Broadcasting Act 1996 (Renewal of Local Radio Multiplex Licences) Regulations 2015

Lord Bourne of Aberystwyth Excerpts

Tuesday 10th March 2015 Grand Committee

Moved by

[Lord Bourne of Aberystwyth]

That the Grand Committee do consider the Broadcasting Act 1996 (Renewal of Local Radio Multiplex Licences) Regulations 2015.

Relevant document: 23rd Report from the Joint Committee on Statutory Instruments

[Lord Bourne of Aberystwyth (Con)]

My Lords, the Government have a long-term objective to support a listener-led migration from analogue to digital radio. These regulations support the expansion of local digital audio broadcasting—DAB—network coverage, which has been identified as a key barrier to the uptake of digital radio. These regulations will allow the holders of a local radio multiplex licence to apply for a further renewal of their licence until 2030. They are an important step in supporting the Government’s commitment to expanding the coverage and reach of digital radio in the United Kingdom.

Digital radio continues to grow steadily: it accounted for 24.8% of all radio listening in the third quarter of 2010, but by the same quarter last year that had risen to 37.8%. The number of households with DAB radios has increased from 32% in 2009 to almost 50% now. More than 61% of new cars sold each year now have digital radio fitted as standard; figures for the fourth quarter of 2014 from the Society of Motor Manufacturers and Traders show it up from just 4% in 2010. The strides made are due to the efforts government has made to support the radio sector through this transition, and by the radio industry itself and its growing partnership with the United Kingdom’s motor industry.

In July 2010, DCMS launched the Digital Radio Action Plan. While recognising that the future of radio was digital, we sought to tackle the key barriers facing the industry in support of a future decision on a timetable for switchover, when the 50% of radio listening was to digital and when DAB coverage had been built out to match FM coverage. I stress that 50% is a trigger to consider a possible switchover; it would not be an automatic trigger for switchover.

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[Lord Stevenson of Balmacara (Lab)]

My Lords, I am sorry we have not attracted a bigger audience for this topic. Indeed, it might have been even smaller if I had not been able to rush out of my medical appointment, which grievously overran, so I am a bit out of breath and slightly unsighted on this. Since it has effected nosebleeds, I might suddenly emerge in a haze of red; if so, I will rush out. I will apologise to the Committee if that is the case. I am slightly extending it to make the point and I do not think it will happen, but that was where I was earlier today.

I enjoyed very much the introduction given by the noble Lord, Lord Bourne. It is great to hear that progress has been made in digital audio broadcasting. There was a bit of a blizzard of statistics. I am not sure I have my coverage detached from my percentage of ownership or use, but I am looking forward to reading it in Hansard and I might come back to it if I am still confused. The two things that have struck me are that more than 60% of new cars now have DAB, which has always been the key issue. If one can get the car manufacturers to adopt this as standard then it will naturally drive people’s experience and use and therefore lead to greater confidence and greater usage—or is it coverage? I forget which. I am also very struck by the 50% of home use figure that the noble Lord mentioned and I think that that is a very good base for further development of this issue.

The noble Lord was clear that simply reaching those figures did not mandate a trigger for anything to do with the switchover, but I wonder whether, when he comes to respond, he could simply just go over this again, because it seems to me it would be helpful both to the industry and to policymakers if there was some sense from the Government of what figures they are aiming for. More than 50% seems to me to be a majority. It is usually what tends to happen in these matters and I think in that situation it is pretty close to getting there. Coverage is clearly a bigger issue and I will come on to some points about that, but I do not yet understand quite what is holding it back.

The position with television is, of course, not the same, but it certainly had a significantly different approach. In the case of the switchover for television, a clear target was given with significant time to allow manufacturers and users to plan for the eventual change. I am sure that this was in the thinking and that, once the trigger point has been reached, we will have that, but it would be helpful to get reassurance on that point from the Minister.

As I hope will be clear from what I am saying, we are very supportive of the measures in this SI and do not have any objections to the process. I suppose that, behind it, there is a slight question about where competition in this area will come in, if at all. The worry outlined by the noble Lord, and which drove the earlier decisions to proceed down this route of giving support, particularly to those who are operating the local multiplexes, loses a little bit of bite when you consider the timescales that we are talking about; that is, another 15 years for these people from today and, admittedly, only 10 years from the point at which their licences begin to run out. It is not a huge amount of time, but in a market like that it is certainly quite a significant support mechanism for this area. I just wonder whether any thought was given to the carrot of giving what is, effectively, a 10-year licence to operate. I was going to say something else, but I will not; it involved the word money. It is an area that we will need to come back to at some point. On the general question of the switchover, I am interested to know what the big picture looks like now and whether there was some sense in which competition was deliberately considered but then ignored. I would like some information on that.

I would like to ask a few questions. I may have missed this in the introduction, but there was a problem with the second commercial digital channel, D2 as it was called. What progress has there been on that? That was surrendered by the winner of the auction following the award of the licence. Will he give us an update on that?

What work is being done on technical measures to support radio in particular? There is quite a lot of talk in technical terms around broadcasting more generally about whether satellite, Freeview and other forms of distribution are likely to make an entry. Do we have any information about commercial radio and BBC radio in the digital field? There are ways in which that could be done. Many people now listen to radio on the internet. What exactly is the balance between those? If there is any information on that, I would be grateful to have it. The attempt to bring all licences in on a landing slot of 2030 is probably sensible, particularly if there are thoughts about technological change. It would be interesting to know something on that.

Finally, I am advised that licence rollovers have been granted in the past to analogue commercial radio stations that also broadcast in DAB, which, presumably, is a means of ensuring stability and supporting investment in digital radio coverage and content. The Digital Economy Act extended those licences only to 2017, so it is a rather narrower date than 2020, which is the date that we are talking about for the local multiplexes. Presumably, in the absence of any action by government, we will look to require those licence holders to reapply for their licences. That does seem a little bit tough. I understand that DCMS consulted on this matter with a closing date of 1 December 2014. As we are now in March, will the Minister mention where he is on that, what is likely to happen to it and what timescale is involved?

[Lord Bourne of Aberystwyth]

I thank the noble Lord, Lord Stevenson, very much indeed for his contribution. If he is capable of that with an impending nosebleed, goodness knows what he would be like firing on full health. We certainly wish him well.

I thank him very much for the kind words of support. I will try to deal with the various questions that he raised. I have every sympathy with his fight with the statistics. I also have had one in this area with the acronyms, but am probably just about making my way through that.