The Media Ownership (Local Radio and Appointed News Provider) Order 2003

Explanatory Note

(This note is not part of the Order)

This Order is made under section 282 of, and Schedule 14 to, the Communications Act 2003. Part 2 contains limits on the number of local sound broadcasting licences that a person may hold in the circumstances described in the Order. Part 3 contains limits on the number of local digital sound programme services that a person may provide. Part 4 modifies other legislation to give full effect to the restrictions in the Communications Act 2003 on who may provide news services for regional Channel 3 services, and to alter and clarify the restrictions in that Act on holding local radio multiplex licences.

Part 1 makes provision applicable to the rest of the Order. In particular, article 3 provides that a person connected with the actual holder of a licence, or with a person who actually provides a local digital sound programme service, is to be treated as if he, too, held that licence or provided that service. The question whether persons are “connected” for these purposes is to be answered by reference to the rules in Part 1 of Schedule 2 to the Broadcasting Act 1990 (c. 42). For example, two companies are “connected” if one controls the other (according to the definition of “control” in that Part of that Schedule) or if both are controlled by the same person.

Part 2 makes rules applying to local (analogue) sound broadcasting services. Article 5 provides for a restriction where a person holds at least two such local radio licences that overlap with each other, that is to say, where the potential audience of either service includes at least one half of the potential audience of the other: see article 4(2). The restriction applies when that person seeks to acquire a further licence to provide a service which also overlaps in that manner with his two other overlapping services. In those circumstances, points are attributed to each licence under which that or any other person provides a service in the area. The points are set out in the table in article 8. The person seeking to hold the further licence may not do so if, were he to do so, he would then hold more than 55 per cent. of the total points attributable to all services in the area, applying the points test to each of his overlapping licences in that area in turn. Generally, the test is applied according to the points situation that would prevail immediately after the person concerned acquired the licence, but where the area served by any person’s service changes while he is holding three overlapping licences, the test falls to be applied to his licences (but not those of any neighbouring licensee) again: see article 7.

Article 6 provides for a separate and stricter limit where two licences overlap with each other and the person seeking to acquire the further overlapping licence is a person who runs a local newspaper (or newspapers) having 50 per cent. or more of the market share in the area covered by the service provided under the licence, or who holds a regional Channel 3 licence covering that area. A points system similar to that explained above applies, including provision applying when the area served changes (see article 7), but in a case falling within article 6, the person seeking to acquire the further licence may not have more than 45 per cent. of the total points.

Article 9 prevents joint ownership in the same area of a local sound broadcasting licence, a regional Channel 3 licence and a local newspaper (or newspapers) having 50 per cent. or more of the market share in that area.

Part 3 makes rules determining the number of local digital sound programme services that may be provided under local digital sound programme licences. The rules are based on the number of such services that are provided in the market area of a particular local radio multiplex service, that is to say, in the area covered when considering the local radio multiplex service on which a person is seeking to provide a new service, taken with any other local radio multiplex service (or services) whose potential audience includes at least 5 per cent. of the potential audience of the first multiplex service: see article 10(3). Points are attributed to all local digital sound programme services provided (by any person) in a market area, and the person may not provide the further service if, were he to do so, he would be providing services worth more than 55 per cent. of the total points attributable to all those services. The test is applied according to the points situation that would prevail immediately after the person concerned began to provide the service (if he did so). It does not apply to persons providing four services or fewer in a more narrowly-defined area (see article 11(3)). The points vary depending on (amongst other things) the hours for which a service is broadcast: see articles 11(8) and 12.

Part 4 modifies other legislation. Article 13(1) is made under section 282 of the 2003 Act and amends section 281 of that Act. Section 281 specifies the persons who cannot be the appointed news provider for regional Channel 3 services: essentially, any person who could not hold a Channel 3 licence is debarred from being the news provider. The effect of the amendment is to debar a person who is the subject of a disqualification order made by a court on conviction of an offence under section 144 of the Broadcasting Act 1996 (c. 55) (providing false information in certain circumstances in connection with the rules preventing political bodies etc. from holding broadcasting licences). This was the intended effect of the amendment to section 145 of that Act of 1996 made by paragraph 140(3) of Schedule 15 to the 2003 Act, but that amendment erroneously relies for its effect upon a provision repealed elsewhere in that Act (section 32(12) of the Broadcasting Act 1990). Article 13(2) repeals that cross-reference.

Article 14 replaces references to the “coverage area” of a local radio multiplex service with references to the “protected area” for such a service. It defines that expression in the same way as it is defined in Part 3 of this Order. That article also defines the expression “potential audience” for the purposes of paragraph 8 of Part 2 of Schedule 14 to the 2003 Act (restriction on holding local radio multiplex licences), under powers provided for in paragraph 10 of that Part of that Schedule. That expression is currently undefined in that Part. Since this Order defines “potential audience” differently as between Part 2 and Part 3 of the Order, the purpose of this amendment is to add clarity to paragraph 8 of Schedule 14 by specifying the definition that is to apply there. Article 14(2) repeals paragraph 8(2) of that Schedule, since that defines “coverage area”, an expression that will no longer be used in that paragraph.