[cma-l] Community Radio Consultation Report - Summary of Government Responses

[CMA-L]

*Q.1 To lift the restriction preventing some community radio stations from
taking any income from on-air advertising or sponsorship if they overlap
with a commercial radio licence whose coverage area includes 150,000 adults
or fewer.*

*Government Response:*
The Government believes that the “absolute rule” in its current form is
overly restrictive on community radio stations and should be modified to
allow stations subject to the “absolute rule” to raise up to £15,000 per
year in commercial revenue whether through sponsorship, advertising or
other commercial activities. The Government also believes the restriction
should no longer apply to licences whose coverage area covers 150,000 or
fewer adults where these licences have benefited from sharing premises or
programmes under section 34 of the Digital Economy Act 2010.

*Q.2 If the funding restrictions on advertising were to be reduced ought
the requirement on Ofcom to look at potential economic impact need also to
be reviewed. We welcome your views on this.*

*Government Response:*
As the absolute rule will be modified, but we will retain the provisions
requiring Ofcom, when making licensing decisions, to have regard to the
need to ensure that any new community radio service will not prejudice
unduly the economic viability of local analogue commercial radio services.
However, in view of the changes proposed, Ofcom may want to consider,
whether there is scope for these assessments to be carried out on a lighter
touch basis.

*Q.3. Should there be a relaxation of the restriction preventing stations
from taking more than 50% of their income from advertising and sponsorship.
If your answer to this question is yes, then what should the new
restriction be. How should it be determined? For example, set in regulation
or set by Ofcom following consultation and reviewing periodically.*

The majority of responses (63%) supported a relaxation of the current 50%
restriction however there was no clear consensus to the level this should
be increased to. Only 9 responses gave any indication of what an increase
ought to be, and this ranged from 60%-100% (1 x 60%, 4 x 75%, 3 x 80% & 1x
100%). Two responses suggested that whatever the level of increase this
ought to be determined by Ofcom following further consultation, and scope
for annual reviews.

*Q.4 Of the two options noted which do you support and why. Include reasons
why you dismiss the alternative option. We invite you to provide details on
other approaches. *

*Government Response:*
In reviewing the comments received, there was a clear consensus from
community stations for introducing a fixed allowance before applying the
50% rule, as this would be the simplest to operate and give clarity to
stations and to Ofcom in terms of enforcing the new requirements. Having
considered the representations made by commercial stations, the Government
believes the fixed allowance should be set at £15,000 per year.

*Q.5 – What way/s could a Fixed Revenue Allowance be fairly determined if
this was to be set by Ofcom. Should this be set by Ofcom? What facts would
Ofcom need to take into account in setting an appropriate level of
allowance?*

*Government Response:*
Having considered the representations made by commercial stations, the
Government believes the fixed allowance should be set at a relatively low
figure of £15,000. This equates to around 25% of the mean average income
reported by community radio stations in 2013. This approach favours smaller
community stations. We will ensure that Ofcom is able to review the level
of disregard, following a request by DCMS.

*Q.6 – Would you support a further 5 year extension of a licence beyond the
second 5-year period. If you do not agree, please provide reasons why this
should not happen. *

*Government Response: *
The Government believes that the arguments for a further five-year licence
term for community radio is compelling and that Ofcom to be afforded power
to extend licence for a third term, for a period up to 5 years. The
requisite for an extension Ofcom satisfied the community radio station
continues to meet current licencing conditions and the format and
programming commitments made in its licence application.

Community Media Association
-- 
http://www.commedia.org.uk/
http://twitter.com/community_media
https://www.facebook.com/CommunityMediaAssociation

Canstream Internet Radio & Video
http://www.canstream.co.uk/
https://twitter.com/canstream
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