Legislative Reform (Renewal of Radio Licences) Order 2020 — House of Lords, 2020-11-27
Topic: Technology
Diana Barran (Conservative, Centre-right): My Lords, I am pleased to introduce this statutory instrument. It is a short but important order that will bring clarity and certainty to the UK’s commercial radio sector. In particular, it will allow the holders of commercial analogue—that is, AM and FM—radio licences to renew those licences for a further 10 years. Additionally, it will give smaller stations the ability to renew their licences if they commit to carriage on small-scale DAB multiplexes, where these are available. This provision will have the most immediate effect for the three national licences—Classic FM and the AM licensees, Absolute Radio and talkSPORT—as well as around 100 local licences which are due to expire over the next decade The measure meets the tests set out in the Legislative and Regulatory Reform Act 2006. It has been approved by the Delegated Powers and Regulatory Reform Committee, and the Regulatory Reform Committee in another place, as being appropriate for a legislative reform order with the affirmative procedure. Since the launch of the Digital Radio Action Plan in 2010, the Government have supported the listener-led transition of radio from analogue to digital, through measures including the expansion of the digital transmission network to substantially match FM coverage. Digital now accounts for around 60% of listening, having been closer to the 20% mark only 10 years ago There is now a need for a new plan to co-ordinate the next phase. In February 2020, we announced a joint government-industry review of the future of digital radio and audio in the UK, which is due to report in March 2021. However, analogue broadcasting —particularly FM—remains an essential part of UK radio, and we expect this to be the case well into the 2020s. Analogue services are valued by listeners and, in some parts of the country, analogue provides the only means of accessing broadcast radio. During Covid, radio has played an essential role in providing reliable and trustworthy communications to the public. With existing licences due to reach their final expiry dates from the end of 2021, and with Ofcom having no authority under existing legislation to extend them further, it was therefore important to clarify the position for analogue licence holders In December 2019, we issued a consultation to explore the options for reform: a "do nothing" option, which would involve allowing the licences to be re-advertised; or to legislate to allow the further renewal of licences for either five or eight years. Having carefully considered the responses, our conclusion was to retain the long-standing arrangements for analogue licence renewals that previous Governments have used to support the development of digital radio While there are some arguments in favour of opening analogue licences to competition, a full-scale re-advertisement process would, in our view, be disruptive and expensive, and the impacts would outweigh any potential benefits—particularly at a time when commercial radio faces severe disruption from Covid-19 and increased competition from online audio and smart speakers. We reflected carefully on the impacts of Covid-19 on stations’ advertising revenues, which have seen significant year-on-year reductions. In the light of this, we took further views on a longer, 10-year renewal and the responses to this—in particular from Radiocentre, the industry body for commercial radio—were positive. In addition, the extension is likely to take matters towards a natural endpoint for analogue broadcasting by the end of the decade I should make it clear, however, that the Government, while supporting the transition, have made no commitments about a future radio switchover. We will of course take account of the findings of the digital radio and audio review that I mentioned earlier, when it is due to report in the spring of 2021. However, I confirm to noble Lords that any switchover decision remains some way off. It would require a clear understanding by broadcasters and others, including groups representing listeners, as to whether it would be an appropriate course of action for radio’s future I want to touch quickly on the second provision within the order relating to small stations. The change will allow stations to satisfy the digital carriage condition by broadcasting on an appropriate small-scale multiplex. Following the passage of the Small-scale Radio Multiplex and Community Digital Radio Order 2019 and Ofcom’s recent commencement of the licensing process for small-scale DAB, it will soon be possible for smaller stations to broadcast over digital without needing to do so via local multiplexes, which cover larger, county-sized areas and come with the costs that such coverage implies. The current legislation refers only to local and national multiplexes. The provisions in this order will update the legislation to refer to small-scale multiplexes too. This is a change widely supported by smaller stations and the wider radio industry In summary, the order will continue the long-standing arrangement of allowing licence renewal for a commitment from commercial radio stations to DAB. In effect, it is the no-change option. It will provide stability and certainty to the industry during this tough time while continuing the progress of UK radio and audio towards a digital future. I beg to move.