of the Broadcasting Act 1996 allows OFCOM to renew radio multiplex licences granted prior to 30 September 2006 for periods of 12 or 8 years (depending on when the licence was granted). However, the Government recognises the need to reduce, as much as possible, the impact of infrastructure build-out on digital stations.
26. One way this can be achieved is to allow multiplex operators to spread the cost of any new investment over a longer licence period. This is why the Government has proposed new powers in section 58A to amend the provisions about the renewal of multiplex licences. The reason that the power is not more specific is because it will not be clear exactly how it will be most appropriately applied until the plan for the build-out of DAB is developed.
27. Exercise of the power will, in any event, be subject to parliamentary scrutiny due to the fact that any regulations will require resolutions of both Houses before being made.

Wednesday, 27 January 2010

FRANCE: “2010 will be the last chance” to launch digital radio

2010 will be the last chance for digital terrestrial radio” to launch in France, said Alain Mear, vice chairman of the CSA [media regulator] digital radio working group. “If digital radio does not start in 2010, there will be no digital radio.” He was speaking at a roundtable meeting held 15 January at the Senate to discuss the future of radio, according to RadioActu. Mear argued that the government needed to set a deadline for the ending of radio broadcasting on FM and AM. “This is the moment of truth”, he said.

However, the view of some radio groups represented at the meeting was that radio in future would be delivered to listeners via a mix of platforms. Concern was also expressed about the financial cost of launching a new digital broadcast platform. Michel Cacouault, representing the commercial radio trade body Bureau de la Radio, predicted that there could be “no development without an economic assessment”. He stressed that the sector’s declining advertising revenues in 2009, resulting from the global economic crisis, had required “all the big groups to face re-organisation and downsizing.”

Arnaud Decker, director of corporate relations at media group Lagardere Active, said that “the authorities must ask themselves how the competitiveness of the national music radio networks can be maintained” when the launch of digital radio would increase broadcasters’ costs.

Jacques Donat-Bouillud, director of radio at transmission provider TDF, said that the cost of providing digital terrestrial radio to a population of 40m would be around 500m Euros per annum. For a single station requiring national coverage in France, he said that digital transmission would cost 3m Euros per annum, compared to 6m Euros per annum for FM transmission.

Pierre Bellanger, CEO of commercial station Skyrock, pointed out that “60% of mobile handsets are internet enabled” and cautioned that “there is no single correct answer to the question about the future of radio. The solution is a hybrid and, ultimately, the listener will be the winner.”

Bruno Patino, director of state radio station France Culture, agreed: “[State] Radio France must participate in the digitalisation of broadcasting. Digital radio delivered by IP will be there, but that will not kill the broadcast platform.”

Tuesday, 26 January 2010

Government admits: no assessment of impact on small FM commercial radio stations of Digital Economy Bill

House of Commons
21 January 2010
Written Answers to Questions

Digital Broadcasting: Radio

Mr. Alistair Carmichael (Orkney and Shetland): To ask the Secretary of State for Culture, Media and Sport what assessment he has made of the likely effects of digital switchover under the provisions of the Digital Economy Bill on the ability of local commercial radio stations without a digital path to continue to broadcast on the analogue spectrum.

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Siôn Simon): No specific assessment has been made of the impact of the radio provisions set out in the draft Digital Economy Bill on local commercial stations remaining on FM after the digital radio switchover. However, these provisions, and the proposals in the Digital Britain White Paper, were made following 18 months of consultation with the radio industry, which included representatives of small local commercial stations.

I am continuing this dialogue with the industry with the specific purpose of ensuring that local radio can continue to thrive on FM after the digital radio switchover.

Digital Broadcasting: Scotland

Mr. Carmichael: To ask the Secretary of State for Culture, Media and Sport what percentage of Scottish households are able to receive digital radio services; what plans his Department has to increase coverage for digital radio in Scotland before 2015; what the cost of implementing those plans will be; and who will pay for the implementation.

Mr. Simon: The Spectrum Planning Group, which formed part of the Digital Radio Working Group, reported in November 2008 that 77.8 per cent. of the population in Scotland had access to indoor Digital Audio Broadcasting (DAB).

Coverage of digital radio broadcasting in the UK continues to increase and both the commercial and the BBC's national multiplexes now reach about 90 per cent. of the UK population. The Digital Radio Upgrade programme will require new investment in building and improving DAB coverage and reception. To this end we will be working with the BBC and commercial operators to ensure coverage of DAB is comparable to FM by the end of 2014.

The Digital Britain White Paper was clear that the investment need to increase coverage will need to come from both commercial operators and the BBC.

Mr. Carmichael: To ask the Secretary of State for Culture, Media and Sport what percentage of households in Scotland receive (a) digital commercial radio and (b) BBC digital radio services.

Mr. Simon: The Spectrum Planning Group, which formed part of the Digital Radio Working Group, reported in November 2008 that 76.2 per cent. of the population in Scotland had access to digital commercial radio services, while 77.8 per cent. of the population in Scotland has access to BBC digital radio services. Figures are based on indoor coverage.

Monday, 25 January 2010

GERMANY: “FM is and will continue to be the most important means of transmission for radio,” say commercial broadcasters

Commercial radio broadcasters in Germany have published a policy paper emphasising that FM will continue to be the main broadcast platform for radio. The VPRT, a trade association of 160 commercial broadcasters (70 of whom are active in radio), this week responded to the draft Work Programme for 2010 set out by the Radio Spectrum Group [RSPG] of the European Commission. One of its proposed work streams had been “to discuss the pros and cons of indicating a target date for analogue radio broadcasting (FM) switch-off."

The formal response from VPRT sets out powerful arguments why current FM spectrum (referred to as ‘Band II’) will continue to be radio’s most important platform for broadcasting:

The future development in the different frequency bands (especially Band II) is of utmost importance to our radio service members. Therefore, we are seriously concerned about the fact that RSPG is considering a target date for analogue radio broadcasting (FM) switch-off.

Nevertheless, we see the need to think about future developments and possible usages of Band II which comply with the provisions of the GE84 [Geneva radio conference of 1984] agreement and ensure FM services which are able to operate free of any interference. At the same time, we would like to stress the necessity of adapting and developing those GE84 provisions to ensure the continuity of Frequency Modulation (FM) and the future usages in Band II. However, this needs to be achieved without further co-ordination at international level.

1. Band II with FM is and will continue to be the most important means of transmission for radio
Band II with FM is the most important means of transmission for VPRT’s radio service members. Also, in the foreseeable future, Band II with FM will remain the basis of commercial activities for private radio stations. This is grounded by two reasons: firstly, the heavy usage by listeners and, secondly, the very high market penetration of FM receivers. Currently, more and more new Band II FM receivers are establishing in the market. As a consequence, the receiver basis is modernised constantly. Modern communication devices, such as mobile phones, smart phones and media players, integrate Band II FM receivers and ensure an even wider availability of FM. Switching off FM transmission is therefore neither realistic, nor can it be crowned with success.

2. FM in Band II is of utmost importance in the case of catastrophe
Due to the extremely high penetration of FM devices in Europe and its heavy usage, Band II is the only reliable way to inform the public in the case of catastrophe or need of contacting citizens in an emergency. This was recently proven when a blizzard hit Germany at the beginning of January. This is also valid in case of a regional power cut, as many devices are powered by batteries. For the time being, no digital receiver (DAB, etc.) has been developed for the operation with battery.

3. Band II is a small but efficiently used frequency range
The so-called Band II is the frequency range between 87.5 and 108 MHz and only represents 20.5 MHz. Nearly every single frequency is used in this bandwidth. Together with the broad receiver penetration and very high usage by the listeners, this small bandwidth is very efficiently used. In the last few years, receivers have been significantly developed which today results in an enormous improvement of their reception quality. Millions of listeners are convinced by the characteristics of FM. Even under very difficult circumstances for receiving a signal, a very good reception is possible. On the other hand, other (digital) systems are disconnected in a very early stage, which is rather disadvantageous. The usage of Band II is still “state of the art”.

4. No migration or partial migration of the services in other frequency spectrum
VPRT rejects any proposals which include the shifting of the current usage from Band II to other frequencies. This would bring the intensive and effective use of Band II to an end. Due to the lack of digital receivers, as well as of the absence of consumer demand for change and migration, a restart of a digital system would mean inefficiency and un-sustainability for a very long period of time. In other bands, there is enough space to introduce new systems. Band III (174 to 230 MHz, channels 5 to 12) and therewith corresponds to 56 MHz – is available.

5. Consideration of future developments of FM transmission after GE84
Since the Geneva conference of 1984 (GE84), different parameters of the FM usage in Band II have changed. In the meanwhile, different and changed sources of signals are available (music), the signal processing was adapted and a compression of the signals was introduced. The processing of the FM signals in the receivers is completely digital. 25 years after G84, the provision from the Geneva plan should be adapted and developed according to recent technical developments.

6. There is a chance for new standards with unlimited parallel FM operation
In the medium term, there are different options to develop the use of Band II. The use of FM has to remain, due to the heavy use described in point 1.4. An unlimited parallel FM operation offers the opportunity of financing additional engagements from the remaining FM transmission. Further developments with new standards based, on additional unlimited parallel operation of FM, is a chance for economical efficiency. Therefore, it is necessary to adapt the ETSI spectrum mask ITU-BS.412-9, as well as other ITU-R recommendations, by keeping the guidelines for aeronautical services (VOR and ILS). In this way, the “envelope concept” which was already used in the GE06 plan could be kept. Therewith, new standards under an adapted ETSI spectrum mask would be possible without interfering with the existing FM transmission and conditions. In this case, a new planning conference would not be necessary.

We support a conversion to digital assignments if the FM transmission can be maintained without any limitation. In this case, a switch from single FM transmission into a digital transmission would be possible, without discriminating other FM transmissions.

We do not see a future for technologies which are linked to a switch-off of the FM transmission.

7. Interference with FM through new standards have to be avoided
As already mentioned in point 6, it must be avoided that future technology developments cause any interference to the existing FM transmissions. A reduction of the current coverage caused by future developments is not acceptable for VPRT members. Some aspects of the technical developments are promising but, due to a lack of information, a full evaluation is not possible.

8. No international re-planning of Band II or of parts of it
Due to the very intensive and effective use of Band II, we do not see any need for a long and very costly international re-planning. The GE84 plan should be supported in its principles and adapted as mentioned in point 6. Even a re-planning of certain parts of the Band II would not lead to any benefit, as the complete Band II is used and needed in the future.

9. Re-adjustment of Band II at national level is necessary
However, we always have been calling for a re-adjustment of Band II at national level in order to balance the relation between public broadcasters and private broadcasters. At the moment, we face an imbalance with regard to the amount of frequencies, as well as the frequency capacity, held by public broadcasters on the one hand and by private broadcasters on the other hand. We therefore ask for a readjustment which takes the actual demands into account. The introduction of new standards would carry forward the current imbalance.

10. Further research and economical comparison are necessary
Next to the research and comparison, with respect to the technical characteristics and parameters of the available standards, further research is needed to complete a substantial evaluation. For the time being, an evaluation of the economical and financial factors is still missing. We therefore ask to also take those aspects into consideration.

Summary of VPRT comments
• Band II with FM is and will continue to be the most important means of transmission for radio
• FM in Band II is of utmost importance in the case of catastrophe
• Band II is a small but efficiently used frequency range
• No migration or partial migration of the services in other frequency spectrum
• Consideration of future developments of FM transmission after GE84
• There is a chance for new standards with unlimited parallel FM operation
• Interference with FM through new standards have to be avoided
• No international re-planning of Band II or of parts of it
• Re-adjustment of Band II at national level is necessary
• Further research and economical comparison are necessary

Berlin, January 2010

[this is VPRT’s own English translation]

Saturday, 23 January 2010

CANADA: DAB radio “is no longer a replacement for analogue AM and FM services”

The Canadian government has published a consultation that proposes to re-allocate radio spectrum previously used for DAB radio to fixed and mobile wireless devices. The consultation document narrates the story of the failure of DAB radio in Canada.

In 1996, the [Industry Canada] Department published an allotment plan to accommodate all existing and some new FM and AM radio stations by providing each with a DAB assignment. The dedication of the sub-band 1452-1492 MHz for DAB was justified on the expectation that DAB would replace analogue FM and AM stations, and that the associated spectrum would be released for new wireless services. Canada adopted the Eureka 147 standard for DAB, which was widely accepted by European countries and others. In response to the interest of broadcasters to offer some non-broadcasting services using DAB broadcasting facilities, the Canadian Radio-television Television Commission (CRTC, 1996) and the Department (1997) made provisions to permit a limited amount of non-programming services.

Starting in the late 1990s, the CRTC licensed 76 DAB stations in Toronto, Windsor, Montréal, Vancouver, Victoria and Ottawa. In addition, the CRTC approved a stand-alone ethnic commercial radio station. After a promising start, the roll-out of DAB has virtually come to a stop and some stations have ceased operation. The marginal development of DAB services in Canada can be attributed to several factors.
• First, consumers have only had limited access to high-priced DAB receivers.
• Secondly, the United States, with its influential market, is implementing HD digital technologies on the shoulders of the analogue FM and AM channels.
• Most European countries have implemented DAB services in the VHF band III (174-230 MHz) instead of the anticipated L-band. Only a few countries have pursued DAB in the L-band. The success in such countries has been quite limited.
• Furthermore, Canada used a different channelling system that required the few receivers imported to Canada to be customized for this small market.

An ongoing concern of Canadian broadcasters has been the inability to broadcast a significant level of new programming on DAB stations in order to attract subscribers during the transition phase. Moreover, as digital radio was implemented in only a few cities, without contiguous coverage over major transport corridors, car manufacturers are not installing DAB receivers in new vehicles for sale in Canada. Since then, with the availability of two subscription digital radio satellite services, the Canadian automobile manufacturers have proceeded to install satellite digital radio receivers in new vehicles.

In 2006, the CRTC launched a public review of its commercial radio policy, which included a review of the L-band DAB transition policy. It culminated in a new licensing model being adopted for digital radio broadcasting (Broadcasting Public Notice CRTC 2006-160). Some of the findings related to digital broadcasting and to the decision aspects with respect to this spectrum review are as follows:
• the offering of new and innovative program content may raise consumer interest for DAB services, but technical quality alone will not drive demand;
• the FM and AM frequency bands will be needed in the future for radio broadcasting, and HD radio digital broadcasting could further enhance the importance of this spectrum for over-the-air radio broadcasting;
• the transition model of replacing analogue FM and AM stations with L-band DAB is no longer a tenable objective.

In summary, several impediments will continue to affect the implementation of DAB services under the new licensing model, such as:
• the lack of affordable L-band DAB receivers;
• the lack of factory-installed DAB receivers in new vehicles;
• the U.S. market influence of digital radio services using HD radio technology on existing analogue FM and AM channels; and
• the European market influence of having adopted DAB service in the VHF Band III (174-230 MHz) and their review of the L-band spectrum for a variety of technologies and service applications.

The Canadian government’s policy that DAB radio “is no longer a replacement for analogue AM and FM services” follows on from US policy in debate that FM radio will be the universal radio platform to be included in all mobile phone handsets. There is an important lesson for the UK market in the Canadian conclusion that “the offering of new and innovative program content may raise consumer interest for DAB services, but technical quality alone will not drive demand.

DAB radio’s death in Canada is demonstrated by World DMB’s country page for Canada not having been updated since September 2008, while the last news entry on Canada’s own digital radio website was posted in 2007. The world map has lost the largest country to have implemented DAB and the only country in the Americas.

Tuesday, 19 January 2010

Labour MP says government's analogue radio switch-off "is absolutely potty”

House of Commons
18 January 2010
Oral Answers to Questions

Rob Marris (Wolverhampton, South-West) (Labour): My understanding is that the Government currently propose that analogue radio be switched off in 2013. If that is the case, it is absolutely potty. Will the Government reconsider?

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Siôn Simon): My hon. Friend is, for once, slightly wrong on the detail. The policy is that we move to digital in 2015, but not that analogue radio be switched off. Most big radio stations will move to digital, but smaller commercial and community radio stations will stay on FM and will be, as I have said, on the same dial as the big digital stations.

House of Commons
18 January 2010
Written Answers to Questions

Theresa Villiers (Chipping Barnet) (Conservative): To ask the Minister of State, Department for Transport with reference to the answer to the right hon. Member for East Yorkshire of 23 June 2009, Official Report, column 768W, on motorways, what assessment he has made of the effects on the level of motorway congestion of the DAB radio service Traffic Radio since its introduction.

The Parliamentary Under-Secretary, Department for Transport (Chris Mole, Ipswich) (Labour): Traffic Radio is one of a suite of Highways Agency information services designed to provide road users with access to the very latest traffic information.
Research has shown that awareness and usage of information services can influence levels of motorway congestion. It is not possible to directly correlate the impact of Traffic Radio to motorway congestion due to the complexity of assessing one information service in isolation from the others. In addition, information is only one of a series of measures that can contribute towards congestion reduction.
The Highways Agency is undertaking a piece of research to evaluate whether the anticipated benefits of Traffic Radio, as outlined in its original specification, have been realised. This work is due to be completed by April 2010 and will be supplemented by information from the agency's annual Measuring Improvements in Network Information Services survey.

Wednesday, 13 January 2010

Parliamentary debate on local radio: Minister reads from the government DAB script

“The Future Of Local Radio” [excerpts]
Private Members’ Debate
Westminster Hall, House of Commons
12 January 2010 @ 1330

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Siôn Simon): Local radio is, without question, important to the Government and to communities, playing an important role in binding together the social fabric. We take it very seriously.

Dan Rogerson (North Cornwall) (Liberal Democrat): On the point about the importance the Government place on local radio, it seems that local radio stations, and certainly those in my constituency, Pirate FM and Atlantic FM, do not necessarily feel that they have had the opportunity to get their points across at an early stage. That is why they are now contacting local Members to look at some of the issues when the Digital Economy Bill is debated on the Floor of the House. What sort of consultations are taking place with local radio stations?

Mr. Simon: The hon. Gentleman is quite right; there is undoubtedly some concern in the industry. There has been a bit of a campaign, led by UTV. I recently met, at RadioCentre, representatives of many local commercial local radio stations from across the country, and some of them will have been those he mentioned from his constituency. There was extensive consultation when the Bill was drafted, so we do take it seriously. During my remarks, I hope to allay some of the fears which may have emerged through misunderstanding.

Bob Spink (Castle Point) (Independent): There are genuine fears that the Bill will lead to a two-tier system, so would the Minister address a couple of those fears? Will Clause 34 genuinely lead to deregulation for smaller local radio? Will digital be affordable for smaller local radio, and how can we achieve that? Will smaller local radio get more access to higher-quality FM while it is still around?

Mr. Simon: I am pretty confident that I shall address all those points in my brief remarks. Let me make some progress before I take any more questions. Digital switchover provides new opportunities and increases functionality. It is an essential part of securing the long-term future. The total revenue of the commercial sector has fallen from £750 million in 2000 to £560 million now. At the same time, transmission costs have gone up, with stations now bearing the cost of carriage on FM, DAB, online and digital TV. A market facing such rising costs and falling revenue is unsustainable and puts the health of the entire sector under threat. Although the path to digital may not be easy, we are convinced that it is the only route for securing the long-term future of radio, and that is a view shared by the vast majority of the sector, notwithstanding some of the reservations raised by hon. Members. Therefore, rather than a catalyst for decline, the changes set out in the Digital Economy Bill are essential to secure the survival of local radio. For the first time, we will have three distinct tiers. First, there will be a tier of national services, both commercial and BBC, with a wide range of content. It will allow the commercial sector to compete more effectively with the BBC, employ high-profile presenters and attract high value national advertising and sponsorship. Secondly, a regional or large local tier, again comprising commercial and BBC services, will provide a wide range of programmes, including regional news, traffic and travel. The tier will increase the coverage size and potential revenue of many large local stations which, in turn, will increase the opportunity for linked advertising between regions so that regional commercial operators can benefit from quasi-national advertising. The hon. Member for Orkney and Shetland mentioned the issue of advertising being badly commissioned by the Scottish Government, which I understand. None the less, the benefits of linked advertising for regional radio can be very great if commissioned sensitively. Most important in the context of today’s debate, there will be a tier of local and community radio stations with the specific focus of informing and reflecting the communities they serve. They will be distinct from the national and regional tiers because of the very local nature of their content and they will benefit from less competition for local advertising funding.

Mr. Oliver Letwin (West Dorset) (Conservative): People in my constituency and elsewhere who depend on radios will not be able to get local radio if it is purely digitised.

Mr. Simon: Local radio will not be purely digitised. That tier will stay on FM for the foreseeable future, but it will not be an FM ghetto; it will be an accessible FM, as I shall explain.

Mr. Brian H. Donohoe (Central Ayrshire) (Labour): Given the time constraints, will the Minister agree to meet Members who are interested in the subject?

Mr. Simon: Yes, I am happy to meet Members who are interested. I have another meeting scheduled with local radio operators from all over the country, which will be under the same auspices as my recent meeting with them. (I am not sure whether I have enough time to continue. I do.) So, let me be clear: we see a digital future for all radio eventually. However, with more than 50 BBC services, nearly 350 commercial stations, 200 licensed community stations, the current infrastructure will not support a move to digital for everybody. For small commercial and community stations, the coverage area and the cost of carriage of a digital multiplex are too great. That is one reason why, for the time being, we believe that those stations are best served by continuing to broadcast on FM.

Malcolm Bruce (Gordon) (Liberal Democrat) rose —

Mr. Simon: I am nearly coming to my point, but I give way to the right hon. Gentleman.

Malcolm Bruce: Some of the small stations have already invested in being on digital. Are they not in danger of being kicked off to FM, having made that investment, and would that be a fair outcome?

Mr. Simon: No, small stations are not in such danger. Stations that are already on digital are not in danger of being kicked off digital, but they are suffering the extra cost of running on two platforms. That is one of the reasons why we need an orderly, managed and reasonably speedy transition to an affordable single platform for as many people as can afford to be on it. The idea of stations on more than one platform is not new, which moves us to a key point that has not been widely understood — it is really important. Listeners have for decades moved between FM and Medium Wave, and historically also to Long Wave. The current generation of DAB sets has tended to make that move a rather sharp distinction, which has led to the fear that FM will end up being a second-class ghetto tier. To avoid that, we are committed to ensuring the implementation of a combined station guide, which is similar to an electronic programme guide, that will allow listeners to access all sets will simply have a list of station names. The listener will not distinguish between FM and digital stations, but will simply select the station by name. We are already working with the industry on that system and encouraging its development and introduction as quickly as possible. That is a crucial difference that has not been widely promulgated or understood. It means that people can stay on FM and the new sets can service the same market. Only 5 per cent of the digital radio receivers currently on sale cannot receive FM. It is our intention that all digital receivers should be able to receive FM as well as complying with the World DMB profile, which will ensure that they can support other technologies to accommodate future changes. That crucial distinction has not been widely understood. When I explained it to people in the industry, it made a big difference. The hon. Member for Orkney and Shetland asked whether we could upgrade to DAB+ from the beginning. I understand why he says that, but we are not right at the beginning. There are 10 million DAB sets out there for which people have laid out large amounts of money. The BBC completed a study into the issue last year, and concluded that, on balance, it was not worth writing off that technology because of the impact on the 10 million people who had bought DAB sets. We have said that all new technology should be DAB+ and future compatible so that further change is future-proofed and DAB+ is not excluded. As for the switchover date of 2015, the hon. Gentleman asked whether it was the only way we would get things moving. The Government believe that 2015 is an achievable date. The actual date that switchover happens will depend on the criteria for listenership and coverage being satisfied. We think it can be done by 2015, and that it is important to set a challenging target. The issue of £20 sets was raised. There are already some £30 sets. We have five years to go until 2015, so we remain confident that we will have £20 sets by then.

Miss Anne Begg (Aberdeen, South) (Labour): I am interested to hear what my hon. Friend says about the 2015 date. Can I take it from what he said this morning that 2015 is an aspiration to encourage the industry to move towards digital — to put their house in order and get things ready? However, if the coverage is not there in places such as the constituencies of the hon. Member for Orkney and Shetland (Mr. Carmichael) and the right hon. Member for Gordon (Malcolm Bruce) where there are a lot of hills, will the Government look at the date again? That date is not already fixed.

Mr. Simon: As I said, we believe it is an achievable date. If more than 50 per cent of listeners are not on digital by then, and if coverage is not similar to FM — 98.5 per cent — it will not happen on that date. If for any other unforeseen reason, we are not, as a nation, in good shape to do it by then, we will not do it. We will not switch over at an inappropriate time, but we believe that it can and should be done in 2015. As time ticks on, let me say that a relatively small and cheap piece of hardware will be available to convert in-car sets to something that works in the future as well as the present.

[Sitting adjourned without Question put (Standing Order No. 10(11)).]

Monday, 11 January 2010

Criteria and a date for digital radio switchover: where'd they go?

When will the UK government’s proposed ‘digital radio switchover’ happen? For a long time, we had always been told that the pre-requisites were:
• market criteria that had to be reached before switchover could be announced;
• a fixed, single date for switchover to happen.

So both of these must be in the Digital Economy Bill somewhere, surely? Well, it seems that everything (except the Bill itself) points to 2015 as the switchover date. But as for the criteria?

The government’s press release of 20 November 2009 announcing the Digital Economy Bill stated:
• “Digital radio: update the regulatory framework to prepare for moves to digital switchover for radio by 2015”.

The government’s accompanying Factsheet of 20 November 2009 stated:
• “At the centre of our ambition is the delivery of a Digital Radio Upgrade programme by the end of 2015.”

The government’s accompanying Impact Assessments of 20 November 2009 referred to:
• “a switchover to digital radio by 2015”
• “a switchover to digital only radio by 2015”
• “a Digital Radio Upgrade programme, which should be completed by the end of 2015”.

However, the government’s Explanatory Notes to the Digital Economy Bill said:
• nothing about criteria that have to be met;
• nothing explicitly about a switchover date.

Published on 20 November 2009, the Digital Economy Bill itself contained nothing about:
• criteria that have to be met;
• an explicit date for digital radio switchover.

What? Is this not strange? Somewhere along the way, it seems as if the agreed criteria and the switchover date just vanished into thin air. So what happened? Let’s go back and follow the timeline of how we got to where we are now.

JUNE 2008
The Interim Report of the government’s Digital Radio Working Group recommended:
• “Government should agree a set of criteria and timetable for the migration to digital.
• These criteria should include an assessment of:
      * The percentage of listening to DAB enabled devices;
      * Current and planned coverage of DAB and FM; and
• In considering the case for migration we expect the Government will also want to consider the take-up of digital radio in cars, affordability, functionality, and an environmental impact plan.”

The Final Report of the Digital Radio Working Group recommended:
• “Three broad criteria that must be met in order to trigger the digital migration process:
     * That at least 50% of total radio listening is to digital platforms;
     * That national multiplex coverage will be comparable to FM coverage by time of digital migration;
     * That local multiplexes will cover at least 90% of the population and, where practical, all major roads ….”
• “Government should announce a date for digital migration, ideally two years after the criteria have been met”.

The Interim Report of the government’s Digital Britain recommended:
• “We will create a plan for digital migration of radio, which the Government intends to put in place once the following criteria have been met:
     * When 50% of radio listening is digital;
     * When national DAB coverage is comparable to FM coverage, and local DAB reaches 90% of population and all major roads.”

JUNE 2009
The Final Report of Digital Britain recommended:
• “The delivery of a Digital Radio Upgrade programme by 2015”
• “Included within the Digital Radio Upgrade timetable is our intention that the criteria should be met by the end of 2013”:
     * “When 50% of listening is to digital; and
     * When national DAB coverage is comparable to FM coverage, and local DAB reaches 90% of the population and all major roads”

This Report also included a critically important graph (see below) which, it said, “shows the projected digital share of listening under two scenarios: organic growth and with a concerted drive to digital”.

Shockingly, the historical data in this graph had been ‘doctored’ to make it look as if the faster growth path advocated by Digital Britain was easily achievable [confusingly, the key on this graph labels the lines round the wrong way]. When I queried the source of this false data, the government told me it had been supplied by another party, which I later found to be a report produced by the Digital Radio Development Bureau, but not made public.

Digital Britain’s graph sought to demonstrate that continuation of the current growth trend in digital listening would lead to the 50% criterion being achieved in early 2015, whereas the actual data (from RAJAR) in my graph shows the 50% criterion not being reached until the end of 2018 [the trend line here is automatically generated by Microsoft Excel from all available quarterly data].

Digital Britain proposed policies to accelerate DAB take-up which, it said, would ensure that the 50% criterion would be achieved by year-end 2013, a gain of a little over one year from its natural trend. However, in my graph that uses RAJAR data, the acceleration necessary is shown to be five years, not one year, which would prove an almost impossible task to achieve [I wrote about the false data in June 2009].

Between the publication of the Digital Britain final report in June 2009 and today, it has slowly dawned on some of radio’s stakeholders that the agreed criteria necessary for digital radio switchover stand zero chance of being achieved by 2013. Neither do they stand a chance of being achieved by 2014 or 2015, nor probably by 2016. It always was pie in the sky, wishful thinking, fiction rather than fact. The manipulation of key data in a significant government report only demonstrates the duplicity.

So, what to do about it now? Admit you were wrong? Admit your culpability? Best to simply pretend that the criteria and the proposed switchover date never really mattered. Botched data – ignore it. Unrealistic targets – lose them. Perhaps nobody will notice the whole, sorry deception.

In the here and now, Digital Radio UK (the new organisation responsible for implementing DAB) explains the current thinking:
• “The [Digital Economy] Bill does not set a definite date for digital radio switchover …”
• “The Government has stated that switchover will not happen until the majority of radio listening is to digital, and until anyone who can currently receive FM is able to receive digital radio” [but fails to address why these criteria are not included in the Bill].

In the here and now, RadioCentre (the commercial radio trade body) explains:
• “[Digital Economy Bill Clause 30] allows the Secretary of State to set a [digital switchover] date, but does not require one to be set, or indicate when the date might be”.
• “The objective that switchover should not occur until certain thresholds have been reached for listening … appears sensible on first reading. However, RadioCentre does not believe it is appropriate for the industry to be tied to any figures in primary legislation. This is a very inflexible mechanism against which to manage our industry going forwards”.

Figures. Numbers. Dates. Criteria. This kind of factual evidence or hard data might obstruct a future decision to force consumers to switch to DAB radio.

So to answer the original question – the criteria and the switchover date that had been agreed upon by stakeholders, over two years of deliberations, have now quietly been relegated to oblivion.

When would digital radio switchover have happened if the agreed criteria had been implemented in law? Probably never.

When will digital radio switchover happen now? Whenever those in power want it to.

Tuesday, 5 January 2010

Kiss FM: it's the same old songs

London dance music radio station Kiss FM has re-scheduled its specialist shows to slots after midnight, according to The Guardian, and has cut their duration from two hours to one hour. Almost nobody listens to radio on a weekday after midnight, RAJAR audience data show, so the policy change condemns these shows to a radio graveyard that is very close to extinction.

According to Kiss FM specialist DJ Logan Sama: “The shift of focus away from upfront specialist music to more playlisted hours is one which the management feel will enable the station to compete with the likes of Capital and Galaxy FM. All of the genre-specific late-night shows took the brunt of the hit.”

When Kiss FM was launched in 1990, its specialist music shows started at 7.30pm on weekdays, and the preceding half-hour magazine show ‘The Word’ created a watershed between the daytime mainstream playlist and the more radical evening shows. There was a specific commitment in the station’s licence to broadcast these shows so that Kiss FM would give airplay to music unheard anywhere else on the radio in London.

In the intervening years, through attrition, Kiss FM’s owner (EMAP then, Bauer now) has succeeded in ‘persuading’ the regulator to loosen these licence requirements for the station to broadcast specialist music shows. To its discredit, the regulator has seemed happy to go along with such proposals, permitting Kiss FM to be turned into a much more mainstream hit-orientated station than it was ever intended to be.

What the regulator and some radio owners seem to fail to grasp is that, in a crowded radio market such as London, one station can attract a significant (and loyal) audience by doing something deliberately different both from its competitors and from its own daytime mass-market output. This works both commercially and altruistically. In the case of Kiss FM, advertisers can reach a niche audience that daytime shows do not deliver (if I organise a reggae concert, the best place to advertise it is in a reggae radio show); citizens are offered a genuine extension to the ‘listener choice’ that the regulator loves to cite.

This is not just a theory – there is plenty of empirical evidence to demonstrate how it works. Look at Helen Mayhew’s evening ‘Dinner Jazz’ show on the original London Jazz FM, which was almost the only show on the station that delivered 100% jazz music, but also had higher ratings than any of the daytime playlisted output.

Kiss FM itself provides a good example of what can be achieved. In the graph above, the red line shows the current audience of Kiss FM London (RAJAR, Q3 2009) peaking at 147,000 adults at breakfast between 8 and 8.30am, then falling to a minimum of 1,000 adults by the early hours of the next morning. This is the normal pattern of listening for a mainstream music radio station in the UK.

The blue line shows the Kiss FM London audience a decade earlier in 1999 when specialist music shows still occupied the weekday evening hours. Note that, in the evening, during most of the hours from 7pm to midnight, the audience was bigger a decade ago than it is now. Has the subsequent replacement of specialist music shows with mainstream music in the evening improved Kiss FM’s audience at those times? Apparently not.

After the station launched in 1990, the daytime audience was lower than it is now, but the evening specialist music programmes generated huge audiences. Some of the Kiss FM evening shows attracted more listeners than any other London station in these evening timeslots, ranking them #1 in that daypart.

This was not an accident. Kiss FM’s original schedule was deliberately designed to attract significant audiences to each of a wide range of specialist music shows broadcast on weekday evenings. Listeners loved them – individual shows were promoted heavily on-air and in specialist music magazines. Advertisers loved them – the rates were cheaper than daytime and the spots regularly sold out.

Doing something different on-air can reap rewards, if you satisfy genuine listener demand and promote the hell out of it, so that people know the programmes are there. But, if you simply do the same in the evening that you are doing during daytime, your station is going to have much the same declining listening pattern as any other radio station.

If you compare Kiss FM’s current listening pattern to that of its competitors, you can see from the graph above that it delivers much the same weekday shape – a continuous decline from a peak at breakfast. The exception amongst the London commercial stations is Magic’s unusual peak between 10 and 11pm. Why? Because it schedules ‘The Mellow Ten At Ten’ each weekday evening from 10pm, a one-hour feature that breaks from its playlist.

Also noteworthy in the graph is the unusually high evening audiences achieved by Choice, with more listeners than the station attracts during the afternoon. Why? Because Choice schedules specialist music shows during weekday evenings (mixes, reggae, hip hop). Again, being different can pay off for both audiences and advertisers.

This concept – that individual radio stations often struggle to sound the same, even though ‘daring to be different’ pays dividends – has been understood since the earliest days of media theory. American economist Peter Steiner wrote:

“…. the existence of [different] program types and [different] audiences therefor is assumed by the broadcasting industry and forms the basis for [station] program decisions. In this case, it is the assumed size and distribution of listeners’ preferences that is decisive in determining the amount of [programme] duplication that will result. If, as is often suspected, broadcasters exaggerate the homogeneity of audiences and their preferences for certain program stereotypes, the tendencies towards [programme] duplication will be increased.”

Writing in 1951, Steiner already recognised that radio station owners will tend to duplicate each others’ formats and programme scheduling, rather than offering their audiences something different or unique. He wrote:

“The problem, of course, is that a series of competing firms, each striving to maximize its number of listeners, will fail to achieve either the industry or the social good. Here, then, competition is providing a less than desirable result.”

In the UK, our government created a broadcast regulator to intervene in the market to ensure that commercial radio station formats maximise the ‘social good’, as Steiner refers to it. The UK is in a very different situation from the US, where the regulator (FCC) does not interfere in the formats of radio stations. But the UK system will only work if the regulator understands the economic and social imperatives for market intervention and exercises those powers appropriately.

The increasing marginalisation over the years of Kiss FM’s specialist music programmes demonstrates that the regulator is oblivious to the economic and social imperatives to regulate. Instead, it is simply conspiring to deny both listeners and advertisers the programme diversity they should be entitled to. The fact is that ‘light touch’ radio regulation is not regulation at all, any more than driving a car with no hands on the steering wheel would be considered by a court to be ‘driving’.

A regulator that simply allows market forces, in Steiner’s words, to produce “a less than desirable result” is not regulating. The Independent was quick to blame Kiss FM’s owner:

“Once the king of pirate radio, the legendary station Kiss is being dragged into the mainstream by owners Bauer Media, which will today cut back a number of the Kiss specialist music shows and axe several presenters in order to reposition the network to take on Global Radio operations such as Galaxy. Shame.”

However, the blame should fall squarely on the regulator for allowing a station owner to pursue an objective that further restricts consumer and advertiser choice. There is no ‘free market’ for radio in London – the gap in the market created by Kiss FM’s marginalisation of specialist music genres and DJs will not be filled by another licensed radio station …… only by London pirate stations.

Pirate radio stations seem to be the only ones that implicitly understand Steiner’s competition theories perfectly, and they risk the consequences for putting them into action. Pirate radio’s popularity is no accident – it is a direct outcome of the failure of the regulator to regulate.