Radio lobby warns on digital switchover

Dab_radioA group of UK radio station owners representing 80 commercial radio stations in the UK has published a strategy paper warning of the risks of a government-enforced digital radio switchover for UK listeners.

In December 2013, the Minister for Culture, Communications and Creative Industries, Ed Vaizey is expected to announce Government’s plans and timetable for a switchover from FM and AM to DAB digital radio. According to the group, which comprises Anglian Radio, Celador Entertainment, CN Radio, Media Sound Holdings, Q Radio Network, Quidem, UKRD and UTV Media together with independent stations Brighton’s Juice 107.2, Radio Jackie, Radio Plymouth and SIBC, unlike TV switchover, radio switchover does not form part of an internationally coordinated programme and will not unlock a taxpayer dividend from the sale of analogue spectrum.

The group believes that the policy has the potential for disaster, suggesting that evidence shows that listeners are well-served by existing platform choices, whilst local commercial radio stations are severely disadvantaged by the switchover plans. “Switchover poses a serious risk of listeners losing access to radio unless they spend several hundred pounds per household on new digital receivers. The cost of access to the digital radio platform is prohibitive for many smaller stations, and switchover may not be appropriate or even feasible for many broadcasters. Significant new public funding will be required to expand local DAB coverage and even then as many as 100 important local commercial radio stations will be left stranded on FM or forced onto a digital platform which is unaffordable or unsuitable for them,” it warns.

The lobby says that each of its owning groups is committed to technological progress for radio in the UK with increased quality, coverage and choice, as this can only benefit listeners and the radio industry. “However we believe that consumers should determine whether and when there is a future switchover, and that policies should be devised to protect valued local commercial radio stations,” it says.

It says there is “compelling evidence” that enforced switchover will cause extensive damage to overall radio listening and accessibility to services, citing factors such as affordability and access issues for consumers. It notes that the price of DAB radio sets has not decreased in the last five years and a digital portable set is three times more expensive than the average price of a portable analogue radio (£17 in 20115). As a result the average household cost of converting all sets include in-car to DAB could be in the region of £300 – £500 per household.

It further notes that there is no taxpayer dividend’ from vacated AM and FM spectrum, therefore there is so no policy rationale for intervention. “The technical characteristics of both AM and FM frequencies make them ideally suited for radio broadcasting, but ill-suited for other technologies. Without any great demand for this spectrum, there is no prospect of revenue for the Treasury from its sale to offset the additional costs,” it says.

According to the radio stations,in the absence of any taxpayer dividend, it is hard to see what public interest is served by a government-mandated switchover. The consumer benefits of DAB can be realised without switchover – indeed, many radio listeners already enjoy them. The task of persuading more consumers to adopt digital radio would seem to be properly undertaken by market participants – i.e. broadcasters and the consumer electronics industry – rather than through government intervention, it says.

The group notes that a more comprehensive government follow-up study on the switchover issue has been promised following criticism by the House of Lords Communications Committee in 2010, but it understands that there are no plans to publish this prior to a switchover announcement and that the government’s workings will not be subject to any independent scrutiny.

According to the group, the solution is to focus on the interests of listeners and local commercial radio stations

“Many of our groups have significant digital radio investments; and we wish to see technological progress for radio listeners in the UK with increased quality, coverage and choice. We support the ability for broadcasters to develop their digital radio offerings. However, decisions about technology and platforms are business choices and, in the absence of any over-riding public interest objective, should be made by business operators, not mandated by government. Creating an environment in which broadcasters are enabled to decide for themselves whether and when to switch off their analogue transmissions, based on their knowledge of their own markets, would seem to be a sensible and logical policy approach,” it says.

Its preference is for government to choose not to proceed with an enforced switchover to DAB but instead to adopt a platform-neutral, market-led philosophy.

Accordingly, it recommends:

1. Any transition to DAB should take place carefully, gradually and be consumer led.

  • Previous successful switches – such as to FM – were gradual and took place over a far longer timescale than is likely to be proposed now.
  • The UK is the only EU country considering a DAB switchover and there are also no similar plans in other major radio markets with digital broadcast networks such as the USA and Australia.
  • An overly hasty, one-size-fits-all approach, enforced by government on the whole industry, risks leaving many consumers behind, and jeopardising the future of many smaller local radio stations. A more considered progression will allow the broadcasting market and consumers to dictate where the next commercial and government investment should be.

2. Broadcasters should be enabled to decide for themselves whether, and when, they wish to switch over their stations entirely to digital.

  • Ofcom should be asked to create a regulatory environment in which broadcasters face no impediment to ceasing analogue transmission if they choose. Broadcasters should be able to decide on a market-by-market or station-by-station basis whether and how to make the transition to digital.
  • In all other respects, Ofcom should be asked to adopt a platform-neutral position, recognising that digital switchover may not be appropriate or feasible for all stations. Broadcasters wishing to withdraw a station from DAB should be able to do so without the threat that the associated local analogue frequency will be withdrawn by Ofcom and not readvertised.
  • To protect stations remaining on FM, we advocate a combined station list as mandatory on all sets: complementary programme listings for FM and DAB so that all local and national stations have equal prominence to listeners.

3. If the government were minded to proceed with a mandated switchover plan, it should provide a clear policy rationale, and set out pre-conditions for switchover that protect listeners:

  • Without a taxpayer dividend from the sale of analogue spectrum, it is unclear what policy objectives are served by a government-mandated switchover. Any switchover proposal should clearly and rationally express what these objectives are.
  • Strict criteria for switchover should be set out to ensure as few listeners as possible are disenfranchised by any switchover plan. For example, AM / FM listening, both in general and in-car, should have reduced to 10 per cent of total radio listening; DAB coverage should be equivalent to analogue coverage for all BBC and commercial stations.
  • Any switchover plan should clarify what will happen to those stations, BBC and commercial, for which migration to digital is either technically or financially unfeasible. It should be made clear how the interests of listeners in those localities are being protected.

4. For a considered and independent Cost Benefit Analysis (CBA) of switchover viability and publication of the government’s previous assessments

  • Given the significant consumer, licence fee and industry costs associated with switchover, publication of an objective and comprehensive CBA for external scrutiny is an essential prerequisite for any switchover decision.

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