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<!--StartFragment--><p class="MsoBodyText" style="margin-left:0cm"><font size="3" class="">It took
almost 9 months but finally the Department for Culture, Media and Sport’s
Community Radio Consultation is published and here is The Radio People's take on the
recommendations:</font></p><p class="TableParagraph"><font size="3" class="">The government has removed the ‘absolute rule’
restriction. This prohibited some stations from taking <i class="">any</i> income from on-air advertising or
sponsorship, if they overlapped with a commercial radio licensee whose coverage
area included 150,000 adults or fewer.</font></p><p class="TableParagraph"><font size="3" class="">The ‘absolute rule’ was always overly restrictive and
it’s good to see it abolished, albeit with conditions. Why this wasn’t included in
the Community Radio (Amendment) Order 2010 I’m not sure. What’s worrying is that the
underlying principle of applying funding restrictions to community radio was,
to use the government’s own words, ‘<i class="">to
provide an appropriate level of protection to existing small commercial radio
stations at <u class="">a time when the impact of community radio stations could not be
quantified</u>’. </i>Does this mean that
the government is now able to quantify the impact of community on commercial and
that impact is minimal? Should that be
taken as a comment on the strength of small-scale commercial stations or the
commercial-weakness of community radio? I’m not sure.</font></p><p class="MsoNormal"><font size="3" class="">With
the abolition of the ‘absolute’ rule the government has also said that Ofcom ‘may
want to consider’ whether there is scope for the impact assessments on
commercial radio to be carried out on a lighter touch basis. That will please
the over worked and under resourced regulator I’m sure. But Radio Centre members are clearly
unimpressed.</font></p><p class="TableParagraph"><font size="3" class="">The government also asked if there should be
a ‘relaxation’ of the restriction preventing stations from taking more than 50%
of their income from on-air advertising and sponsorship.</font></p><p class="TableParagraph"><font size="3" class="">Not surprisingly, the response from
commercial radio was to oppose any increase in the 50% limit. The Radio Centre
said that increasing the proportion of income a community station could take from
commercial sources would alter the nature of community radio. Amongst community stations there was a clear consensus
for introducing a Fixed Revenue Allowance (FRA) before applying the 50% rule.
This was a classic ‘alternative close’ by the DCMS. By only putting two options
on the table they predetermined the outcome. A ‘schoolboy error’ by community
radio stations accepting one of these and not choosing the third option that the
DCMS didn’t even put on the table. </font></p><p class="TableParagraph"><font size="3" class="">Nevertheless, the DCMS
report goes on to say <i class="">‘Having considered
the representations made by commercial stations, the Government believes the
fixed allowance should be set at £15,000 per year’.</i> So that’s where the
£15k has come from! It equates to around 25% of the mean average income reported
by community radio stations in 2013.</font></p><p class="TableParagraph"><font size="3" class="">We believe that the FRA and the £15,000 allowance are both problematic,
but first the context of that 50% rule.</font></p><p class="MsoBodyText" style="margin-left:0cm"><font size="3" class="">The legislators introduced the ’50% rule' in an attempt to ensure that community
stations don’t become commercialised. At
the same time, there are already a number of statutory mechanisms in place to
regulate this. In fact, there are still areas
of ownership, accountability and governance that need strengthening. So don’t
be under any illusion, even with the Fixed Revenue Allowance, keeping
the 50% rule is still a serious threat to community radio’s survival.</font></p><p class="MsoNormal"><font size="3" class="">The Fixed Revenue Allowance introduces an income
tax threshold-like system with a ‘tax-free allowance’ of £15,000 and a flat 50% rate immediately
thereafter. It introduces a new layer of reporting for stations and compliance
monitoring for Ofcom. Not that Ofcom’s compliance monitoring is fool proof. We all
know of community stations that regularly and routinely apportion the income
from mixed media campaigns — advertising, sponsorship, outside broadcasts, web
advertising, etc. — in such a way that they don’t infringe the ’50% rule’. That
doesn’t mean that less than 50% of their income is from advertising & sponsorship.
It just means they are ‘smart’ when it comes to creating campaigns and
invoicing funders. This Fixed Revenue Allowance will just give them a greater
margin to play with.</font></p><p class="MsoNormal"><font size="3" class="">And as for that figure of £15,000 - if it grows at
the same rate that the community radio fund has grown over the last 12 years
then it will be less meaningful with every year.</font></p><p class="MsoNormal"><font size="3" class="">The
unique nature of community radio is how it is expressed on air and how the
listener experiences it. The focus should be on creating a distinctive sound
for the sector not jeopardising its financial sustainability with increased
levels of regulation and financial control </font></p><p class="MsoNormal"><font size="3" class="">Maybe
it’s time for another Consultation?<o:p class=""></o:p></font></p><p class="MsoNormal"><br class=""></p><div class=""><font size="3" class="">David & John<br class=""><a href="http://www.theradiopeople.co.uk" class="">The Radio People</a></font></div><div class=""><font size="3" class=""><a href="http://www.twitter.com/theradiopeople" class="">@TheRadioPeople</a><br class=""></font><br class=""></div><div class=""><br class=""></div><p class="MsoNormal"><b class=""><span style="font-size:12.0pt;font-family:Arial;mso-fareast-font-family:Arial" class=""> </span></b></p>
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