Ofcom is to extend the duration of advertised or re-advertised local commercial analogue radio licences from seven to 12 years.
The decision comes after a consultation earlier this year which received 12 replies. “After considering responses, Ofcom has decided that its policy will now be to grant licences for a period of 12 years,” the regulator says today.
The policy changed in 2010 in light of possible announcements on a DAB switchover but in December last year, the Government said that there was still more to do before the transition to digital could be completed.
Stations which broadcast on DAB gain automatic licence renewal, and part of the consultation considered the extent to which particular licence durations might affect the incentives of stations to broadcast on DAB. It was mentioned that some stations might withdraw their DAB services and opt for a re-advertisement rather than a renewal if they had a longer licence.
Ofcom said: “In the light of market developments since 2010, we concluded that 12 years is unlikely to affect the number and range of services available on DAB since new commercial incentives for stations to broadcast on DAB have meant that there is less need for the incentive mechanism.”
One individual argued that the current seven year licence duration is appropriate as it allows flexibility for future developments. Another respondent made a related argument, that licences should be shorter because the digital switchover should happen soon.
RadioCentre agreed with Ofcom’s assertion that concerns regarding the need to ensure flexibility in 2010 are now addressed and that we should now give less weight to this criterion when assessing the options.
One response highlighted the automatic renewal process offered to licensees who also provide a service on a relevant DAB multiplex. They argue that this automatic renewal had made operators “lazy” and ignores the basis on which they had won their licences originally, and that it would be good for these operators to have to justify their service and compete against other operators (analogue-only services). This respondent disagreed with 12 year licence durations.
In response to today’s news, William Rogers, operator of 17 analogue radio stations told RadioToday: “This is really positive news, particularly for those operators who manage smaller scale stations like ourselves. With many such licences unlikely to have a DAB future at all and many not being required to switch based upon their size in any event, it is crucial that they are able to invest in their future and continue to deliver a level of strong local engagement with their communities which shorter terms of licence duration threaten.
“This is one of the best pieces of news for smaller scale stations Ofcom has delivered in a while and it is to be strongly welcomed.”
RadioCentre has also welcomed the news. CEO Siobhan Kenny said: “I am delighted that Ofcom has agreed to move back to full 12 year licence terms. This change will be a real benefit to some of the smaller commercial stations on FM and AM, providing them with the prospect of five more years to build their businesses before they need to think about re-licensing.”