Digital Audio Broadcasting in the UK is set to expand following an agreement between the Department for Culture, Media and Sport (DCMS), the BBC, broadcast infrastructure provider Arqiva, and the Multiplex Operators jointly to fund the expansion costs of extending the local DAB network towards commercial ILR FM equivalence. Dates have also been set out for implementation of legislation relating to analogue switch-off. UK comms regulator Ofcom is playing a role in the process.

The Framework Agreement supersedes the MoU agreed between the parties on 11 July 2012. The programme of work to build out the local DAB network is scheduled to begin in March 2015 and, when completed, will extend local DAB coverage from around 72 per cent of homes at present to circa 90 per cent of UK households by late 2016.

The agreement provides for the establishment of a grant scheme by which DCMS will provide funding to the Multiplex Operators to support this objective, and the commitment of the BBC to also provide funding via expansion agreements with the Multiplex Operators.

Arqiva and the multiplex operators commit to build designated ‘Step 1’ sites by 30th September 2016 and to complete the ‘Step 2’ sites (other than the Lincolnshire Multiplex) no later than 12 months before any date nominated by DCMS as the nominated analogue switch-off date.

DCMS commits to establishing a grant scheme to support the Expansion Plan by distributing the funding confirmed by DCMS on 16 December.

DCMS commits to providing funding to Multiplex Operators up to a maximum total of £7.75 million exclusive of VAT from the date of this Agreement and March 2017 towards the costs incurred by them pursuant to their agreements with Arqiva to complete the Expansion Plan. The DCMS funding does not include payments towards the mitigation of adjacent channel interference.

If no switchover decision has been made by 5th April 2017, the Government commits to give due consideration to the provision of funding to cover additional costs of not pursuing switchover at that time.

DCMS commit to introduce legislation into Parliament by March 2015 to enable the renewal of multiplex licences to 2030 and to use reasonable endeavours to ensure the required legislation enters into force.

The BBC will make the following funding contributions to the cost of the works required to implement the Expansion Plan: Until 31 December 2030, funding one third of all incremental costs reasonably and directly incurred by Multiplex Operators and which are payable by the Multiplex Operators to Arqiva (before the effect of the DCMS funding ris taken into account) and which arise directly as a result of the implementation of the Expansion Plan. This is subject to a cap of £7million in the period up to March 2017.

Among the multiplex operator commitments, Now Digital and MuxCo commit to ensuring that unlaunched multiplexes are launched in line with the requirements set out by Ofcom in correspondence.

Each Multiplex Operator commits to:

• requesting variations to their multiplex licences which are required to fulfil the Expansion Plan;
• discussing and agreeing in good faith the expansion agreements with the BBC reasonably required to give effect to the commitments set out in this Framework Agreement;
• working closely with the BBC throughout discussions with Arqiva and provide the BBC with any and all information reasonably required by the BBC concerning the amounts payable for the completion of the Expansion Plan;
• comply with the process set in order to access DCMS grant funding;
• complying with the change control procedure drawn up by Ofcom to make changes to the Expansion Plan or the Step 2 sites in making any necessary changes to the Expansion Plan;
• within six weeks of the signature of the Framework Agreement (or such other date agreed by the Panel), write to the Panel setting out details of the cost of the Expansion Plan negotiated with Arqiva with details of capital requirements and the balance of costs for all relevant sites in a format agreed in advance by the Panel.

Arqiva commits to draw up and maintain an Implementation Plan, updating that Implementation Plan to reflect site and technical changes proposed by Multiplex Operators and agreed by Ofcom. Arqiva commits to circulate updates of the Implementation Plan to the Parties as changes are made. Arqiva commits to bear the costs incurred in respect of the frequency changes in the Expansion Plan at those sites, in addition to sites which Ofcom has identified as only requiring a frequency change.

Such costs as referred to above are limited to those purely in respect of the frequency change and not those with regard to an intentional increase in coverage (for example by increasing antenna height, changing aerial patterns or increases in power to increase coverage).

Arqiva commits to funding the costs of equipment to support service linking at all sites where Arqiva is also contracted to provide multiplexing services.

Arqiva commits to ensuring that the work is completed by 30th September 2016 (subject to any changes to the Expansion Plan agreed by the Joint Planning for Radio Group (JPRG), and will ensure that the project is managed as efficiently as possible. This may include undertaking work on similar projects at the same time to increase efficiency.

Arqiva commits to contract with Multiplex Operators to extend local DAB coverage under the Expansion Plan on the basis of information provided by Arqiva to Multiplex Operators in an open and transparent manner and will be mindful, in all contractual discussions with the Multiplex Operators of the requirements for Multiplex Operators to ensure value for money for funding under the Framework Agreement.

Arqiva commits to provide Multiplex Operators (and where relevant, the BBC) with all such reasonable financial, commercial and technical information as is reasonably required by the Panel or by the BBC to enable the BBC to have sufficient transparency in relation to the build out to ensure that the funds that it is providing are being used solely for the purposes of the Expansion Plan and in accordance with the terms of the Framework Agreement.

Ofcom will chair the JPRG and will provide technical advice to the Panel. Ofcom will consider applications for variations of multiplex licences made by the Multiplex Operators in accordance with section 54A of the Broadcasting Act 1996.

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