Small-Scale DAB Licensing consultation – Comment from the Community Media Association on the Government’s proposals


DCMS

The Department for Digital, Culture, Media & Sport (DCMS) has published its response to the industry consultation on the development of Small Scale Digital Audio Broadcasting (SSDAB).

The Community Media Association (CMA) is the sector body for community media in the UK and includes among its membership the majority of the UK’s licensed community radio services. There are currently 268 licensed community radio services in the UK which stand to benefit from the opportunity for carriage on DAB through the licensing of SSDAB multiplexes. These represent 75% of existing UK FM and AM radio channels that are currently not able to broadcast on DAB because of constraints of cost and capacity.

Whilst the CMA welcomes the development of SSDAB as an opportunity for community radio to gain carriage on DAB we are is disappointed that the Government has not taken on board several substantive proposals from the community radio sector that, taken together, would increase the likelihood that community radio services will take up the SSDAB opportunity and would bring greater public value in terms of local media pluralism.

Furthermore, the CMA’s recommendation to limit ownership of multiplex licences to single entities was proposed to develop a plurality of media ownership and provide a robust broadcasting ecosystem better able to withstand the vicissitudes of market circumstances. We acknowledge some concession from DCMS to the CMA’s position but have reservations that concentrations of multiplex ownership will still arise and stifle sector diversity.

We welcome the commitment in the DCMS plan to guarantee carriage for community radio services however we remain concerned that the ownership proposals are likely to lead to commercial for-profit multiplex operators seeking to cherry pick the most attractive urban coverage footprints to extract rental value from the SSDAB licences without any commitment to return that value to local communities. The risk of the ownership proposals from DCMS is that where there is profit to be made, commercial multiplex operators will benefit and community radio services will pay, whilst in unprofitable locations it will be left to non-for-profit operators to try to develop alternative economic models.

Given the Government’s response to the Consultation, the CMA believes that public value will be better achieved by encouraging, through the licence selection and award process, the emergence of non-profit SSDAB multiplex operators in as many locations as possible and that priority should be given to such operators especially where they are formed as local consortia with existing community radio services as stakeholders and beneficiaries. For example, offering free carriage to community radio services and/or distributing profits to support community media content.

The CMA would like to use this opportunity to remind DCMS and the regulator Ofcom of their ongoing responsibilities to existing broadcasters and to reiterate their commitment to continue to support and develop community radio broadcasting on analogue platforms. The Community Radio Fund, frequently referred to in the Consultation Response, at £400,000 remains insufficient for nearly 270 community radio stations currently broadcasting. With potentially many new community radio stations joining the SSDAB platform under a C-DSP licence, it is clear that substantial investment in the Community Radio Fund is required to ensure the continued success of the community radio sector for those stations that wish to broadcast on both analogue and digital.

It should also be noted by DCMS that a new Community Radio (Amendment) Order ought to be confirmed in advance of 2020 when the first tranche of community radio licences will require renewal to ensure that current licensees can continue broadcasting beyond their present licence term. Additionally, DCMS should use the opportunity afforded by a new Amendment Order to remove the additional commercial restrictions on community radio stations operating a service which overlaps with any local commercial radio service serving a potential audience of fewer more than 150,000 adults.

NOTES:

The Community Media Association (CMA) champions access to community radio and local television for all to change lives, build diverse participation in social dialogue and give even the smallest communities a voice.

A non-profit membership organisation formed in 1983, the CMA leads advocacy for and governance of the UK’s movement of community broadcasters, which grew rapidly following a successful CMA campaign to establish community radio FM licences in 2004.

The CMA champions its members to uphold the Community Media Charter of best practice and celebrates members’ achievement with the annual Community Media Conference, regional networking events, a monthly Community Media Newsletter, an informative online discussion forum, and supports Internet radio through its flagship media streaming service, Canstream.

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One of the informing documents for the Government’s announcement on Small-Scale DAB is Ofcom’s Communications Market Report 2018 for the United Kingdom. It states that (page 113):

At £11.6m, total revenue for the community radio sector was flat in real terms [2015-16].

And that

Due to an increase in the number of stations that submitted financial information for 2016 (227, up from 216 in 2015), the average income per station fell by 5% in real terms to £51,251. The median, or mid-point, income level for the 227 stations fell by 3% in real terms to £31,890.

I’m concerned that both Ofcom and DCMS are representing this figure in cash terms, when it should be made clear that this includes grants, charitable fundraising and includes volunteer services and in-kind services that have been negotaited.

Are these figures representative of actual cashflows that are accumulated and spent by community radio stations?

Accordng to Ofcom the 2018 figures indicate a 1% increase after a sustained number of years of declining income.

The figures are broken down in the Media Nation 2018 report:
Ofcom-Media-Nation-001
Ofcom-Media-Nation-002

Do these figures feel correct? Can we verify them independently? Are they representative of the income distribution of community radio stations across the UK?

Rob

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Reading through the documentation is going to take a long time.

Initially, I am concerned by this statement:

The Government will… place requirements on new small scale multiplex licences to make a certain proportion of capacity on small scale DAB multiplexes available to community radio stations holding new C-DSP licences.

But it is answered in the detailed statement - that each multiplex will have places for three community stations who apply for the C-DSP licences. These are stations that meet the same community radio criteria as not-for-profit with social gain aims.

There has been a significant responce to this consultation, and it will be worth reading through the submissions from all the groups and individuals that are aviable on the DCMS website:

The Government will now ask Ofcom to work on the “detailed arrangements and to bring forward an Order amending the relevant legislation as soon as Parliamentary time allows.”

The Order will:

  • create a new category of small scale DAB multiplex licence.
  • place requirements on new small scale multiplex licences to make a certain proportion of capacity on small scale DAB multiplexes available to community radio stations holding new C-DSP licences.
  • require Ofcom to set this proportion based on an assessment of current and anticipated demand - this will allow new C-DSP licence holders - once introduced - to benefit from reservations.
  • set a minimum reservation for 3 community stations in each licensed area.
  • allow Ofcom to vary the amount of reserved capacity above this level for a licensed area depending on Ofcom’s assessment of local need.
  • not extend the reservation of capacity to small commercial stations.
  • create a new C-DSP category of digital sound programme licence for community stations broadcasting on digital. C-DSP licence holders will need to commit to the same social value requirements as existing community stations. They will similarly need to be constituted as not-for profit vehicles for social gain. All community stations wanting to access reserved capacity on a small scale multiplex will therefore need a C-DSP licence.
  • allow C-DSP holders to access reserved spectrum on one small scale multiplex in the geographical area they are based in (‘home area’)
  • enable both commercial and not for profit entities to hold a small scale multiplex licence.
  • place a duty on Ofcom to collate and publish information on carriage charges.
  • place restrictions on the level of shareholding and number of small scale multiplex licences for national and local multiplex operators.
  • place restrictions on local multiplex operators taking a small scale licence (or having an interest in the licence) in the same area.
  • not restrict DSP and C-DSP licence holders from taking carriage on different small scale multiplexes (though C-DSP licence holders will only be entitled to access reserved spectrum on one ‘home’ multiplex) give Ofcom the flexibility to determine the size of small scale multiplexes but set a 40% limit as the general maximum based on the population served by the corresponding local multiplex.
  • set out 7 years as the length for small scale multiplex licences with a renewal for 5 years.
  • not exclude the BBC from being able to take carriage on small scale multiplexes. But exclude the BBC from the system of reservations which apply to local DAB multiplexes.

My initial take on this is that it is a mixed-bag. The recognition of community radio at the heart of this regulation is welcome, but as with anything, the devil is in the detail, and practice is different than policy aims

Rob

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Here are the key points from the DCMS recomendations:

Question 1 - reserving capacity for community stations.

  • We will require Ofcom to reserve capacity on small scale multiplexes for community radio stations.
  • These will be “hard” reservations that are only available for eligible community stations (C-DSP licence holders).
  • Ofcom will set the reservation, as a proportion of multiplex capacity based on Ofcom’s assessment of current or likely needs.
  • Overall, we believe this approach is the best way to ensure community radio stations can gain access to a digital platform.
  • We believe a “hard” reservation will also act as a strong incentive for small scale multiplex operators to set affordable fees for community stations in order to utilise the reserved capacity.
  • We recognise there is risk that some reserved capacity could go unused due to a lack of demand from community stations and to address this we will seek a power to allow Ofcom to be able - after a period of time - to vary the level of reserved capacity, following a request by the operator for a licence variation.

Question 2 - setting an upper limit on reserved capacity.

  • We believe it is important to provide community stations with a reasonable opportunity to broadcast on small scale multiplexes.
  • Therefore, we have concluded that rather than setting a maximum level for the amount of reserve capacity, as a starting point we will set a minimum level of three community stations in each licensed area.
  • Thereafter Ofcom will have flexibility to set the level of reservations area by area, based on the minimum, taking account of current and anticipated demand.

Question 3 - allowing small scale operators to temporarily offer unused reserved capacity to other radio services.

  • Although there was support for the principle of offering unutilised space to temporary services, we noted concerns that this could keep out community stations and agree that it could potentially create a strong incentive for multiplex operators to set carriage fees that may be unaffordable for community stations, especially in areas where reserved slots are attractive to commercial services. In opting for a “hard” reservation (see Q1), we will not be taking our earlier proposal forward.

Question 6 - restrictions on holding small scale multiplex licences.

  • We have reflected on the views expressed and DCMS will propose a number of mostly small modifications to those proposed; details here will be finalised when laying the SI.

- Existing Holders or part holders of national multiplex licences

  • Reduce shareholding to 30% of an entity that holds a small scale radio multiplex licence to encourage more consortia models but increase the maximum number of licences to 6.
  • We think this deals with concerns about the size of influence whilst allowing groups with subsidiary heritage local radio stations to be active in their support of small scale multiplex projects in their locality.

- Holders or part holders of local multiplex licences

  • Maintain the 50% limit on shareholdings but place an absolute limit on the number of small scale licences which an organisation can have any interest in to no more than to 25% of all small scale multiplexes licensed at a given time.
  • We will retain the exclusion in areas covered by a local multiplex where the operator has an interest (to ensure competition and choice).

- Organisations with no interest in any national or local multiplex licence

  • Have no shareholding requirements but, in view of concerns expressed about the risk of concentration.
  • Limit the number of licence which an organisation can have any interest in to 25% of all small scale multiplexes licensed at a given time.
  • Limits will help to ensure plurality amongst licensees and should deal with concerns about the risk to regional or quasi national structures.

- Step aside rule

  • Retain the step aside proposals in favour of community radio backed proposals and applied to consortia with members that have any interests in national multiplex licences but will consider whether this needs to a requirement set in the Order or under Ofcom detailed guidance setting out award criteria.

Question 8 - 40% limit in areas already served by a local multiplex.

  • We noted comments asking whether population or geographic area would be used to determine the size of small scale multiplexes.
  • The methodology will be based on population.
  • Following detailed discussion with Ofcom we have concluded that a 40% upper limit (based on population coverage) is appropriate.
  • It should be noted that in planning terms for small scale multiplexes this will be used as a maximum limit and not as a norm.

Next Stage
The next stage is to work with Ofcom on the detailed arrangements and to bring forward an Order amending the relevant legislation as soon as Parliamentary time allows. The Order will:

  • Create a new category of small scale DAB multiplex licence.
  • Place requirements on new small scale multiplex licences to make a certain proportion of capacity on small scale DAB multiplexes available to community radio stations holding new C-DSP licences.
  • Require Ofcom to set this proportion based on an assessment of current and anticipated demand - this will allow new C-DSP licence holders - once introduced - to benefit from reservations.
  • Set a minimum reservation for 3 community stations in each licensed area.
  • Allow Ofcom to vary the amount of reserved capacity above this level for a licensed area depending on Ofcom’s assessment of local need.
  • Not extend the reservation of capacity to small commercial stations.
  • Create a new C-DSP category of digital sound programme licence for community stations broadcasting on digital. C-DSP licence holders will need to commit to the same social value requirements as existing community stations. They will similarly need to be constituted as not-for profit vehicles for social gain. All community stations wanting to access reserved capacity on a small scale multiplex will therefore need a C-DSP licence.
  • Allow C-DSP holders to access reserved spectrum on one small scale multiplex in the geographical area they are based in (‘home area’)
  • Enable both commercial and not for profit entities to hold a small scale multiplex licence.
  • Place a duty on Ofcom to collate and publish information on carriage charges.
  • Place restrictions on the level of shareholding and number of small scale multiplex licences for national and local multiplex operators.
  • Place restrictions on local multiplex operators taking a small scale licence (or having an interest in the licence) in the same area.
  • Not restrict DSP and C-DSP licence holders from taking carriage on different small scale multiplexes (though C-DSP licence holders will only be entitled to access reserved spectrum on one ‘home’ multiplex)
  • Give Ofcom the flexibility to determine the size of small scale multiplexes but set a 40% limit as the general maximum based on the population served by the corresponding local multiplex.
  • Set out 7 years as the length for small scale multiplex licences with a renewal for 5 years.
  • Not exclude the BBC from being able to take carriage on small scale multiplexes. But exclude the BBC from the system of reservations which apply to local DAB multiplexes.

The Order will also include detailed provisions such as the criteria for awarding multiplex licences where these are different from the provisions of the 1996 Act. In relation to carrying out its functions, it should be noted that Ofcom would comply with the statutory instrument and, where this provides discretion, exercise that discretion in line with its general duties under the Communications Act 2003.

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I think the focus now should perhaps be on the criteria that ofcom will use to decide the application. The process should focus on maximum benefit to the community.

If someone offers to run a multiplex that costs nothing to go on and it is technically and financially achievable then this should be preferred over someone who wants to charge £5k per year per station.

I also would like to see multiple multiplexes advertised in main conurbations. I know around here there have been no expressions of interest from two rural areas that were on the ofcom frequency plan. Therefore take those frequencies and advertise multiple operators on the nearby major city and generate a competitive environment that keeps the operators on their toes.

SSDAB doesn’t have to be national, it just has to work and provide access to the airwaves for groups that can’t get it otherwise. The recent community radio applications should also be taken in to account. The fact that locally in two of the proposed areas there has never been a single community radio application (or SSDAB expression of interest) says a lot. Move the frequency to the nearby city which has had loads of applications over the years and createa competitive environment for the benefit of the consumers.

The technical requirements should also be defined and agreed, including the commercial support levels such as time to fix, availability, response time to enquiries, etc. Once this has been agreed this should be a simple pass/fail test on the application. Make it about what the operator can do for the community, not what an amazing office someone has. As long as they aren’t a one man band with no technical ability who likes to take long holidays and not arrange any cover then it doesn’t matter.

However sight must not be lost of the fact stations and listeners are depending on this to work. Some community stations transmitters are a play toy for the local radio amateur. Listeners and other stations should not have to suffer as a result, it should just work and stay on air 24/7/365 without being taken down every 5 minutes for a tinker.

Controversial comments I know!

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Yes, there is a somewhat vague use of language in the DCMS document that needs to be tied down to more specific instructions or policies that need to be included in the legislation. The ‘demand-led assessement’ approach that Ofcom has to undertake seems to be very indeterminate. Likewise, the pricing transparency approach seems rather odd to me - there are no guarantees that community radio stations will not get locked out because the carriage fees are unafordable. How would this be adjudicated by Ofcom if someone feels agreeved?