Ofcom has today published a consultation on the methodology for reviewing the financial terms of the three national analogue commercial radio licences.
These licences, held by Classic FM, TalkSport and Absolute Radio are due to expire in 2018 and the consultation sets out the methodology that Ofcom proposes during the renewal process. Under the Broadcasting Act 1990 all three licences qualify for a further five year renewal, which means each licensee can apply to extend their licence rather than having to re-apply in an open competition.
The original licences were awarded by an auction but the renewal process means there won’t be any cash bids so Ofcom is required to set new financial terms for each licence. They’re proposing that the methodology used in 2010 is still broadly appropriate and will enable them to set fair and reasonable financial terms within the context of the current market environment.
Ofcom will take account of various information sources to reflect any uncertainties when valuing the licences, but also wants views through this consultation to find out if there are alternative ways to deal with the uncertainties. They want the views of stakeholders by 24th June and intend to issue a statement towards the end of July.