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KEEPING LOCAL MEDIA VIBRANT: Reviewing media ownership and local radio rules

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Posted on: 31st July 2009

Ofcom today published two consultations that could pave the way for changes to the local media landscape.

The first is a consultation on recommendations to the Secretary of State for Culture, Media and Sport about the media ownership rules. These include recommendations to remove the local radio station ownership rules and to liberalise the rules around ownership of different media within a local area.

The second consultation focuses on reforming the rules around commercial radio to ensure it can continue to deliver local content.

A CHANGING MEDIA SECTOR

The media sector has grown significantly since the Communications Act in 2003 and consumers increasingly access news and information via different means and from several sources. For example, take-up of broadband has increased from 4 per cent in 2003 to almost 70 per cent in 2009.

Yet even though users are increasingly using the internet as an alternative source of news, our research shows there is still heavier reliance on television, press and radio.

The way that television, newspapers and radio industries are funded is also changing. This is driven by a decline in advertising revenues due to the recession and growing competition from new media alternatives.

The pressures are most acute in the local media sector. Current trends are for newspapers to merge with each other and for radio groups to do the same. But in future, cross media ownership in local areas could be one further way for the media sector to respond to these challenges.

MAINTAINING CHOICE AND QUALITY

Under section 391 of the Communications Act, Ofcom has a duty to review the media ownership rules and report with recommendations to the Secretary of State for Culture, Media and Sport at least once every three years.

In our second statutory Media Ownership Rules Review, we are consulting on recommendations to make changes to the current rules that govern ownership of television, radio and newspapers.

The two principal recommendations for consultation are:
* Removing the rules around radio service ownership that apply to local analogue and digital audio (DAB) services. This means that all local commercial radio stations could be owned by one operator in a local area, alongside the BBC local radio services.

* Liberalising the local cross media ownership rules so that the only restriction is on ownership of all three of: local newspapers (with a 50 per cent or more share of the local market); a local radio station; and the regional Channel 3 licence.

If adopted, the recommendations could help maintain local content while protecting a choice of services and viewpoints at a local level. They would also reduce the regulatory burden on the local media sector and the radio industry in particular.

Ofcom is also consulting on recommending removing the national multiplex rules and leaving the remaining media ownership rules unchanged.

The Media Ownership Rules Review consultation can be found here www.ofcom.org.uk/consult/condocs/morr/

It will be for Government and Parliament to decide whether to make changes to the rules.

RADIO REGULATION

Separately, Ofcom is today publishing its proposals for the future of localness regulation following the Government’s recent Digital Britain report. Ofcom’s regulation and licensing regime is defined by legislation approved by Parliament. We are consulting now so that any changes put in place by Parliament would be implemented rapidly if proposed legislation is passed.

Commercial radio has been particularly hard hit by falling advertising revenues and yet audiences continue to value local commercial stations for their local programming.

The central challenge for regulation is to secure the delivery of local radio content, while at the same time ensuring a viable commercial sector, able to adapt to the digital world.

Following on from the Government’s Digital Britain report, we are consulting on ways to implement a three tier structure for radio which fits not only the existing analogue world but also a future digital world. Any implementation would be subject to Parliament passing the relevant legislation.

This would allow some regional stations to share all of their programming in return for providing a version of that station on a national DAB multiplex and in effect enable the creation of new national stations with more significant scale and reach.

To help secure the future of local commercial radio across the UK, it would allow local stations to co-locate with other stations within newly defined areas, so helping them to save costs. Stations could also request to share their local programming within these areas and they could ask to reduce their hours of local programming in return for an increased commitment to local news throughout daytime.

The consultation can be found here www.ofcom.org.uk/consult/condocs/radio/

NEXT STEPS

Ofcom will consult on the proposals set out in the Media Ownership Rules proposals until 17 September 2009. We will then present our final recommendations to the Secretary of State by 13 November 2009.

The radio consultation closes on 23 October 2009. Any implementation would be subject to Parliament passing the relevant legislation.

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