National DAB radio multiplexes recommended for automatic renewal

The two national digital radio network licences should be renewed automatically under new legislation according to a report by the BEIS Committee.

The Business, Energy and Industrial Strategy Committee has agreed with the Government’s legislative change that would allow the UK’s National Radio Multiplex licences to be renewed automatically.

The Committee was asked to scrutinise the Government’s proposals for a Legislative Reform Order (LRO) that would allow both D1 and SDL to have their National Radio Multiplex Licences renewed.

If the LRO becomes law, it will enable Ofcom to renew the companies’ two licences for a further 12 years without running a competitive tender process. In the absence of the LRO, the two licences would have to be re-advertised and awarded through open competition, even if only the incumbent licensees bid.

In a report published today the Committee agreed with the Department for Digital, Culture, Media and Sport (DCMS) that automatically renewing the licences would save Ofcom a “burden” of “administrative inconvenience” and costs.

The cross-party Committee’s report also says that the two licence holders, Digital One Ltd and Sound Digital Ltd, would be saved from having to submit bids.

DCMS held a public consultation before launching these proposals, and found that the majority of responses from companies in the digital radio sector were in favour of the change.

Darren Jones MP, Chair of the BEIS Committee, said: “We welcome this proposal from DCMS as it will doubtless save digital radio stations, the licensees and Ofcom officials the burdensome process of going through a competitive tender process.”

The Committee agrees that the draft Order complies with several key tests, set out in the Regulatory Reform Act 2006, including:

  • Whether using the LRO will reduce administrative and cost burdens
  • That the aims of the LRO could not be achieved without legislative means
  • That the LRO will have an effect that is proportionate to the policy objective
  • It strikes a fair balance between the public interest and the interests of any person adversely affected by it

The report can be found here.

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