[cma-l] Ed Richards warns against setting 'meaningless' radio switchoff date

[CMA-L]

Ed Richards, the chief executive of the media regulator Ofcom, has
warned against announcing a "meaningless" analogue radio switchoff
date before the industry is ready for it.

With commercial radio uniting to call on the government to set a date
for digital switchover, Richards counselled caution, saying any change
had to be made in the best interest of the audience.

"You need to address the underlying economics first. I could give you
a date now but it is meaningless without a credible plan to get
there," Richards told the Radio 3.0 conference in central London
today.

"When people say we must have a date, it is another way of saying we
need a credible plan that gives us a date. It is better to get that
right and have a sense of determination and urgency to get that right
rather than pluck a meaningless date out of the air," he added.

"There is no point in doing something that the audience would regard
as a disaster. It has to be seen as a good thing. That is the acid
test."

Richard said the commercial sector had to be able to make digital
audio broadcasting – DAB – radio pay before there could be serious
talk of an analogue switchoff.

Ofcom was working with the industry to replan the DAB transmission
areas, he said, with the aim of greater flexibility and cost savings.

"The benefits of DAB have been weighed down by the costs of dual
transmission, which imposed additional costs at a time when the
economics were so challenging," said Richards.

"The idea of analogue switchoff has been given a great deal of
prominence and we very much welcome that debate. But in our view, as a
crucial first step, DAB services must become a financially stable
proposition in and of themselves. There are practical steps we can
take to help achieve this."

The review of DAB transmission areas will see some areas merged and
others extended to areas not currently covered.

Ofcom was also looking at relaxing the regulations around radio
sponsorship and commercial references, Richards said, with a
consultation on the change in the next few weeks.

"We know the advertising model is changing, and spot advertising is at
the limits of what it can credibly do. We think there is scope for the
relaxation of rules while remaining firmly in line with what listeners
want and expect to hear."

The communications minister Lord Carter's interim Digital Britain
report, published in January, said the process of "digital migration"
would not begin until digital radio accounted for more than 50% of all
listening. The figure was 20.1% in the first three months of this
year.

Carter's interim report also said the coverage of DAB services must at
least match that provided by the analogue FM signal today.

Asked today whether it would be helpful if Carter's final Digital
Britain report, expected next month, included a radio switchoff date,
Richards said: "It depends what the date was. It wouldn't be helpful
if the date was next year.

"It's an exciting prospect but we have got to believe that it is
credible and deliverable. Senior people in the industry need to sit
round, look at the steps [that are required] and say we will deliver
it."

As was indicated by the regulator's responses to Digital Britain,
Richards said the time had come to dismantle the current system of
regulation of local commercial radio.

"Radio remains the most heavily regulated [media] and yet is smallest
in terms of turnover. "Some of that is historic … But in the digital
age it may appear to be more back-handed than it was realised at the
time," he added.

"Cyclical pressures in the whole economy have bitten very hard in
radio, and when you bring those two things together – the structural
and the cyclical – it is time for some crucial decisions to be made.

"We are acutely aware of the importance of keeping local radio
commercially viable, but at the same time we want to ensure it remains
appropriately local."

Richards said the co-location of small stations could help 60% of
commercial radio services in the UK. On average, he said, it would
save a pair of stations serving a population of fewer than 300,000
people an average of £135,000 a year.

"That kind of saving could turn a loss-making station into break even
or possibly profit-making," Richards added.

He said that the new breed of small-scale community radio stations had
proved hugely popular and that the demand for licences was
"insatiable" and easily outstripped the analogue spectrum available.

From: http://www.guardian.co.uk/media/2009/may/21/ed-richards-ofcom-analogue-radio-switchoff

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