FM Radio Applications

Lord Vaizey of Didcot Excerpts

Tuesday 8th September 2015 Westminster Hall

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

It is a pleasure to serve under your chairship, Mrs Main. I thank my hon. Friend the Member for Cannock Chase (Amanda Milling) for securing this important debate about the future of Cannock Radio. I am an unashamed fan of community radio and it was a pleasure to hear how, within the space of a year, Cannock Radio has established itself as an important online presence and is making a contribution to the community. That is all too typical of the contributions that community radio stations make: providing not only important ultra-local information and training opportunities for people in the community, but an opportunity for community organisations to promote their work.

Unfortunately, I cannot praise a community radio station in my constituency, because I do not have one. I have a truly excellent local independent station in JACKfm, but it is one of the great tragedies of my life that Didcot, the main town in my constituency, does not have a community radio station, despite my dropping strong hints to everyone I know in Didcot that they should consider one. It would be the perfect place, not least because of the stunning success of Didcot Town football club, but I digress. I get my community radio fix locally by visiting the constituency of my hon. and learned Friend the Member for South Swindon (Robert Buckland), home to SWINDON 105.5, which is another great example of the success of community radio. It is the commitment of all the stations that have taken up licences since 2005 that has firmly established community radio as part of our radio landscape.

As I hinted earlier, community radio stations range from stations serving small rural communities, such as Mearns FM and Bute Island Radio in Scotland, to stations for our forces such as British Forces Broadcasting Service Edinburgh and BFBS Colchester, to stations targeting particular communities such as students or ethnic minorities. Community radio meets an important gap not served by other services such as local commercial radio. As I said earlier, it provides a genuine link to communities and represents their interests. I look forward to visiting Cannock Radio at the earliest opportunity to see it in action. The national picture is that we have some 230 stations with a licence, with more due to come on air from the current licensing round. Demand for licences remains strong.

While we are perhaps concentrating on the difficulties that Cannock Radio has experienced in its relationship with Ofcom, it is important to recognise Ofcom’s role in helping the community radio sector achieve success, ensuring a range and diversity of community stations that few of the access radio pioneers in the early 2000s could have imagined. The Government help the sector not only through licensing, but also financial support through the community radio fund. I am pleased that we have been able to maintain the fund despite the difficult economic climate and the need to find savings in the Department’s budget. We have also kept the rules governing community radio under review, because we do not want stations to be overburdened by regulation and want them to have the opportunity to raise their own finances. We reviewed the rules relating to financial restrictions on advertising and sponsorship, but it is important that we maintain the dividing line between community stations and commercial radio. We also gave community stations the ability to extend their licences for a third five-year term. Those changes were brought in earlier this year and were supported by the community radio sector and by the Community Media Association, the sector’s member body, with which my hon. Friend the Member for Cannock Chase has worked closely.

My hon. Friend will recognise that demand for community radio stations is great and sometimes exceeds supply in terms of licence availability and applications. Ofcom needs to manage that demand, because it must ensure that spectrum is available and is used effectively and it must be fair to the various community groups and organisations that want to hold a community radio licence.

The Community Radio Order 2004 established the regulatory framework and the powers under which Ofcom licenses community radio stations. The arrangements were developed with due care by Ofcom following a consultation with a range of stakeholders, including the Community Media Association, leading to an agreed approach under which invitations to apply for licences are carried out on a region by region basis over a three to four-year period, giving prospective applicants the time to develop strong and sustainable applications for their licences. At the same time, it allows Ofcom to provide advice in areas where, because of existing use, the available frequencies might be insufficient. In assessing applications, Ofcom is governed by the various requirements set in legislation, which specify among other things that applicants must demonstrate that they will be run on a not-for-profit basis for social gain, will retain distinctive characteristics and will be distinctive.

I mention those points to emphasise that such applications receive careful consideration, because, as my hon. Friend indicated, such applications can be time-consuming and resource-intensive. As part of the process, Ofcom needs to consider whether awarding licences in one area may restrict development in a nearby area because of the scarcity of suitable FM spectrum or where there may be an over supply of similar services in an area that might mean that a particular community service was unviable. The process of assessing a community radio licence application is therefore not completely straightforward and depends on a number of variables. The large number of applications that each round generates and the various checks and technical work mean that it can take time to award a licence.

I take on board my hon. Friend’s points about the frustrations felt by Cannock Radio and its proposal that community licences should be available in effect on demand. I acknowledge that were that process to be introduced, it could help some stations get on air sooner, but there is a risk that moving to a purely demand-led system for community radio licences could slow down the process overall, because decisions would be made in an unco-ordinated way. The current system of regional rounds, as developed by Ofcom with the Community Media Association, enables Ofcom to manage the licence process in a way that is fair and equitable to all comers and to manage all the moving parts, as it were, in a particular region. The way in which Ofcom manages that process strikes the right balance between the operational challenges of managing the licensing process and Ofcom’s aim to license a community radio station for every community that meets the criteria. It avoids the situation with earlier rounds where Ofcom initially allowed applications from all over the UK, resulting in a large number of applications being submitted, with many applicants having to wait a long time for their applications to be considered.

The third licensing round is due to be completed this year, so it is a good time for Ofcom to look at whether changes can be made to the design of the next round to reflect the fact that 230 licensed community radio stations are on air. That is another important point in favour of my hon. Friend’s argument. We have established a critical mass of community radio stations. She raised the issue of Ofcom inviting bids in areas where demand for spectrum was determined by Ofcom to be low. She indicated that Cannock Radio would in effect be the only bidder for such a community radio licence. The suggestion is interesting, and I would like Ofcom to consider looking at it in the design of the next licensing round. I know she has had an exchange of correspondence with Ofcom on that point.

It is important to note that over the period of awarding community radio licences, Ofcom has improved its guidance on the regions where it might be difficult to find a radio frequency. That allows people to determine whether there will be serious hurdles to providing a community radio station. Conversely, where many frequencies are available, it allows for an area not to be unfairly excluded. It is important to note that Ofcom has taken steps to streamline its internal processes to enable it to process applications more quickly.

My hon. Friend also suggested in her excellent speech that community radio stations coming out of cycle should have the option of paying an enhanced fee—a premium licence fee application. Some difficulties surround that suggestion. It is important to remember that community radio licences are not commercial licences. The proposal could be perceived to be unfair on organisations that are not as strongly funded as others. As far as possible, we want to keep a level playing field for all those who are thinking of applying for community radio licences. I take her point about staffing, however, and I know that Ofcom is looking seriously at how it can speed the processes up in future rounds.

I know how disappointed Cannock Radio was when its application for a community radio licence was rejected because it was in effect submitted outside of the deadline date. My hon. Friend gave the context. I of course recognise that Cannock Radio needs to access a radio platform to develop the station further and that FM is its best option, although I note that it has the opportunity to bid for an AM licence later this year. I also acknowledge the uncertainty—she made this point in her speech—on when details of the next licensing round for FM licences will be announced. I understand that Ofcom will be announcing details of round 4 in 2016, and I hope that Ofcom will make those details as clear as possible, as soon as possible.

While I have time, I will quickly mention the role that digital radio can play in the future of community radio, and perhaps in the future of Cannock Radio. We are working on a process to give community radio stations and small independent stations a route through to digital audio broadcasting. The Government make no secret of the fact that we believe that digital radio is the future of radio. Digital radio is growing at a significant rate. As DAB coverage improves significantly between now and 2016, it is important that we put in place a system to allow community stations to migrate on to DAB frequencies, particularly where an FM frequency might not be available. Previously, that has been difficult for them to do because with the multiplexes, the network for digital radio has effectively been at county and regional level.

Some 18 months ago, we announced details of funding for a major trial of low-cost, small-scale DAB technology, which should open the way for many community stations to go digital. We are trialling that in 10 areas, the first of which was launched last month. The rest are due to come on air this month, carrying a total of 60 services. We will complete the trial next year. Subject to a successful technical evaluation, we will bring forward plans next year to allow small stations to be licensed on a digital platform.

I hope that Cannock Radio and my hon. Friend do not find my remarks too discouraging. I hope that Cannock Radio will continue to build its online service into an essential local resource and look for an opportunity to obtain a community radio licence in the next round. My hon. Friend made perfectly valid points about timings and processes, and I know that Ofcom will have taken note and will take account of them when it comes to develop the process for the next phase of community radio stations.

As my hon. Friend the Member for Milton Keynes South (Iain Stewart) indicated, I tend to take a practical approach with these issues. I have outlined some of the parameters within which we are operating, some of the frustrations and the wider context of how Ofcom manages community radio licences, but I am more than happy to continue discussions with my hon. Friend the Member for Cannock Chase on how we can give Cannock Radio a route to an FM licence. Fundamentally, I want to do all I can to help any community radio station grow and expand; I recognise the passion and enthusiasm that so many wonderful volunteers all over the country bring to community radio. I also recognise the passion and enthusiasm of my hon. Friend, the new Member for Cannock Chase, and her championing of the cause on behalf of her constituents.

Question put and agreed to.