[cma-l] House of Commons debates, 28th February - Community Radio Licences

[CMA-L]

*Edward Vaizey (The Parliamentary Under-Secretary of State for Culture,
Media and Sport; Wantage, Conservative)*
+++

We have not yet announced a date for switchover or even made an
in-principle decision on when we might switch over to digital radio.
However, we do not want to lose the momentum towards digital radio that has
been built up by putting in place the infrastructure, encouraging people to
buy digital radios and encouraging people to convert their cars to digital
radio, which is becoming ever easier and cheaper to do. That will help a
station such as MKFM, which is broadcasting on digital radio, as my hon.
Friend pointed out. Milton Keynes tends to be ahead of the trend and its
rate of digital radio ownership is ahead of the national average, probably
beaten only by places such as London.

It is important to stress that digital radio remains an increasingly
important part of the radio mix. Another important element of the radio
mix, which we could perhaps say is at the other end of the spectrum,
is community
radio. The framework for community radio was set up in 2004 by the last
Government. In my view, it has been an astounding success. Community
radiois run by not-for-profit organisations that provide a social gain
to the
communities they serve. It provides original, distinctive
and—crucially—local output, and relies on a huge amount of effort and
support, with stations receiving an average of around 214 volunteering
hours every week. They are supported by the Community Media Association,
which does a fantastic job of representing the sector and providing
information and advice to stations and prospective start-ups. Community
radio has shown that it can deliver wider social objectives, connect
communities together, and give a real focus for local engagement. It does
not surprise me that in a community the size of Milton Keynes, there should
be a great deal of pressure to see the community radio station MKFM launch
as soon as possible. The value of the sector is not just in its listening
share or reach, but in the lives it touches and often changes for the
better.

The recent connect:transmit project is a good example of how community
radiocomes together to support skills and training for young people.
It was
funded by the Paul Hamlyn Foundation and co-ordinated by Radio Regen, a
charity supporting the community radio sector. It worked with four community
radio stations: Shmu FM in Aberdeen, BCB in Bradford, Future Radio in
Norwich, and Preston FM.

I hope that my hon. Friend and the rest of the House will agree that community
radio has grown and established itself as part of the
UK<http://en.wikipedia.org/wiki/UK>’s
diverse and vibrant radio ecology. As has been mentioned, a number of
community radio stations are reporting problems and struggling to remain
viable, with some stations reporting a decline in income and difficulties
in accessing funding. That is supported by Ofcom’s market analysis, which
shows that community radio stations have consistently operated on very
small margins. For example, in each of the last four years, the average
expenditure of the sector has been greater than the average income.

Ofcom’s communications market report of 2013 showed that the percentage
share of income generated by community radio stations from grants fell from
45% in 2008 to 29% in 2012. That figure is likely to fall still further,
although it is partly offset by a slight increase in the overall value of
on-air advertising and sponsorship revenue, which increased in 2012 from
26% to 29%. It is important to make such points because I want to bring the
attention of the House to the consultation that we launched a couple of
weeks ago on 13 February. It is a wide-ranging consultation on the funding
rules that apply to community radio, because we want to consider how we can
relax some of the rules and restrictions on how community radio is funded.
It is a consultation that the community radio community has long called
for. We think that restrictions are still needed to preserve the
distinctive characteristics of community radio and ensure that small
commercial radio stations are not adversely affected. The consultation will
close on 23 April, and will enable us to assess the extent to which rules
can be relaxed to give community radio more scope to raise funding, and to
help the sector’s long-term sustainability.

Although there are challenges to community radio, I am encouraged by high
levels of demand for community radio licences across many parts of the
country. I fully understand my hon. Friend’s desire for his constituency
radio station, MKFM, to establish itself as a local community
radiostation. The regulatory framework was set out in the Community
Radio Order 2004, and lists the powers under which Ofcom can license community
radio stations. That gets to the nub of what my hon. Friend wishes to
discuss.

Detailed implementation of licensing is the responsibility of Ofcom, and in
developing its approach to licensing and regulating the sector—including
the current licensing round, which is the subject of concern to my hon.
Friend and MKFM—Ofcom has consulted a range of stakeholders, including the
Community Media Association. Ofcom has decided to invite applications for
licences on a region-by-region basis, to co-ordinate the approach in a fair
and consistent way, and to give prospective applicants time to develop
strong and sustainable proposals. Within that framework, the licensing
process is applicant-led, and the applicant identifies where they wish to
set up their station. Ofcom does not decide the locations or target
communities to be served by stations, but it does advise on areas where
there are already existing stations, or where sufficient frequencies may
not be available.

The decisions are complicated and need to take account of the various
requirements in the legislation. Ofcom has to consider four things. First,
it has to assess the application and establish whether the frequency is
available. Secondly, it needs to look at the different proposals, which may
have different objectives, and there may be many proposals for particular
areas which need to be co-ordinated. Thirdly, it needs to assess the plans
to see whether the proposed service meets the characteristics set out by
the legislation in terms of social gain and the likelihood that the plans
are likely to be viable. Finally, it needs to assess the impact on local
commercial radio and, if necessary place, restrictions on the amount of
commercial revenue that the community radio station may generate.

The difficulty at the moment, which affects MKFM, is the high level of
demand and competing applications. This is frustrating for stations that
are on air already and want to acquire a community radio licence to
strengthen their community engagement and grow their listenership. They
want to move more quickly. The suggestion made by my hon. Friend is that we
should adopt a demand-led process which might lead to some applicants in
some areas getting on air sooner, but it would lead to a piecemeal approach
that would slow progress overall as decisions were made in an
unco-ordinated way.

The way in which Ofcom manages the process overall strikes the right
balance between the operational challenges of managing the complexities
associated with licensing and its stated aim to license a community
radiostation for every community that wants one. In fact, since the
legislation
was passed, 276 community radio licences have been awarded.

The current timetable was announced in April 2011 and invited applications
on a region-by-region basis, starting with Wales and the south-west, then
Northern Ireland in March 2012 and then four English regions, one every six
months. Licences for each region are then awarded in batches on a rolling
basis, allowing the complex spectrum planning and frequency planning to be
managed together. If the number of applications received for any region is
high, consideration of all applications can take longer than anticipated,
as was

the case in autumn 2013, so that Ofcom had little choice but to revise its
timetable for inviting community radio applications in its current round.

In mid-October, for example, Ofcom received 38 applications from locations
in west and south Yorkshire, Humberside and the north-west of England. That
was far more than it had anticipated, and therefore in fairness to all
potential applicants from other regions, Ofcom revised its timetable in
order to give itself time to process those applications before moving on to
other regions. That is the cause of the frustration that MKFM is
experiencing. I do not want to dampen its enthusiasm and I shall take on
board some of the points that my hon. Friend made. I am not ready to
fast-track licences for people who are prepared to pay more, because that
would still involve a lack of co-ordination. At the moment, the process is
fair with a very low licence fee for anyone who wants to run a community
radio station, although I want to look at whether we can speed the process
up.

I thank my hon. Friend for bringing this issue to my attention, and I
suggest that I discuss this with Ofcom to see if we can find a way to move
the process forward. I also wish to invite him and MKFM to a meeting in my
Department, should they wish to take advantage of that offer. He has
brought several suggestions to my attention, although I do not think that
moving Milton Keynes out of the south-east is either in my gift or would be
a practical way of taking forward MKFM’s application. I hope to discuss
that further with him when we meet.

Hansard source<http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140228/debtext/140228-0002.htm#140228-0002.htm_spnew117>:
(Citation: HC Deb, 28 February 2014, c597)
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