Broadcasting (Radio Multiplex Services) Bill

Kevin Hollinrake Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Friday 3rd February 2017 Commons Chamber

[Kevin Foster (Torbay) (Con)]

I urge my hon. Friends the Members for Aldridge-Brownhills (Wendy Morton) and for Bury St Edmunds (Jo Churchill) not to press their amendments.

I understand the purpose of amendment 1, and I also noted the comments of the hon. Member for West Ham (Lyn Brown). I realise that the amendment is intended to ensure that the views of local communities can be heard when a licence application is made. However, I hope that my hon. Friend the Member for Aldridge-Brownhills will consider withdrawing it, given that the aim of the Bill is to create a lighter-touch regulatory regime for the smallest radio stations.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The Bill is indeed about small commercial stations, and about the ability of community groups to broadcast. Does my hon. Friend agree that we must not allow the multiplexes to be dominated by large media companies, so that we do not end up with monopolies or people holding several licences?

[Kevin Foster]

I shall deal with the point in some detail when I speak about amendment 3. However, I agree that the thrust of the Bill is to enable community stations to go on to DAB. Theoretically they are already able to do so, but at present the scale is so large that very few operators of community stations have that opportunity. The example of London is often given. London’s local area is London, so community station operators wishing to operate in a particular part of it would find it extremely difficult to do so, because they would have to pay the costs of transmission to London. The sponsor’s message about an MOT for a car in Croydon is unlikely to be very relevant to someone living in Barking and Dagenham.

As I said in Committee, the Bill should be seen as the first stage of a three-stage process. It provides a legal framework for Government action. Without it, the DAB community sector simply will not exist, and the 10 trials will disappear. It also provides for a very limited ability to amend primary legislation through the affirmative procedure for specific purposes. That reflects what was done with community radio in 2004 and with local television in 2012, in strikingly similar circumstances and for strikingly similar purposes. I know that Members rightly wish to be careful about provisions of that kind, but I think that this provision makes sense, given its striking similarity to parliamentary precedent. The second stage will be the orders that will be necessary to create the detailed structure, which will be subject to detailed consultation. The third and final stage will be the issuing of licences by Ofcom to the individual multiplex operators.

Amendment 1 asks for public consultation. In fact, my right hon. Friend the Minister for Digital and Culture confirmed on Second Reading that the Government would initiate a full consultation on the details of how the new licensing scheme for small-scale digital radio multiplexes should operate. That consultation will enable the Government to take account of the different views expressed by community and commercial radio operators, and provide appropriate protections to ensure that licences offered by Ofcom are taken up and the position of community stations wanting DAB carriage are protected.

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The biggest change in the past few years, and certainly since the previous legislation, has been the expansion of DAB into car radios. Not that long ago, few cars—perhaps only the most expensive vehicles—had a DAB radio installed, but quite a number of cars now have one. When drivers switch to digital radio, they will find a selection of stations, including the national radio stations and almost certainly the syndicated regional stations, but some commercial radio stations that are actually not that small, such as Breeze FM in my constituency, are not on DAB. That will lead to people either migrating to consolidated media services, reducing choice and diversity, or sticking with FM. I suspect, however, that there will be a move in the long run to want to consider when radio could be switched over.

[Kevin Hollinrake]

My hon. Friend makes a good point about small community radio stations that are on FM, rather than DAB. Vale Radio in my constituency has exactly that problem. It covers the Vale of York and the Vale of Pickering, but it cannot currently get on DAB because of the costs and the licensing regime. The Bill is intended to help such organisations.

[Kevin Foster]

I thank my hon. Friend for highlighting the whole purpose of the Bill, and we can discuss the current regulatory system further on Third Reading. If the Bill does not survive today, or if it gets talked out, the national and local multiplexes will continue, which is fine for the largest radio operators because it suits their needs. The small community radio stations would take the hit and ultimately have fewer users. There would be less choice and diversity, and we would have a regulatory system that just does not reflect advancing technology.

I made the point on Second Reading that in the 1960s the outcome of an outdated attitude to broadcasting regulation was ships sitting just off our shores. The reality of not passing the Bill would be more community radio stations moving on to the internet. If we wanted to, my hon. Friend and I could set up an internet radio station in our office and start broadcasting. I am not sure how many people would want to listen—I see some nods of assent—but that is how technology is moving.

We can broadcast over the internet, but it does not have the ease of access of traditional radio broadcasting mediums. Yes, it is there and, yes, it is growing—the tech-savvy probably have apps on their phones so that they can listen—but it is not as easy as carrying around a simple, portable digital radio that is possibly smaller than a laptop, an iPad or a smartphone. That is why it is so important that we look to progress and look to pass the Bill unamended. There needs to be flexibility for the future. I would not want to set up restrictions in the Bill for well-intentioned reasons and find that, in a year or two’s time, we are stunting growth and development in a rapidly moving technology.

Let me be blunt. If we told our forefathers 30 or 40 years ago that a radio broadcasting system could be run off a laptop this big, they would have sat there in amazement. A broadcasting station then was a large room with a whacking great tower on it.

[Kevin Foster]

Yes, and that is the way technology is moving on. The Bill needs to be flexible, but it also needs to be adaptable because there are so many different locations. The Bill does not replicate the BBC’s guarantee of carriage on local and national multiplexes. The guarantee was relevant for the time and for the scale of those operations. I am loth to set a specific requirement in every single licence to guarantee community access, but it is almost certain that Ofcom, when looking at licence applications, will want to consider how it keeps diversity on a particular multiplex or how it gives opportunity. The evidence is that community radio stations have benefited fairly well from the small-scale trials. If we start to have a reservation or price controls—that is another thing we could consider—Parliament would get into odd arguments about exactly where we set those price controls in particular areas. The nature of small-scale multiplexes means that there will be lots more of them, which will inevitably bring down some broadcast costs.

[Kevin Hollinrake]

Will my hon. Friend give way?

[Kevin Foster]

Briefly, but I will then make some progress towards a conclusion.

[Kevin Hollinrake]

There has to be an incentive for multiplex owners to invest in technology and equipment. Does this require significant investment? What rate of return can they expect? Obviously we need to create an incentive for such equipment to be established.

[Kevin Foster]

The Bill gives permission for some of these multiplexes to be run not for profit, effectively as community multiplexes, and there is some evidence that other operators—I gave the example of a university or a local authority—might wish to provide the infrastructure. I make it clear that we do not want to get into the game of local authorities running radio stations—that is not a council’s job. We could run the infrastructure under this licence for not-for-profit purposes, but a commercial station that makes a profit could be carried. The key issue is that, at the moment, someone can go from running an internet radio station in their bedroom to running a small-scale FM operation, and then build up their business and their listeners to become a more significant company. Under current regulations, someone wanting to go on to the digital system in some areas needs to be turning over £1 million a year to be able to pay the broadcast fees as part of that turnover. That is why this Bill is so important.

I am conscious of time, so I will wind up. I urge my hon. Friend the Member for Aldridge-Brownhills to withdraw her amendment for the reasons that I have outlined. I also urge the Community Media Association and groups such Radiocentre, which have been active in contacting Members, which I welcome, to work with the Government through the consultation to produce the best outcome that can deliver the objectives that I have outlined. This Bill is about opening up an opportunity, giving community stations a chance to go digital and helping stimulate creativity as we have seen in the 10 trial areas. I will say more on Third Reading, but, for now, I hope that my hon. Friend has received the assurance that she needs and will withdraw her amendment.

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[Kevin Hollinrake]

I congratulate my hon. Friend the Member for Torbay (Kevin Foster) on bringing the legislation forward, and on his deep understanding of some of the technologies that lie behind the fantastic evolution in our broadcasting abilities. I very much support the Bill, particularly as my hon. Friend said that it will create more competition for commercial operators in a marketplace that can be dominated by quite large national chains, even though they may present themselves as local operators. Small commercial operators competing for revenue and advertising with larger stations or networks can only be good for the opportunities of local people, businesspeople and community operators.

Vale Radio in my constituency is an excellent community operator with a deep understanding of the local area. It is run by local people, who regularly do slots such as “A day in the life of an MP”. In fact, they came to Westminster only last year to see what happens in a typical MP’s day. That local connection is incredibly important. Of course, these smaller operators need more affordable access, which is what the Bill is about. It will break down the larger DAB areas into chunks that are about 60% smaller than typical schemes available now. That inevitably means better, cheaper accessibility with bandwidth and spectrum put aside specifically for small commercial operators and community stations.

As my hon. Friends have mentioned, the equipment, including the multiplexes themselves, can be provided for not-for-profit operators, which again will mean better access at a lower cost that is more suitable for community operators. Community operators may be niche channels, but they very much relate to the local area with the content and local insights of their programmes. There is clearly demand for such channels and for this spectrum. I believe that there are 444 small commercial stations or community operators that would like to get on to DAB, but have no access at the moment. DAB is a growing part of the broadcasting market. Some 45% of consumers today listen on digital, and that figure will grow to 50% by the end of the year. Digital radio is certainly significant in providing access to the market, and it is how people will listen to radio in the future.

I would like to question my hon. Friend and the Minister about the number of licences multiplex owners can own. I referred in an intervention earlier to the need to make sure we do not end up in a monopolistic situation, with a media company owning lots of these multiplexes and having control over pricing. It is vital that there is a restriction on the number of multiplexes that one licence holder can hold. At the same time, of course, we need to balance that with the need for investment—clearly, there is investment in the technologies and the equipment and in the staffing—to make sure the Bill delivers a solution that sees the roll-out of multiplexes, while making sure community operators and small commercial stations get access at the right price.

[Kevin Foster]

I will keep this intervention fairly short because I am conscious that the Front Benchers will wish to say something. Perhaps I can reassure my hon. Friend. If he looks at clause 1(4)(b), he will see that Ofcom would be able to

“make provision as to eligibility to hold a small-scale radio multiplex licence, including provision disqualifying persons who have an interest in a national or local radio multiplex service”.

That means that if it felt a monopoly was emerging in an area, it could use its powers. However, this is probably one more issue for detailed consultation and for the order, rather than for the Bill itself.

[Kevin Hollinrake]

Yes, my hon. Friend makes a good point. Perhaps monopoly is too strong a word. Nevertheless, we could get into a situation with a bit of a hinterland, where the operator of these multiplex licences has too strong a control, particularly in a given area. Putting some protections in place would make sure that affordability of access remained, while retaining an incentive for a commercial operator—these may well be commercial operators rather than not-for-profit operators—to invest.

I would like to congratulate the Department on its foresight in starting the trial in 2014 and on putting the time and investment into this new technology, which has led to its potential roll-out and created a new opportunity for a lot of commercial stations and community operators.

To conclude, I congratulate my hon. Friend again on the deep understanding he has shown of the process of Parliament in getting this far—he is nearly over the finishing line—and on his understanding of the technology. His work will help many operators and many communities.