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Local Commercial Radio Licence Award: Kingston-upon-Hull

Awarded 6|07|06

The FM local commercial radio licence for Kingston-upon-Hull was awarded on 6 July 2006 to Planet Broadcasting Company Limited (KCFM 99.9).

Kingston-upon-Hull licence award decision

When the Hull licence was advertised last December, Ofcom said that, given the characteristics of the area, it felt unable to indicate whether any one of the four statutory licensing criteria (see under ‘Specific local licence award criteria’ below) would be likely to be regarded as of particular significance. However, it was stated that, in respect of criterion (d) – the extent to which there is evidence of local demand or support for a proposed service, Ofcom would be likely to attach greater weight to robust and meaningful evidence of demand as demonstrated by findings from research undertaken in the licence area and, if appropriate, detailed analysis of the existing market, than to evidence of local support as demonstrated by letters from potential listeners and/or advertisers.

Ofcom also noted that this guidance is subject to discretion, and that it will always consider each of the four statutory criteria when making a licence award.

In considering the applications in relation to Section 105(a), Ofcom's Radio Licensing Committee (RLC) welcomed the fact that KCFM’s board directors offer a mix of business acumen and relevant commercial radio experience. The committee also took account of Hull’s distinct local character and in this context noted KCFM’s strong links to the local community. While the committee acknowledged that KCFM’s financial forecasts are ambitious when compared with the performance of existing services of a similar size, it also noted that the group’s funding arrangements have been independently verified, that the presence of SMC Ltd. (the management company behind the local sports stadium) as the single largest shareholder gives additional security and, that the business plan includes a reasonable funding level. In addition, the members of the RLC took the view that the high financial forecasts were appropriately reflected by the proposed investment in both sales staff and marketing to launch the station.

With regard to sections 105 (b) and (c), the RLC made specific note of KCFM’s extensive commitment to local speech. This commitment includes a 30% minimum on daytime speech, a wide range of non-news features (including distinct elements such as a daily advice phone-in and regular keep fit spots) and the promise of live local news bulletins 24 hours-a-day. The committee considered that such provision would clearly enable KCFM to broaden choice in relation to the existing commercial services, and concluded that, in combination with the broad mix of music, it would also cater to local tastes and interests.

With regard to Section 105(d), the RLC observed that KCFM had carried out a full range of research which showed general support for its proposals and particularly for the group’s local speech commitments. The committee also commented on the relatively strong demand shown for sports coverage in this area, which KCFM had acknowledged within its Format, most notably in the commitment to a weekday evening football phone-in during the season.

Finally, the RLC considered that, in relation to Section 314 of the Communications Act 2003, KCFM demonstrated evidence of demand for the amount of local material and proportion of locally-made programming it proposed in its application. As noted above, the station’s proposed Format promises live local news 24 hours-a-day (with bulletins of at least three minutes duration between 0600 and 2200), as well as a wide range of locally-focussed speech features.

The following pages set out the statutory requirements relating to radio licensing, and details of the licensing process. Further information about these, and detailed information relating to the applications for the Hull licence, can be found at:

http://www.ofcom.org.uk/radio/ifi/rbl/car/

Statutory requirements relating to radio licensing

In carrying out all of its functions, Ofcom is required to have regard to the general duties set out in Section 3 of the Communications Act 2003. In addition, under section 85(2)(b) of the Broadcasting Act 1990, it is the duty of Ofcom to do all that it can to secure the provision within the UK of a range and diversity of local radio services.

'Localness'

In carrying out its functions in relation to local commercial radio services specifically, Ofcom is required (under section 314 of the Communications Act 2003) to act in the manner that it considers is best calculated to secure:

  • that programmes consisting of or including local material are included in such services but, in the case of each such service, only if and to the extent (if any) that Ofcom considers appropriate in that case; and
  • that, where such programmes are included in such a service, what appears to Ofcom to be a suitable proportion of them consists of locally-made programmes.

For the purposes of the licensing process, Ofcom does not consider it appropriate to prescribe an amount of local material or a proportion of locally-made programming that new services should contain, as such matters may well vary greatly between different types of service. Rather, it is for applicants to set out in their application the amount of local material and the proportion of locally-made programming they propose to provide, supported, as appropriate, by evidence of demand or support for such proposals. Ofcom will then consider on the basis of the application whether the amount of local material included is appropriate, and whether the proportion of locally-made programming is suitable, for that particular service proposal.

Specific local licence award criteria

In considering the applications it receives for local commercial radio licences, Ofcom is required to have regard to each of the statutory criteria set out in section 105 of the Broadcasting Act 1990. These are as follows:

  1. the ability of each of the applicants for the licence to maintain, throughout the period for which the licence would be in force, the service which he proposes to provide;
  2. the extent to which any such proposed service would cater for the tastes and interests of persons living in the area or locality for which the service would be provided, and, where it is proposed to cater for any particular tastes and interests of such persons, the extent to which the service would cater for those tastes and interests;
  3. the extent to which any such proposed service would broaden the range of programmes available by way of local services to persons living in the area or locality for which it would be provided, and, in particular, the extent to which the service would cater for tastes and interests different from those already catered for by local services provided for that area or locality; and
  4. the extent to which there is evidence that, amongst persons living in that area or locality, there is a demand for, or support for, the provision of the proposed service.

The legislation does not rate these requirements in order of priority, but it may be that Ofcom will regard one or more of the criteria as being particularly important in view of the characteristics of the licence to be awarded and the applications for it.

Process for assessment of applications

The Kingston-upon-Hull licence was advertised on 7 December 2005. By the closing-date of 8 March 2006, seven applications were received, as follows:

HLR (Humberside Local Radio Limited)
King FM (Radio Hull Limited)
KCFM 99.9 (Planet Broadcasting Company Limited)
Soul City (Broadcast North Limited)
Trinity FM Limited
White Rose Radio Limited
Wyke FM Limited

The membership of Ofcom's Radio Licensing Committee (RLC) for this licence award was as follows:

Ian Hargreaves, Ofcom Board member (Chair)
Tim Suter, Partner, Content and Standards (Deputy Chair)
Philip Graf CBE, Chairman of the Content Board
Peter Bury, Director of Strategic Resources
Peter Davies, Director of Radio and Multimedia
Neil Stock, Head of Radio Planning & Licensing
Martin Campbell, Head of Radio Content Team

The applications were circulated among all members of the RLC as well as among relevant Ofcom colleagues. Copies of the non-confidential sections of the applications were made available for public scrutiny on the Ofcom website, and public comment on the local radio needs of listeners in the area, and the type of programme service required, was invited both at the time of the licence advertisement and on the day after the applications were received. The Radio Licensing Committee took all replies into account when reaching its decision.

The Radio Licensing Committee had an initial discussion of the applications at its meeting on 11 May 2006. This comprised an initial presentation by a member of Ofcom's Radio Planning & Licensing team, summarising the proposals put forward by each applicant as they relate to the statutory criteria, followed by an opportunity for the RLC members to highlight any questions of clarification and/or amplification they wished to be put to the applicants.

Prior to this meeting, each applicant was invited to respond, within a two-week period, to written questions of clarification and/or amplification on aspects of their proposals. The non-confidential questions and responses were subsequently made available for public scrutiny on the Ofcom website.

In line with Ofcom's published procedures, each application was awarded a score (of between 0 and 10) for each of the four statutory criteria contained in section 105 of the Broadcasting Act 1990. The RLC was presented with a paper which summarised the issues of relevance for each application under each of the statutory criteria; this included a summary of the scores. The scores provided an indicative picture of the perceived strengths and weaknesses of each application, and were used for guidance only. The information included in the paper was drawn both from the applications and the subsequent responses to questions of clarification and/or amplification.

Points for future applicants

  1. It was noted by the RLC that some applicants (both for this and other licences) are offering relatively little justification for the financial assumptions upon which their proposals are based. Applicants are reminded that such explanatory material is a key aspect of any business plan that Ofcom will assess pursuant to section 105(a).
  2. Applicants for licences in other areas should note that this licence award was made based on the particular characteristics of the Hull licence area, and the applications which were submitted. Each licence award will be made on an individual basis, with regard to the factors which, in the view of Ofcom, are particularly relevant to that case.

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