Commentary on the UK government announcement of a review of the regulation of local content broadcast by local commercial radio stations, written by Grant Goddard in February 2009 for Grant Godard: Radio Blog.

1. 'LOCALNESS' OF LOCAL
COMMERCIAL RADIO STATIONS:
'PLEASE, SIR, CAN I HAVE SOME
LESS?'
by
GRANT GODDARD
www.grantgoddard.co.uk
February 2009

2. The government’s announcement that an independent review group will look at the ‘localness’
issues relating to content on commercial radio could re-ignite a war of words between the
stakeholders that a year ago ended in a tense ceasefire. Last time, hostilities between the
large radio owners and Ofcom became elevated to such an extent that the regulator’s chief
executive Ed Richards even used the Annual Ofcom Lecture to chastise the commercial radio
industry for its persistent lobbying to loosen its ‘localness’ obligations:
“Some [radio owners] have called for a huge relaxation in relation to localness, some
in the industry even call for a complete removal of all regulation. They believe that
localness is either no longer valued or that its value is significantly outweighed by its
cost. The problem is that the evidence is to the contrary. What our research tells us is
that people continue to want to hear local programming. …. But we are not convinced
that the market alone will deliver this if left to its own devices. We recognise very
clearly the significant economic challenges faced by the radio sector, but our
forthcoming proposals will not involve eliminating the obligation to deliver local
programming or its reduction to a negligible level.”
Ofcom subsequently published its policy statement on localness in February 2008 and
although, on the surface, it might have looked as if a ceasefire had broken out between the
two sides, behind the scenes the industry’s lobbying for further reductions of its ‘localness’
obligations continued regardless. Ofcom had estimated that its policy changes would save the
radio sector £9.4m to £11.7m per annum from a cost base of around £620m. For the radio
industry, these potential savings were simply not enough. Andrew Harrison, chief executive of
RadioCentre, argued that “the heavy burden of the existing localness regulation and legislation
[..] is holding back current profitability and future investment in the sector”. By December 2008,
industry lobbying had succeeded in persuading the Digital Radio Working Group to
recommend in its Final Report that:
“commercial radio must be given greater freedom to shape its digital future to provide
a sustainable future for local radio in a digital world through a relaxation of analogue
localness requirements………”
and to comment that:
“…. a model which focuses so heavily on where content is made may not be the best
way to deliver either what listeners will most want in the future or allow the industry
space to grow. We therefore recommend that the commercial radio sector, Ofcom and
the government should look closely at the current localness regime in the coming
months……..”
What proved interesting about last week’s government announcement of the independent
review into ‘localness’ was that it contained no mention of Ofcom whatsoever. Even though the
press release noted that the review would examine “to what extent are the current
requirements for a pre-determined number of hours of local content, and the locality in which
content is produced, appropriate and sustainable”, as implemented by Ofcom, it did not
mention the regulator by name. This omission is downright weird. The Communications Act
2003 states clearly that:
“It shall be the duty of OFCOM to carry out their functions in relation to local sound
broadcasting services in the manner that they consider is best calculated to secure: (a)
that programmes consisting of or including local material are included in such services
but, in the case of each service, only if and to the extent (if any) that OFCOM consider
appropriate in that case; and (b) 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.”
Furthermore, the Act states that “OFCOM must: (a) draw up guidance….” and “OFCOM may
revise the guidance from time to time”, but it “must consult” licence holders and stakeholders
beforehand. The legislation is crystal clear as to where the responsibility resides. What we are
seeing in the government announcement is an intervention at a higher level as a result of
'Localness' Of Local Commercial Radio Stations: 'Please, Sir, Can I Have Some Less?' page 2
©2009 Grant Goddard

3. perceived dissatisfaction with the way that Ofcom has implemented its responsibilities on this
“particularly contentious” issue, as Ed Richards described it
Ofcom’s 2007 consultation on ‘localness’ in radio had elicited 43 responses and the regulator
“noted the calls from the commercial radio industry for a reduction of locally-made
programming….” Ofcom stated determinedly: “We believe that our proposed guidelines
already represent a substantial deregulation of locally-made programming in many cases”.
However, it looks as if further lobbying has undermined the Ofcom position, and the regulator
is now being sidelined by direct government action on this issue, which could lead to new
legislation or to new implementation of existing legislation.
So what precisely does the commercial radio industry want changed by Lord Carter in Ofcom’s
localness requirements?
 local commercial stations required to broadcast no more than 4 hours a day of locally
made programming
 regional commercial stations not required to broadcast locally made programming
 local news broadcasts on local stations can be produced in centralised newsrooms
 stations serving populations of less than 750,000 (i.e.: two thirds of the UK’s stations)
permitted to locate their studios outside the area they serve
 the 4 hours a day of ‘local’ programming can be simulcast across co-located stations and
still count as locally made programming.
And what concessions would the commercial radio industry offer Lord Carter in return for its
newly, co-located, networked content, ‘local’ stations?
 news bulletins (not all local) 13 hours a day on local stations
 news bulletins 24 hours a day (not all regional) on regional stations (13 hours a day on
specialist music stations)
 extended news bulletins (of unspecified length)
 a commitment to safeguarding stations’ remaining local content (weather, traffic, what’s on,
charity appeals, community information)
However, these demands and concessions position the ‘localness’ issue strictly in the context
of content regulation. In fact, there is a much bigger game being played out, which concerns
the further investment required in the DAB platform to try and make it a success with
consumers. Essentially, the commercial radio industry is trying to put a gun to Lord Carter’s
head and is demanding: ‘we won’t invest any more money in DAB to make it work, unless you
stop Ofcom making us do local things we don’t want to do’.
The initial response to the commercial radio lobby was likely to be: ‘you acquired all these local
radio stations, knowing that they had localness obligations. If you wanted a national radio
station, why didn’t you buy one of those instead?’ It does seem a bit like Stagecoach begging
the government to transform its local bus routes into a national coach service. However, Lord
Carter is trying to grapple with the issues and forge a compromise whilst still insisting that
“government can not, nor should it, be the main driving force for digital radio”.
The biggest danger here is that the ‘localness’ issue becomes a mere sideshow to the much
more politically and commercially significant decision over the future of the DAB platform. As
such, ‘localness’ risks becoming a mere pawn in a complex set of negotiations that are
essentially designed to maintain the balance sheet valuations of the largest radio groups which
have already made significant investments over a decade in costly DAB infrastructure.
Sadly, this is not the first time that the ‘localness’ issue has been invoked merely as a quid pro
quo within a much bigger game. In the original Bill that became the Communications Act 2003,
there was no ‘localness’ clause for local radio, just as there never had been in previous
broadcast legislation. It was inserted at the last minute as what the then Minister for
Broadcasting, Dr. Kim Howells MP, admitted was “the quid pro quo for greater liberalisation in
the radio market”, allowing more concentrated ownership of local radio than the Bill had
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©2009 Grant Goddard

4. 'Localness' Of Local Commercial Radio Stations: 'Please, Sir, Can I Have Some Less?' page 4
©2009 Grant Goddard
originally proposed. In the ensuing House of Commons debate, Michael Fabricant MP
successfully stoked the flames of fear:
“What if Clear Channel – a United States organisation for which I have a considerable
respect, but which the [UK commercial radio] industry is rather concerned about –
were to acquire a number of radio stations and found that it could pull in large
audiences, based in the US, and not be all that local? Its presenters could be based in
New York, for example, and it could put in pre-recorded local identifications.
Everything could be done on a PC-based system. The stations would sound like local
radio, even though they were not; and, because they had a good playlist, they might
pull in a big audience. Would we not want back-stop powers in such a case?”
Six years later, neither Clear Channel nor its competitors have bothered to enter the UK radio
market. Instead of the then touted prospect of US-financed global radio, we now have Irish-
financed Global Radio wanting to run as much of its UK local radio empire as possible from
Leicester Square. At the end of the day, for the listener, does the distinction matter whether a
local radio station’s studio is in New York or New Bond Street? If I were a listener in NorthEast
England, when I choose to listen to local radio, rather than national radio, if it does not fulfil my
desire for ‘local’, then it offers me zero utility. If I am digging my car out of a three-foot
snowdrift and the jolly ‘local’ radio presenter does not mention the inclement weather from her
faraway studio, it simply isn’t local radio.
Surely, a ‘localness’ policy for radio should put the citizen/consumer/listener at the heart of its
doctrine, something which Ofcom policies to date have failed to do. But neither does the
commercial radio industry come out of this smelling of roses. I have yet to see one UK case
study backed with evidential data which demonstrates that a decrease in local content on a
local radio station has resulted in audience growth. Reduced costs? Yes. Improved profit
margins? Yes. But local commercial radio stations have always been gifted scarce analogue
radio spectrum for free, in return for their public service content commitments. A local radio
station that is not trying to maximise its audience but, instead, aims to maximise profits by
reducing costs, cutting local content and knowing full well that its audience will inevitably
decline, would seem to be misusing valuable spectrum.
It remains to be seen whether this latest initiative to review radio’s localness requirements will
result in new regulation that finally puts the listener at the centre of its policies, rather than
simply responding to the needs of either the box-ticking regulator or the de-localising, large
radio groups.
On a personal note, over several years I researched the issue of ‘localness’ and ‘localism’ in
local radio, and I wrote an unpublished paper a year ago that examined the issues and
suggested a way forward that would reinstate the local radio listener at the heart of localness
regulatory policy. If the laws or regulatory regime do have to be changed, my only hope is that
they are changed for the better, and not for the worse.
[First published by Grant Goddard: Radio Blog as 'Localness: Please, Sir, Can I Have Some Less?', 17 February
2009.]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk