Committee Reports > List of Committees > Joint > 2003 > Committee on Communications, Marine and Natural Resources > Report No. 01 - Report on Local Radio

Houses of the Oireachtas

Tithe an Oireachtas

An Comhchoiste um Chumarsáid, Muir agus Acmhainní Nádúrtha

Joint Committee on Communications, Marine and Natural Resources

Report No: 5

Report On:
Raidió Áitiúil: An Próiseas Ceadúnaithe - athbhreithniú ar an gcóras ceadúnaithe de réir na taithí atá ag Stáisiúin Raidió Áitiúil in Éirinn

Local Radio: The Licencing Process - a Review of the licencing system as experienced by Local Radio Stations in Ireland

May 2003

Joint Committee on Communications, Marine and Natural Resources

Report No. 5

LOCAL RADIO: THE LICENCING PROCESS - A REVIEW OF THE LICENSING SYSTEM AS EXPERIENCED BY LOCAL RADIO STATIONS IN IRELAND.

CONTENTS

Joint Committee on Communications, Marine and Natural Resources

Report No. 5

LOCAL RADIO: THE LICENCING PROCESS - A REVIEW OF THE LICENSING SYSTEM AS EXPERIENCED BY LOCAL RADIO STATIONS IN IRELAND.

1. Introduction

1.1 Local radio is thriving in Ireland By 2001, thirteen years after the passing of the original Broadcasting Act, 22 commercial local radio stations were in operation in Ireland, demonstrating the success of local radio, its popularity reflected in publicly audited listenership figures. Simultaneously, community stations and special interest stations have been developing their own niche market.

1.2 The role of the Broadcasting Commission of Ireland as the regulator for local radio, in particular in light of amendments to the Broadcasting Act and a constantly changing broadcasting environment, has been the subject of much comment.

1.3 The power and actions of the Broadcasting Commission of Ireland in the licensing of local radio is a key element in the operation of local radio in Ireland and in that regard, the Joint Oireachtas Committee on Communications, Marine and Natural Resources resolved to draw up a report on the licensing of local radio stations by the Broadcasting Commission of Ireland, specifically examining the response of local radio stations themselves to the most recent round of re-licensing.

1.4 The Committee resolved that the report would

• Incorporate a review of the views of local radio stations on their experience of the licensing system.
• Examine the licensing system as currently constituted, to enquire if it fulfils the spirit of the legislation establishing local radio;
• Look at cross media ownership as it pertains to local radio
• Make recommendations for legislative change, if necessary.

1.5 To assist the Committee it was agreed to appoint Senator Kathleen O’Meara as Rapporteur to prepare a report for the consideration of the Committee. I wish on behalf of the Committee to thank Senator O’Meara for the very comprehensive research that was undertaken and for setting out the issues at play. This Report of the Committee makes very substantive use of Senator O’Meara’s rapporteur’s report and is reflective of the body of work and research, which both the Senator and her research assistant Mr. Ronan Callanan did on behalf of the Committee.

1.6 On the 6^th May 2003 Senator O’Meara presented her Report, which was considered by the Joint Committee at its meeting of the 6^th May. The Committee agreed, to incorporate the views of the members and at the Joint Committee meeting of the 27^th May the Committee agreed that the Report be laid before the Houses of the Oireachtas.

Noel O’Flynn TD

Chairman

May, 2003.

Joint Committee on Communications, Marine and Natural Resources

Report No. 5

LOCAL RADIO: THE LICENCING PROCESS - A REVIEW OF THE LICENSING SYSTEM AS EXPERIENCED BY LOCAL RADIO STATIONS IN IRELAND.

3. Acknowledgements

3.1 The Committee wish to acknowledge and thank Senator Kathleen O’Meara who acted as Rapporteur for the Committee. Senator O’Meara’s Report forms a very substantial portion of this Report.

3.2 The Committee wish to thank and acknowledge the professionalism and co-operation of Mr. Ronan Callanan, who acted as research assistant to Senator O’Meara, and to thank Mrs. Philo Freeman and Ms. Marian Gaffney, for their technical assistance and support to both Senator O’Meara and Mr. Callanan, in compilation of Senator O’Meara’s Rapporteur’s Report to the Committee.

Joint Committee on Communications, Marine and Natural Resources

Report No. 5

LOCAL RADIO: THE LICENCING PROCESS - A REVIEW OF THE LICENSING SYSTEM AS EXPERIENCED BY LOCAL RADIO STATIONS IN IRELAND.

4. Report of Rapporteur

The Committee appointed Senator Kathleen O’Meara as Rapporteur to prepare a Report for the Joint Committee. Senator O’Meara sought and secured the agreement of Mr. Ronan Callanan¹ to conduct research and critically analyse the historical and legislative background to the development of local radio in Ireland.

4.1 Research Methodology

4.1.1 A letter (see Appendix III) was sent by ordinary mail and e-mail to all licensed radio stations listed (see Appendix IV) in the last Annual Report of the Broadcasting Commission of Ireland asking them to set out their views on the licensing process conducted by the Broadcasting Commission of Ireland, their experience and views of it.

4.1.2 A second letter (see Appendix V) and e-mail was sent on March 10^th 2003.

4.1.3 The response rate was 35%, with 14 stations giving detailed responses. Of those responses, 64% declared themselves satisfied with the licensing process and their relationship with the Broadcasting Commission.

4.1.4 An analysis of the responses revealed a range of issues and concerns being expressed by operators, with some common concerns emerging.

4.1.5 A series of interviews was conducted with a range of stations to further explore these common concerns and examine in greater depth the issues arising. Some of those interviewed had expressed general satisfaction with the process of licensing, and a number were deeply dissatisfied.

4.2 Analysis of Research

4.2.1 The need for regulation of the market and for an independent arbiter of franchises is widely accepted in the industry. The manner in which the Broadcasting Commission of Ireland carries out this role commands the confidence of the majority of the stations. However, there are a number of exceptions and the issues raised by the industry and their experience of the decision making process by the Broadcasting Commission of Ireland are important in terms of public policy transparency and accountable decision making by a public body.

4.2.2 It is worth noting that in recent years there has been a significant change in the relationship between the Broadcasting Commission of Ireland and franchise holders. A number of operators noted that whereas, up to the mid 1990’s, this relationship was marked by a confrontational relationship between the regulator and the franchise holder, this has now changed to a situation where there is a now a high level of consultation between the Commission and franchise holders. This is widely welcomed.

4.2.3 At the same time, concerns have emerged about the transparency of the decision making process in awarding a franchise, the level of accountability for that decision, and the absence of an appeal mechanism, in particular given the power of the Broadcasting Commission of Ireland to withdraw a franchise and close down a franchisee.

4.2.4 Even among those who were successful in the last licensing round, questions have been raised about the need for the Broadcasting Commission of Ireland to be able to fully explain their reasons for arriving at a particular decision. One operator put it thus:
“..the Commission’s analysis of the applications is deficient. In particular it does not commission independent research to enable it examine the veracity of the key data and assumptions in the applications. Accordingly it has no pre-defined conclusions or yardstick to use in evaluation of applications. We identified a number of contradictions and unresolved issues in the … process where subsequently the Commission were unable to provide us with any satisfactory explanations…. The inability of the Commission to adequately explain and deal with those inconsistencies seriously impinges on the credibility of the process”.
In that regard, the use of professional advice and an independent examination of applications, in particular to verify projected audience figures for instance, was recommended, and that this information be available to those who query the reason for a decision on a franchise.

4.2.5 The issue of an appeal mechanism has arisen as a core one, in particular for those who have lost out in the last licensing round. They are unanimous in calling for a mechanism other than the courts being available to those whose franchise is being withdrawn or fundamentally altered by a decision of the Commission, as one applicant put it:
“Because the BCI is not directly answerable to the Minister for Communications, there has to be some method of holding them accountable for their decisions, other than having to resort to the courts, who can only deal with legal points. The cost and risk of going to court is prohibitive, and wouldn’t necessarily address the questions we would want to have answered”.
It is notable however that this mechanism was not included in the most recent legislation and was not lobbied for by AIRS, then the main voice of the industry.

4.2.6 A number of issues emerged regarding the licensing process itself, the main issue is the cost of making an application, with the minimum cost being estimated at €50,000, some quoting a figure as high as €90,000. This represents a major outlay, both for those already operating and seeking a renewal, or those wishing to enter the market.

4.2.7 Among those already operating in the market, and subject to an annual review by the Commission, a number queried the need for them to make a full re-application. One operator put it thus:
“While I understand the reasoning for the recent process, I would say that those who have successfully operated a licence for thirteen years should not have to re-apply in a similar manner to a new applicant seeking the licence. The BCI operates under strict guidelines and its annual review of the operational side of the stations gives them a close insight into how the station is being run. The facility exists for them to deal with any matters of concern in terms of the day to day running of the station and this, I believe should negate the need for stations to have to make a full re-application after a certain period of time”.
Another operator had this view:
“The process will have taken almost two years to complete. In addition to time and resources invested by the Commission I would estimate that the average cost of producing each application was in the region of €75,000. This does not include management time from each station which was also required in compiling the application…… I believe the situation is akin to any other where the state is seeking private individuals to provide services to the people of Ireland. Presumably if these services are provided properly and in accordance with agreed terms then the agreement should continue on an ongoing basis”.

4.2.8 It is worth noting that at the end of the two-year process, there has been relatively little change in the franchises. This suggests a level of stability and settling down of the radio market and with a constant review being conducted by the BCI on an ongoing basis, there may be some need to look at the cost, and have a two-tier approach to existing and new applicants. A fast track process, when only one applicant emerges, should also be put in place.

4.2.9 Concern at a trend towards consolidation of ownership of franchises as well as cross media ownership of media outlets is one which did emerge in the responses. This is how one operator put it:

“The media is a vital ingredient in any democracy. Such a valuable national and local asset should not be allowed to fall into the hands of just a small number of people….. the media, for the good of democracy, should be diversified instead of centralised. Local radio was doing this, but not any more”.

4.2.10 More than one response pointed to the fact that Independent Newspapers now has a major interest in local radio stations, including new franchises and that a number of stations across the country have directors in common, tending to the view that there is over consolidation which could lead to a monopoly in the future.

4.2.11 The involvement of media companies located outside the state was also referred to. One operator was of the view that the Commission could face a situation in the future of having satellite operators in Ireland. He instanced the situation in the United States where, although there is a myriad of local stations, there are only five companies in the market in total. He was of the view that this could present a major challenge to the BCI in the future.

4.2.12 This raises the issue of diversity of ownership and the kind of company running a franchise. Members of co-operatives feel strongly that the Commission does not favour a co-operative approach to running a station, their opinion confirmed by the fact that the only two franchises not renewed, were run by co-operatives and another offered a community licence against their wishes. They feel that the objective of the co-operative movement is not appreciated by the Commission.
“The Commission has no idea what a co-operative society is. It embraces people from a broad spectrum of society. It is very local in its context. It affords people with a minimal income to become shareholders. It incorporates a huge amount of voluntary effort. It belongs to the people….we found that in their mindset, the Commission did not understand the concept of the co-operative society and did not see that some of the major businesses in rural Ireland are in fact co-operatives”
Another said
“…they (the Commission) didn’t seem to understand the co-operative structures of our organisation or the loyalty the people had to their own radio station, one owned and largely operated by them”
The view was also expressed that the concept of local radio being the voice of the people has been considerably undermined and that community effort cannot be recognised in a commercial context. It was also stated that the demise of co-operatives also undermines the local identity of local radio stations.

4.2.13 Special interest radio stations and community stations who responded declared themselves for the most part very happy with their relationship with the Broadcasting Commission, and some singled out the Commission for praise for their support for new and small stations starting up.

4.3 Why regulate local radio?

4.3.1 The role of regulators is to put legislation into practice. By interpreting national and European legislation, regulators impose specific terms and conditions to guarantee a basic threshold of quality services for the general public. Regulation is allowed by governments in order to improve competition in each industry. It is required to prevent business from engaging in anti-competitive behavior or establishing a strong concentration of market power that can be used to reduce choice of services for consumers as well as prevent competitors from accessing the marketplace.

4.3.2 Media regulation, unlike utility regulation, has specific cultural responsibilities. Therefore normal competition rules do not apply in cases of cross media consolidation or acquisitions. However, regulators are aware of the importance of competition law in relation to the development of markets in a fair and non-discriminatory manner. Under Section 60 of the 2001 Broadcasting Act, the Broadcasting Commission of Ireland (BCI) must explain with clarity and transparency its reasons behind decisions taken during each licensing process to each applicant. The role of the BCI in local radio is to regulate content and tackle any problems that may prevent the production and access of cultural, Irish language and social programmes to Irish audiences. Unlike competition law, a regulator can take into account the specific cultural and social obligations of certain media services, like local radio, when licences are awarded or set for renewal.

4.3.3 One advantage of using regulatory powers rather than competition rules lies in the BCI’s capability in responding to immediate market challenges while engaging the advice of the Competition Authority on competition difficulties over a longer timeframe. On the other hand, it is argued that too much regulation can have a negative impact on the development of competition when the pace of change is so rapid that any ‘detailed regulation is unlikely to keep up with the developments in the industry’ (Massey, 1999:http).

4.3.4 Furthermore, if most of the regulator’s information about the sector comes from the industry itself, the agency could empathise to an unreasonable extent with the regulated industry and ‘end up defending it rather than policing it’ (Massey, 1999:http). According to Hoskins, McFadyen & Finn, “the regulator is captured by the industry and its regulations protect the interests of the existing firms in a regulated industry rather than the public, the latter being the assumption in the alternative public interest theory” (Hoskins, McFadyen & Finn, 1997:86-87). At this stage, less regulation becomes the best option in encouraging competition.

4.3.5 In general, best practice in local radio regulation may be achieved by dealing with ownership issues on a case-by-case scenario. In terms of public interest, a positive balance towards the local ownership of local radio may become the preferred operational vehicle to drive the combined long-term strengths of local participation and content diversity in each franchise area, while keeping the spirit of national legislation that established local radio firmly on track.

4.4 Legislation and Regulation

4.4.1 This section will chart the development of local radio within a changing legislative and regulatory environment. It will explore the central issues facing the future of local radio broadcasting in Ireland. These commercially driven enterprises are also the carriers of social and cultural experience within each community. While offering a range of services ranging from music-driven to speech-led content, the audio landscape was radically and irreversibly changed across all urban and rural areas with the launch of independent local commercial radio.

4.4.2 Out of the economic success of pirate radio, national and local commercial broadcasting evolved. The passing of the 1988 Radio and Television Act removed RTÉ’s traditional monopoly on the airwaves. The 1988 Act was a seminal piece of legislation in Irish media history. It provided the ground rules for the introduction of commercial broadcasting in both radio and television. It paved the way forward for local radio to address their core local audience within a clearly defined geographical space. Under the auspices of the Independent Radio and Television Commission (IRTC), local stations were initially given 7 year leases.

4.4.3 In 2002/3, the third cycle of franchise awards are being received, processed and passed by the content regulator. Contracts for each licence have been extended to 10 years. In the current climate of re-assessment and examination of each tranche of applications, this is a timely commentary on past and recent experiences that have shaped and informed current legislative and regulatory frameworks in local radio in Ireland.

4.4.4 Therefore this report will explain how commercial broadcasting in local radio has developed through two distinct phases. The first phase (1988-2001) focused on shaping the necessary market conditions for the launch and survival of these fledgling stations. In general, it is argued that this objective was achieved through a regulatory policy that centered on access to content, audience ratings, strong revenue streams and local ownership rules.

4.4.5 The second phase (2001-onwards) concentrates on sustaining the current popularity and economic success of local radio by focusing more on content and local ethos rather than ownership diversity. The historical need to keep a tight grip on local radio acquisitions or cross media ownership of businesses that incorporate local radio has been reviewed and withdrawn.

4.4.6 Regulation, as experienced in other media outlets, is an essential element to the proper functioning of the local radio’s remit. The provision of programme diversity and editorial independence, subject to commercial expectations, as well as continued investment in local radio will be directed, in part, by the decision making of the regulator. For that reason the IRTC/BCI and its position on local radio ownership will be examined. The regulator’s remit is to protect the public interest by imposing certain obligations on local radio operators that relate to issues surrounding content accessibility and diversity.

4.4.7 Overall local radio has been hugely popular and successful for the local audiences and service providers. In 1991, three years after the passing of the 1988 Act, 21 local stations were in operation. By 2001, 22 local commercial stations were on the airwaves taking a significant portion of the market share. It is anticipated that the current level of audience share will increase during the years ahead.

4.5 Legislation

4.5.1 Radio, like television, is a broadcasting medium for the transmission and reception of content and associated services. As a technology-led medium, past service providers, such as RTÉ, were given the responsibility to produce and supply a universal range of public broadcasting services throughout the country. Broadcasting is a powerful force for influencing, shaping and directing public opinion, a sense of citizenship and democratic participation in society. This is recognised in legislation from the 1926 Wireless Telegraphy Act to the more recent 2001Broadcasting Act. Regulation, which naturally follows on from Acts of parliament, attempts to ensure that access to different voices and viewpoints can be realised through fair, reasonable and non-discriminatory behaviour in the market. Access to RTÉ’s television and radio stations are accessible Free-to-Air.

4.5.2 While a viewer’s experience of watching television is centered on a passive and sedentary expectation, the reception of radio signals is a more mobile form of communication. The adaptability of radio devices with headphones or portable stereos allows listeners to access stations across a wide range of geographical positions.

4.5.3 Technology is the required means to distribute and receive a station’s signal. But it is the content that is king in the ecology of radio broadcasting. In this spectrum lies many different categories and varieties of programming. For instance when a national radio broadcasting service, 2RN, was launched in Dublin in 1926, speech based programming found an immediate and popular listenership. The emphasis on news, current affairs, weather, farming and sports exhibited a national sense of identity and connectivity with the citizen and public opinion.

4.5.4 Before the passing of the 1988 Act, RTÉ was the main producer of radio content for local and national audiences. A combination of advertising revenue with a licence fee supplement enabled the public broadcaster to launch some radio stations based in a certain locality in the 1970s². In a response to the success of pirate radio, RTÉ launched a nationwide music-led station, Radio 2. But this was a little too late as the gradual rise of pirate radio broadcasting and its immense public support created the foundation for commercial local radio in Ireland.

4.5.5 Since the passing of the 1926 Wireless Telegraphy Act, the regulation of radio broadcasting rested with RTÉ. Up to the launch of Radio 2, RTÉ 1 was the only legal radio station in the country. In the mid1960s, several illegal stations began to crop up throughout many urban communities. These unlicensed operators broadcasted a range of mainly music-oriented programmes which were not available from the semi-state organisation. The growing popularity of these stations was reflected in the surge of new pirate stations in operation across the country. According to Horgan (2001), there were 25 illegal stations broadcasting in the mid1970s, ten years later, this number had rocketed between 70 to 100 locally based pirates on the airwaves across the country (Truetzscher1991b).

4.5.6 Pirate radio was responding to a public demand for access to a wider selection of services other than the standard fare on offer by the national broadcaster. The ability of the pirates to quickly respond to their audience tastes and interests was rewarded by high audience figures and advertising revenue.

4.5.7 Although, their popularity was beginning to be noticed by the government and the police, they were helped on by other exigencies. Pirates were able to take advantage of the discrepancies contained in the 1926 Act and a nominal Court fine was charged for possession of equipment used for operating an illegal broadcasting unit. Several illegal stations were raided by the police and closed down, only to resume broadcasting after a short intermission. The attempted closure of some, Dublin based, commercial local stations like Sunshine and Q102 was greeted with mass public demonstrations in open support for the pirates. Although these pirates were unregulated and illegal entities, the public demanded change. As the pirates garnered public support, government policy had to be re-appraised.

4.5.8 During the early 1980s, the FF-led government decided to publicly support the campaign for the legislation of local radio. They were helped along this route by the preceding FG/Labour coalition who had already created an Interim Radio Commission. The objective of this group was to assess the feasibility of commercial local broadcasting with a steadfast commitment to some public service duties.

4.5.9 With this in mind, the newly returned FF government that followed the collapse of the FG/Labour coalition passed the 1988 Radio and Television Act. In order to acknowledge the historical and cultural role of news and current affairs in national broadcasting, all contract holders were obliged to provide at least 20 per cent of their output to news and current affairs or at least 2 hours of speech content during 7a.m. and 9p.m. each day. Access to current affairs was to be given fair and reasonable prominence beside music and entertainment services.

4.5.10 The objective of the act was to, inter alia, create ‘a service which is recognisably local and which was supported by the community’ (White, 1993:6). The regulatory regime arising from the 1998 Act was to be adopted and implemented by the IRTC. This new agency would be responsible for specifying the statutory duties, terms and conditions for each franchise holder.

4.6 Phase 1 (1988-2001): Start-up

4.6.1 The 1988 Act allowed for the launch of commercial radio in Ireland. At this nascent stage, the agency’s mission was to provide the necessary regulatory conditions for this new commercial sector. The IRTC had to ensure that a diverse collection of programmes would be representative of the ethos of each locality whilst providing practical support for the long term economic stability and burgeoning success of local radio as a commercial entity. Programmes were to relate to the marginalized voices in communities, Irish language and arts documentaries.

4.6.2 The 1988 Act allowed the IRTC to apply their own interpretation of the legislation to ensure the success of the new sector while protecting the public interest by taking cultural and social issues into consideration in the application procedure for awarding local contracts. Aware of the danger of creating a totally market-driven sector, the 1988 Act listed general caveats to be placed on each franchise in order to make sure that issues of programme diversity and ownership met the regulator’s approval. Under Section 6, a local radio station can have their contract terminated.³ These statutory obligations are prerequisites to the provision of local radio.

4.6.3 The IRTC was responsible for creating a policy on market intervention in order to protect the diversity of content and maintain a strong level of competitiveness and difference amongst local and national radio broadcasters. The IRTC was able to guide the sector in order to ensure that each station was working within these agreed terms and conditions.

4.7 Programming and Content

4.7.1 The IRTC’s main programme related policy objectives were stated in the following (1988 Act extracts in Appendix); Section 6 (2) (c), (d), (e), (f), (i).

4.7.2 One key objective stated by the legislator was that listeners should be offered a comprehensive range of choices from local stations. It was hoped that a wider range of innovative and imaginative programmes would create a more informed and articulate public opinion. The collective voice would proactively contribute to cultural and social discourse within the locality or community and build an even richer broadcasting sphere. In non-music driven local stations, diversity in the daily programme schedule increases the audience via different age groups by the provision of a speech, local sport and niche music mix of services.

4.7.3 During this first phase, monitoring programme diversity and making sure that the defined quota’s for advertising minutage and news/current affairs was a difficult exercise. This issue was more problematic in urban based, music-led areas. For instance, in the early days Dublin’s 98FM and FM104 appeared to broadcast wall-to-wall music.⁴ It was claimed that this activity did not operate in the spirit of the 1988 Act as stated in Section 6 (2) (c), (d), (e), (f), (i). These stations target certain demographic groups rather than the widest audience possible. There was little if any Irish language and arts programming. It was argued that such public disregard for the regulator’s terms and conditions accepted by the stations was allowed to go by ignored and unchallenged. The regulator’s indecision on the matter and failure to comment publicly on the situation was widely criticised. It seemed that by not forcing these stations to fulfill the public service nature of their contractual obligations, other local radio operators were able adopt a similar lassiez-faire approach without a regulatory response.

4.7.4 While Section 4 states the IRTC’s primary duties, the regulator relied heavily on the legal experience of its inaugural Chairman when it came to matters concerning cultural content. Even so, Horgan claims that ‘the definition of broadcast material that met this criterion was generally elastic’ (2001:178). The regulator appeared to be on a steep, and at times precipitous, learning curve. Any attempt to adjust the seat were often met with the unanticipated vicissitudes from local radio ownership and control.

4.8 Ownership and Control

4.8.1 The IRTC’s main programme related policy objectives were laid out in the following (full 1988 Act extract in Appendix); Section 6 (2) (a), (b), (g), (h), Section 6 (3), Section 14 (1) and (2).

4.8.2 Section 14 (2) states that the IRTC ‘prohibits … any material change in the ownership of a company … by specifying a condition in the contract itself …[the] IRTC will have regain to criteria in Section 6 (2), (3).

4.8.3 When the IRTC assess the 1988 Act, they do so in the belief that at this early stage the development of a local radio industry, is important for local groups or consortium(s) and should be awarded ownership of each franchise in order to create a distinctive style of broadcasting and identity with the locality. A combination of community, private and business shareholders named in an application was favourably regarded as an important symbol of familiarity and attachment with the needs and expectations of the local audience. It seemed that a diverse collection of local shareholders would create a strong level of support from the local business community in the form of advertising revenue.

4.8.4 By refusing to allow radio stations to merge or be bought out by other national radio operators or international media groups, the IRTC hoped that a sense of local ownership and independence would help create a strong identity. This would be specific to that locality with unequalled access to local news and current affairs coverage. From the start of the licensing process, the IRTC believed that local ownership would impact positively on the production and access of an unrivalled and distinctive regional radio service.

4.8.5 Nevertheless, the issue of cross media ownership⁵ came to prominence in 1990, only a year after the launch of the first local station⁶. Individuals familiar with pirate broadcasting found that operating a legal station, that demanded significant upfront investment for correct transmission standards, studio maintenance, financial management and employment contracts, to be a very different experience. General proposals from the media industry that supported the merger or acquisition of several franchises under cross media businesses were not countenanced by the regulatory regime.

4.8.6 At this time, 98FM expressed an interest in acquiring the struggling Galway station, Radio West. The chairman of 98FM, Denis O’Brien claimed that the company’s decision to submit an application to make a bid for the station was due to the positive support received from the IRTC’s Chairman, Mr. Connolly. However, after considering the proposal, the IRTC decided to block 98FM’s plans on the grounds that it would unduly interfere with the local character of Radio West. The IRTC believed that a music driven format was unsuitable for the rural/urban landscape which targeted a different demographic audience to 98FM. The implication was that the dominant shareholder would adapt the station’s programming schedule around 98FM’s own music ethos while being removed from the initial speech driven approach.

4.8.7 Meanwhile, the IRTC allowed Mid West Radio (MWR) to invest in North West Radio (NWR). Today, both stations share programmes, some staff and a Chief Executive. According to the regulator, this cross ownership scenario was permissible due to the financial difficulties experienced by NWR. The IRTC claimed that both franchises would remain independent with their own studio bases and distinctive local ethos in their respective programming schedules. Both stations do not compete for advertising revenue.

4.8.8 Nonetheless, the IRTC’s position on local ownership was not accepted by 98FM. There were accusations of poor policy judgment and management. In other words, 98FM claimed that the regulator’s decision to permit the London based Capital Radio media group to invest in the ill-fated national commercial radio broadcaster, Century⁷, contradicted their own policy on radio ownership and did not encourage investment in the sector.

4.8.9 Consequently the 1988 Act allowed media groups to own up to 27 per cent shares in a local station, 98FM withdrew their investment plans in the local radio arena. In time, the claim that cross media ownership or ‘non-local’ investments were crucial for struggling stations to stay on the airwaves became more and more vocal. It was argued that with the changing market, consolidation across independent commercial stations could share the costs of production on minority or non-commercial programmes. As long as local radio stations, owned by the same organisations, did not compete directly with each, mergers or acquisitions could provide local radio with the resources to make more diverse programmes and retain their independence.

4.8.10 The belief was that the public interest would be protected from the dominance of particular media groups that control several media outlets by allowing the local stations to share resources. Yet the IRTC did not accept the argument that local ownership of local stations could hinder the pace or level of investment through access to financial resources, advice, new skills and experience.

4.8.11 One challenge associated with permitting media groups to acquire several local stations as well as other media businesses is the potential of market dominance across advertising rates spanning a range of local stations. Owners of several stations could use economic and political leverage to advocate their own private opinions on the public airwaves whilst limiting alternative or pluralistic points of view. In this way, diversity of cultural, social programming and community participation outside of a musical carousel model of commercial broadcasting, may hinder access to the population that local radio was intended to serve. In time, this regulatory approach could re-enforce ‘any undue concentration of economic power contrary to the public interest’ (Competition Authority, 2001:4).

4.8.12 Indeed the period up to the 2001 Broadcasting Act was one of animated consultation on the issue of radio and ownership. Was local ownership the best approach to guaranteeing the production of high quality local programming or did such an approach restrict outside investment for locally made radio content? It was suggested that regulatory measures which limited ownership to local community representatives could prevent stations, notably those with small audiences, from the experience and benefits of a large media structure with access to a stronger financial base. Small local stations would not be able to respond to their audience’s expectations of new and exciting programme diversity where such services require a high level of funding, like local sports and daily current affairs coverage.

4.8.13 The IRTC’s traditional approach to this conundrum was to protect each local station’s sense of place or geographical licence in terms of local ownership and content, respectively. It was hoped that giving priority to control and market share targeted the construction of a loyal and solid listenership.

4.8.14 After the Broadcasting Bill was enacted in the Oireachtas in 2001, the IRTC began to explore new approaches to cross ownership in local radio while maintaining the vibrant characteristics of local radio into the future. The regulator began to re-channel their concerns towards content diversity and away from ownership plurality as long as competition law was adhered to.

4.8.15 In the words of the IRTC, ‘local ownership would not be regarded as a factor in deciding whether or not a station had a local ethos’ (BCI, 2001a:http). Importance was placed on the level of competition between local stations in the radio market rather than on the number of stations independently owned in each franchise. The previous policy of restricting media groups to 27 per cent of shareholdings from any station was quickly jettisoned.

4.8.16 This landmark decision led the IRTC to sanction the 100 per cent takeover of Today FM by the UK based media group, Scottish Radio Holdings. After a period of customary procrastination on behalf of the regulator, UTV eventually bought County Media in Cork which owned 3 local stations⁸ and a free news-sheet called ‘Inside Cork’ in 2001.⁹

4.8.17 The direct alignment of local ownership with the voice of the locality and its associated programming was amended with the passing of the Broadcasting Act 2001. Consolidation became an equal and legitimate bedside partner with local ownership in the formation of a new framework for commercial radio in Ireland. In the longer term, the decision to apply a less restrictive approach to cross ownership of media services was an attempt to increase the overall level of competitiveness and investment in the local and national market.

4.9 Preparation for a Second Coming

4.9.1 The IRTC believed that its initial approach to the sector in the First Phase was formulated to reach and achieve a set of objectives that were becoming null and void. They cited examples such as the increased number of licences made available to local stations in certain regions and intense competition for listeners along county boundary lines and from national broadcasters. The regulator took the decision to apply a less restrictive policy on ownership shareholdings in an attempt to increase the level of competitiveness in the local and national markets.

4.9.2 By altering this initial imposition, local ownership protected the general ethos and content diversity of each station. In turn, the IRTC acknowledged the potential benefit of consolidation in local radio. General advantages included a greater degree of investment in local content and long- term competitiveness. However this action did not mitigate the importance of monitoring each station’s regulatory obligations, including homemade programmes. The agency was conscious of the economic pitfalls in ‘favouring diversity over competition considerations [that] could lead to distortions in the marketplace’ (Competition Authority, 2001:11). On the other hand cross media ownership could establish a gateway to the airwaves and block public access to local, national news and current affairs not favoured by the media owners.

4.9.3 As the content regulator prepared to apply the 2001 Broadcasting Act, it had begun a case-by-case, evidence based approach to local radio acquisition deals involving media groups. The next phase in local radio development was to produce a more facilitative or ‘light touch’ regime style to accommodate the anticipated demand from the industry relating to cross media ownership.

4.10 Phase 2 (2001+): Current Situation

4.10.1 This new period of local radio regulation began with the passing of the Broadcasting Act 2001. The following section of the 2001 Act dealt with local radio;

4.10.2 Section 10, Section 11, Section 15 (a), (b), (c), (d), (e), Section 38 (6), (7), Section 60 (4), (5).

4.10.3 The 2001 Act instructed the agency to be renamed the Broadcasting Commission of Ireland (BCI). Legislation continued to allow the regulator to determine the statutory process for sound broadcasting applications and renewal contracts. Indeed, the onus was left with the BCI to mould local radio policy from the 2001 Act’s extensive list of objectives.

4.10.4 Overall, the 2001 Act was published in response to rapid technological, transnational and economic changes in television and radio broadcasting. The 2001 Act offered the BCI the legislative flexibility to determine ownership issues¹⁰ on a case-by-case basis while keeping in hand the power to block any deal that may generate an undue level of concentration in media business to the detriment of local content production. The regulatory aim was to carry on providing each regional audience with a strong, independent and distinctive radio service. Diversity and access to content was the imperative.

4.10.5 Yet changes in the industry were encouraging the agency to re-assess their own traditional approach. It was suggested that by restricting cross media ownership, the regulatory regime could undermine diversity. With this in mind, the BCI stated that ‘the extent and character of broadcasting is now changing, away from a purely geographical basis’ (IRTC, 2001:http). Meanwhile the BCI has begun supporting collaborative programme making. The agency has been working with Foras na Gaeilge in an attempt to promote Irish language programming in the independent sector. The BCI has launched a fund to help support radio production concerning culture and arts opportunities in local and community radio.

4.10.6 In line with this policy change, 2001 witnessed the Competition Authority permitting several local stations, outside of Dublin, Galway, Limerick and Cork, to share a news service. As long as these stations did not directly compete for advertising revenue, the Competition Authority allowed the affiliated stations to sell their local radio slots through their jointly owned agency, Independent Radio Services (IRS)¹¹. The group established an Independent News Network to provide news coverage for these local stations. Overall the 2001 Act attracts considerable attention to the ‘achievement of a local ethos’ concerning local ownership as overriding criteria for the award or renewal of a local radio licence (BCI, 2001a:http).

4.10.7 It should be noted that all commercial independent radio stations, either locally or transnationally owned, who have re-applied for their sound broadcasting contracts have been successful during the current round of licence renewal. In addition, the BCI has placed a two-year moratorium on any ownership changes after awarding or renewing sound broadcasting licences. However this stance has not prevented shareholders of recently launched niche local radio station, Dublin’s Spin 103.8, to publicly announce their plans to sell their 33 per cent stake as soon as they receive the regulator’s permission.

4.10.8 The content regulator has teamed up with the Competition Authority to work together in addressing media mergers or acquisitions that may impact on national and European competition law¹². The 2002 Competition Act, Section 34 (1) permits the BCI to give the Competition Authority requested information on cross media ownership decisions where competition issues arise in individual cases¹³. While the BCI will make judgments on matters of diversity, the Competition Authority will examine the competition law implications for any concentration of radio stations. Indeed, the 2002 Competition Act places the final political decision for media mergers, for example involving radio stations and newspapers, with the Minister of Enterprise, Trade and Employment (RTÉ, 2002:http).

4.10.9 Both offices are aware that where consolidation of local radio can distort the development of competition in the local market, listeners may be offered a smaller range of home produced content. On the other hand, the integration of several media businesses could supply an economy of scale and scope to the local market that would not be forthcoming from smaller sized competitors.

4.10.10 At the moment, this co-operation agreement has yet to be fully tested in any license award or renewal decision. It may be a positive mechanism in ensuring an essence of plurality of ownership that encourages competition and ergo local content diversity.

4.11 Conclusion

4.11.1 Local radio must be adapted for the local market. But claims that cross media ownership and increased programming investment go ‘hand in glove’ do not necessarily hold up. Companies will want to buy local radio if it is profitable. Without regulatory rules and competition law, they could increase their profits by reducing the production of local news, current affairs, entertainment and information services (Dyke, 2002).

4.11.2 It is too early to assess the success or otherwise of the 2001 Broadcasting Act on local radio. Future evidence based investigations of cross media ownership involving local radio, and a review of likely its consequences, will draw the BCI and Competition Authority together.

4.11.3 A strong content regulator, acting in a fair, reasonable and transparent manner, that is supported by the competition authority will be crucial to maintaining a balance between a competitive marketplace and appropriate regulation. For the listener to be given real choice, both agencies must protect both the consumer and citizen interest. News, current affairs, entertainment and information are not pure commodities (Puttnam, 2003). They possess cultural, political and social values. The audience have a right to be heard and to be serviced (Davies, 2002).

Joint Committee on Communications, Marine and Natural Resources

Report No. 5

LOCAL RADIO: THE LICENCING PROCESS - A REVIEW OF THE LICENSING SYSTEM AS EXPERIENCED BY LOCAL RADIO STATIONS IN IRELAND.

5. Recommendations of the Joint Committee.

5.1 Appeals Mechanism

4.2.3 of the rapporteur’s report identified concerns which have emerged regarding the transparency of the decision making process in awarding a franchise, the level of accountability for that decision, and the absence of an appeal mechanism. The Committee considers that consideration should be given to the setting up of an appeals mechanism, independent of the Broadcasting Commission. This point is further reinforced in 4.2.5 where an appeal mechanism has arisen as a core one, in particular for those who have lost out in the last licensing round and where one applicant commented;
“Because the BCI is not directly answerable to the Minister for Communications, there has to be some method of holding them accountable for their decisions, other than having to resort to the courts, who can only deal with legal points. The cost and risk of going to court is prohibitive, and wouldn’t necessarily address the questions we would want to have answered”.
Such a non-judicial appeals mechanism could adjudicate on complaints against the Commission, or against the decisions of the Commission. This non-judicial mechanism could consist of one independent eminent person, for example, called upon when needed, with a small administrative backup as required. This could also serve as a mechanism to ensure greater accountability for the decisions of the Commission and would assist in addressing the concerns revealed in 4.2.4 of the rapporteur’s report in which one operator noted that
“..the Commission’s analysis of the applications is deficient. In particular it does not commission independent research to enable it examine the veracity of the key data and assumptions in the applications. Accordingly it has no pre-defined conclusions or yardstick to use in evaluation of applications. We identified a number of contradictions and unresolved issues in the … process where subsequently the Commission were unable to provide us with any satisfactory explanations…. The inability of the Commission to adequately explain and deal with those inconsistencies seriously impinges on the credibility of the process”.
The Committee would be concerned that the credibility of the process would not suffer as 4.2.2 of the rapporteur’s report notes the change in the relationship between the Broadcasting Commission of Ireland and franchise holders from a position where a number of operators noted that whereas, up to the mid 1990’s, this relationship was marked by a confrontational relationship between the regulator and the franchise holder, this has now changed to a situation where there is a now a high level of consultation between the Commission and franchise holders.

5.2 Transparency of Decision

The Committee considers, in light of the points made in 5.1 that there is a case to be made for greater transparency in the decisions of the Broadcasting Commission of Ireland, as well as independent verification of claims made by applicants. This latter point is important and reinforced by the point made in 4.2.4, as cited in 5.1 above. The Broadcasting Commission of Ireland needs to commission independent research so as to enable it to examine the veracity of the key data and assumptions made by applicants in their applications. This is particularly so in relation to listenership projection. Accordingly, as the data of applicants is not independently verified the Broadcasting Commission has no pre-defined conclusions or yardstick to use in evaluation of applications, as one operator put it:
“..the Commission’s analysis of the applications is deficient. In particular it does not commission independent research to enable it examine the veracity of the key data and assumptions in the applications. Accordingly it has no pre-defined conclusions or yardstick to use in evaluation of applications. We identified a number of contradictions and unresolved issues in the … process where subsequently the Commission were unable to provide us with any satisfactory explanations…. The inability of the Commission to adequately explain and deal with those inconsistencies seriously impinges on the credibility of the process”.
The Committee consider that this matter is very relevant to the final decision made by the Commission and the requirement of the Broadcasting Commission of Ireland to provide an explanation to an applicant or in regard to decision made. Further, The Committee considers that there is a case to be made for the publication of the independently verified data as this could obviate any concerns that unsuccessful applicants may have.

5.3 Cost of Applications

The cost of an application needs to be examined, since it could act as a deterrent to new applicants and ways should be examined to bring down the cost of the applications, especially repeat applications. This point is reinforced by 4.2.6 and 4.2.7. The Committee were concerned, on the basis of the research, to note that an applicant can expect to spend at least €50,000 added to which there would be a significant cost in terms of senior management time expended in a licence application. Further, the Committee would be most concerned if this level of expenditure was replicated in applications for Community and/or co-operative licences. Such large costs in terms of financial and staff time could make an application for a licence in the sector of the market prohibitive for such groups and result in scarce resources being diverted away for necessary investment. In effect the licencing process and the costs therein could undermine the very viability of such enterprises.

5.4 Rollover of Licence

Automatic roll over of licences should be considered. However, the Committee are cognisant that such a proposal may have the effect of generating a property right and therefore any proposals mooted to facilitate a rollover of a licence would require the advice of the Attorney General so as to ensure that licence holder do not have a claim on a property right as the generation of such would be repugnant to the ‘spirit’ of the legislation and the policy that has evolved.

Notwithstanding the issue of a potential generation of a previously non-existent property right, consideration should be given to some form a ‘once-off’ licence rollover, possibly predicated on the basis that licence holders has been in full compliance with the terms of their broadcast licence during the term of the licence and at the call for expressions of interest stage there is no challenge to the incumbent licence holder. The point is made in 4.2.7 as one operator put the position in terms of;
“…. The BCI operates under strict guidelines and its annual review of the operational side of the stations gives them a close insight into how the station is being run. The facility exists for them to deal with any matters of concern in terms of the day to day running of the station and this, I believe should negate the need for stations to have to make a full re-application after a certain period of time”.
Therefore should a licence holder be considered unsuitable to hold a licence the Broadcasting Commission of Ireland are in the position, through its monitoring, review and disciplinary mechanisms to deal with matters in good time and prior to any licence renewal process.

5.5 Fast Tracking Mechanism

The Committee considers that should automatic renewal not be deemed appropriate or workable on grounds such as the creation of a property right, then a different approach may be to grant renewal where the licence holder has been in full compliance with the terms of their licence and where, in the re-licence process no other application is received.

The Committee considers that where an incumbent licence holder is in good standing with the Broadcasting Commission of Ireland and where such licence holder has been in full compliance with the terms of their licence then they should not be penalised, particularly when they are the only applicant, by having to incur the large financial expense together with the expenditure of staff time associated with a re-licence application. The Broadcasting Commission of Ireland in the post expression of interest stage can consider such amendments, clarification or alteration to a licence as may be deemed necessary.

5.6 Consolidation of Ownership

The Committee notes the concerns expressed at a trend towards consolidation of ownership of franchises as well as cross media ownership of media outlets and this did emerge in the responses (see 4.2.9). However, the Committee is unsure if such concerns appear to be programming rather than ownership related.

Having a number of stations owned by a single owner does not necessarily mean a consolidation or watering down of programming. The Broadcasting Commission of Ireland have a significant role to play in this regard and already have a significant level of input into the programming of stations as well as the approval of each station’s board of directors and management. To address this issue the Broadcasting Commission of Ireland should be required to examine the question of it having sufficient powers vested in itself to ensure that programming concerns, together with ownership issues can be regulated. The Broadcasting Commission of Ireland should be able to embrace all the positives of consolidation while at the same time legislating for any possible programming difficulties that may arise in the servicing of what is in essence a local market.

5.7 Quota of Local Programming

The Committee considers that key to the success of local radio in Ireland is the ability of individual stations to address the unique programming requirements of their local community. This remains a pre-requisite for the continued success of stations, no matter in whom ownership is vested. However, the Broadcasting Commission of Ireland could regulate for any concerns regarding local programming by the implementation of a local programming quota. The comparison with independent newspapers may not be valid as local radio stations are heavily regulated in both their programming content and in ensuring that all output is fair and balanced and this should alleviates any monopolistic fears.

5.8 Role of Co-operatives

The Committee considers that 4.2.12 does raise the valid issue of diversity of ownership. Members of co-operatives feel strongly that the Broadcasting Commission of Ireland does not favour a co-operative approach to running a station, their opinion apparently confirmed by the fact that the only two franchises not renewed, were run by co-operatives and another was offered a community licence against their wishes. The Committee are of the opinion that the Broadcasting Commission of Ireland should clarify its position on corporate governance having particular regard to co-operatives as a corporate structure for the running of a radio station. In many cases the role of a co-operative is to provide a strong local community service, which is not just led by commercial motives alone. In some, but not all cases, a community licence can embrace this role, but it is the opinion of the Committee that there should be sensitivity to the objective of the station.

5.9 Procedures when a licence is not renewed

The Committee considers that security of tenure is an issue for stations where the application to renew their licence has not been successful. The decision of Broadcasting Commission of Ireland’s to hold the licensing process at an early stage so as to ensure at least l8 month’s notice is welcomed by the Committee as is the decision to move to a 10 year licence in the current licence renewal process. However little consideration is given to the orderly winding-down of a licence holder who has been unsuccessful. In this context, disposal of fixed assets, such as investments in property, which typically have a longer write down period greater than the 10-year term of the current terms could cause financial hardship. Procedures could be re-examined.

Joint Committee on Communications, Marine, and Natural Resources

List of Members

Orders of Reference

Dáil Éireann on 16 October 2002 ordered:

1. 1. That a Select Committee, which shall be called the Select Committee on Communications, Marine and Natural Resources consisting of 11 members of Dáil Éireann (of whom 4 shall constitute a quorum), be appointed to consider -
      
      1. such Bills the statute law in respect of which is dealt with by the Department of Communications, Marine and Natural Resources;
      2. such Estimates for Public Services within the aegis of the Department of Communications, Marine and Natural Resources; and
      3. such proposals contained in any motion, including any motion within the meaning of Standing Order 157 concerning the approval by the Dáil of international agreements involving a charge on public funds,
         as shall be referred to it by Dáil Éireann from time to time.
   2. For the purpose of its consideration of Bills and proposals under paragraphs (1)(a)(i) and (1)(a)(iii), the Select Committee shall have the powers defined in Standing Order 81(1), (2) and (3).
   3. For the avoidance of doubt, by virtue of his or her ex officio membership of the Select Committee in accordance with Standing Order 90(1), the Minister for Communications, Marine and Natural Resources (or a Minister or Minister of State nominated in his or her stead) shall be entitled to vote.
2. 1. The Select Committee shall be joined with a Select Committee to be appointed by Seanad Éireann to form the Joint Committee on Communications, Marine and Natural Resources to consider -
      
      1. such public affairs administered by the Department of Communications, Marine and Natural Resources as it may select, including, in respect of Government policy, bodies under the aegis of that Department;
      2. such matters of policy for which the Minister for Communications, Marine and Natural Resources is officially responsible as it may select;
      3. such related policy issues as it may select concerning bodies which are partly or wholly funded by the State or which are established or appointed by Members of the Government or by the Oireachtas;
      4. such Statutory Instruments made by the Minister for Communications, Marine and Natural Resources and laid before both Houses of the Oireachtas as it may select;
      5. such proposals for EU legislation and related policy issues as may be referred to it from time to time, in accordance with Standing Order 81(4);
      6. the strategy statement laid before each House of the Oireachtas by the Minister for Communications, Marine and Natural Resources pursuant to section 5(2) of the Public Service Management Act, 1997, and the Joint Committee shall be so authorised for the purposes of section 10 of that Act;
      7. such annual reports or annual reports and accounts, required by law and laid before either or both Houses of the Oireachtas, of bodies specified in paragraphs 2(a)(i) and (iii), and the overall operational results, statements of strategy and corporate plans of these bodies, as it may select;
         Provided that the Joint Committee shall not, at any time, consider any matter relating to such a body which is, which has been, or which is, at that time, proposed to be considered by the Committee of Public Accounts pursuant to the Orders of Reference of that Committee and/or the Comptroller and Auditor General (Amendment) Act, 1993;
         Provided further that the Joint Committee shall refrain from inquiring into in public session, or publishing confidential information regarding, any such matter if so requested either by the body or by the Minister for Communications, Marine and Natural Resources; and
      8. such other matters as may be jointly referred to it from time to time by both Houses of the Oireachtas,
      
      and shall report thereon to both Houses of the Oireachtas.
   2. The quorum of the Joint Committee shall be five, of whom at least one shall be a member of Dáil Éireann and one a member of Seanad Éireann.
   3. The Joint Committee shall have the powers defined in Standing Order 81(1) to (9) inclusive.
3. The Chairman of the Joint Committee, who shall be a member of Dáil Éireann, shall also be Chairman of the Select Committee.”.

Seanad Éireann on 17 October 2002 ordered:

1. 1. That a Select Committee consisting of 4 members of Seanad Éireann shall be appointed to be joined with a Select Committee of Dáil Éireann to form the Joint Committee on Communications, Marine and Natural Resources to consider –
      
      1. such public affairs administered by the Department of Communications, Marine and Natural Resources as it may select, including, in respect of Government policy, bodies under the aegis of that Department;
      2. such matters of policy for which the Minister for Communications, Marine and Natural Resources is officially responsible as it may select;
      3. such related policy issues as it may select concerning bodies which are partly or wholly funded by the State or which are established or appointed by Members of the Government or by the Oireachtas;
      4. such Statutory Instruments made by the Minister for Communications, Marine and Natural Resources and laid before both Houses of the Oireachtas as it may select;
      5. such proposals for EU legislation and related policy issues as may be referred to it from time to time, in accordance with Standing Order 65(4);
      6. the strategy statement laid before each House of the Oireachtas by the Minister for Communications, Marine and Natural Resources pursuant to section 5(2) of the Public Service Management Act, 1997, and the Joint Committee shall be so authorised for the purposes of section 10 of that Act;
      7. such annual reports or annual reports and accounts, required by law and laid before both Houses of the Oireachtas, of bodies specified in paragraphs 1(a)(i) and (iii), and the overall operational results, statements of strategy and corporate plans of these bodies, as it may select;
         Provided that the Joint Committee shall not, at any time, consider any matter relating to such a body which is, which has been, or which is, at that time, proposed to be considered by the Committee of Public Accounts pursuant to the Orders of Reference of that Committee and/or the Comptroller and Auditor General (Amendment) Act, 1993;
         Provided further that the Joint Committee shall refrain from inquiring into in public session, or publishing confidential information regarding, any such matter if so requested either by the body concerned or by the Minister for Communications, Marine and Natural Resources;
         and
      8. such other matters as may be jointly referred to it from time to time by both Houses of the Oireachtas,
      
      and shall report thereon to both Houses of the Oireachtas.
   2. The quorum of the Joint Committee shall be five, of whom at least one shall be a member of Dáil Éireann and one a member of Seanad Éireann.
   3. The Joint Committee shall have the powers defined in Standing Order 65(1) to (9) inclusive.
2. The Chairman of the Joint Committee shall be a member of Dáil Éireann.”.

Appendix III - Section 4.1.1, Letter of to all licensed radio stations listed in the last Annual Report of the Broadcasting Commission of Ireland

FOR THE ATTENTION OF

THE CHIEF EXECUTIVE.

Monday 24^th February 2003.

Dear Sir/Madam,

I have recently been appointed by the Oireachtas Joint Committee on Communications. Marine and Natural Resources as Rapporteur. I am to prepare a report on the basis of a study of how local radio station operators have experienced the process of licence application, and, in particular, their recent experience of dealing with the Broadcasting Commission of Ireland.

In that regard I would be very grateful if you could respond to me, in writing, at Seanad Éireann, Dublin 2, setting out your views and experience, as a Licence Holder, of the process.

It is my intention to analyse the responses, to review the operation of the legislation and if appropriate (based on an analysis of the responses) to make recommendations to the Committee for legislative change.

Further, it is my intention to complete the report in the next number of weeks. Therefore, I would appreciate if you could respond to me as soon as possible.

If you have any queries, please do not hesitate to contact me.

Yours sincerely,

SENATOR KATHLEEN O’MEARA.

Appendix IV - Section 4.1.1, Local Radio Stations -2003.

Appendix V - Section 4.1.2, Second letter of the 10^th March

THE CHIEF EXECUTIVE

«JobTitle»

«Address1»

«Address2»

«City»

«State»

Monday 10^th March 2003.

Dear Sir,

Some two weeks ago I wrote to you asking for your views and your experience in dealing with the Broadcasting Commission of Ireland specifically in relation to the recent round of local radio licensing by the Commission.

I am seeking your view as part of a report, which I am compiling for the Oireachtas Joint Committee on Marine and Natural Resources.

So far I haven’t received a reply from you and I would be grateful if you could reply as soon as possible by post to Seanad Éireann or by email kathleen_omeara@oireachtas.irlgov.ie should you wish your experience and views to form part of the report and recommendations.

I would like to stress at this point that all material is being treated in the strictest confidence.

I look forward to hearing from you before the end of the week.

Yours sincerely,

SENATOR KATHLEEN O’MEARA, MCC.

Appendix VI: Independent Radio and Television Act 1988 (Extracts)

4.—(1) It shall be the function of the Commission to arrange, in accordance with the provisions of this Act, for the provision of sound broadcasting services (including a national sound broadcasting service) and one television programme service additional to any broadcasting services provided by Radio Telefís Éireann pursuant to the Broadcasting Authority Acts, 1960 to 1979.

(2) (a) The Commission shall enter into contracts (in this Act referred to as “sound broadcasting contracts”) with persons (in this Act referred to as “sound broadcasting contractors”) under which the sound broadcasting contractors have, subject to the provisions of this Act, the right and duty to establish, maintain and operate sound broad casting transmitters serving the areas specified in the sound broadcasting contract and to provide, as the sound broad casting contract may specify, a sound broadcasting service.

(b) The Commission shall also enter into a contract (in this Act referred to as a “television programme service contract”) with a person or persons (in this Act referred to as a “television programme service contractor”) who shall have the right and duty to provide a television programme service.

(3) The Commission shall not authorise a sound broadcasting contractor to operate a sound broadcasting transmitter and provide a sound broadcasting service pursuant to a sound broadcasting contract unless and until the Minister has issued pursuant to this subsection to the Commission a licence in respect of the sound broadcasting transmitter to which the contract relates.

(4) Any licence issued under subsection (3) shall be valid only for such period of time as a sound broadcasting contract between the Commission and a sound broadcasting contractor is extant.

(5) Every sound broadcasting contract shall contain a condition requiring the sound broadcasting contractor concerned to establish, maintain and operate the sound broadcasting transmitter concerned in accordance with such terms and conditions as the Minister sees fit to attach to the licence referred to in subsection (3), (including any variations made thereto in accordance with the provisions of section 7 of this Act) and so long as the terms and conditions are complied with, the contract shall have the effect of conveying the benefits of the licence to the sound broadcasting contractor and any such transmitter so established, maintained and operated shall be deemed to be licensed for the purposes of section 3 of the Wireless Telegraphy Act, 1926.

(6) Every licence issued by the Minister to the Commission under subsection (3) shall be open to inspection by members of the public at the Commission's registered offices.

(7) It shall be the duty of the Commission to ensure that every sound broadcasting contractor and the television programme service contractor complies with the provisions of this Act.

(8) The Commission shall have all such powers as are necessary for or incidental to the performance of its functions under this Act including, in particular, the power to require sound broadcasting contractors and the television programme service contractor to enter into financial bonds with the Commission and to direct a contractor to record any or all of the programmes broadcast by him in the case of a sound broadcasting contract or provided by him in the case of a television programme service contract and to retain such recordings for a period of 30 days after the recording is made and to submit the recordings to the Commission, if the Commission so requires.

(9) The making of a recording by a contractor pursuant to a direction of the Commission pursuant to subsection (8) and the use by the Commission of any such recording exclusively for the purposes of its functions under this Act shall not constitute—

1. an infringement of the copyright in any work, sound recording or cinematograph film, or
2. an offence under any of the provisions of the Performers Protection Act, 1968.

(10) Without prejudice to the generality of subsection (8), the Commission shall have power—

1. to make such contracts, agreements and arrangements and do all such other things as are incidental or conducive to the objects of the Commission;
2. to acquire and make use of copyrights, patents, licences, privileges and concessions;
3. to compile, prepare, publish and distribute, with or without charge, such magazines, books and other printed material and such aural and visual material as may seem to the Commission to be incidental or conducive to its objectives;
4. subject to the consent of the Minister, to arrange for the provision of services with or without charge for and on behalf of any Minister of the Government by a sound broadcasting contractor or the television programme service contractor;
5. to require sound broadcasting contractors and the television programme service contractor to co-operate with the Garda Síochána, local authorities and health boards in the dissemination of relevant information to the public in the event of major emergencies.

(11) During the continuance of any emergency declared under section 10 of the Wireless Telegraphy Act, 1926, the Minister may suspend any licence issued under subsection (3) and, while any such suspension continues, the Minister may. operate any service which was provided under the suspended licence or require such service to be operated as he directs.

6.—(1) The Commission shall, in accordance with the provisions of this Act, consider every application for a sound broadcasting contract received by it pursuant to a notice under section 5 (5) for the purpose of determining the most suitable applicant, if any, to be awarded a sound broadcasting contract.

(2) In the consideration of applications received by it and in determining the most suitable applicant to be awarded a sound broadcasting contract, the Commission shall have regard to—

1. the character of the applicant or, if the applicant is a body corporate, the character of the body and its directors, manager, secretary or other similar officer and its members and the persons entitled to the beneficial ownership of its shares;
2. the adequacy of the expertise and experience and of the financial resources that will be available to each applicant and the extent to which the application accords with good economic principles;
3. the quality, range and type of the programmes proposed to be provided by each applicant or, if there is only one applicant, by that applicant;
4. the quantity, quality, range and type of programmes in the Irish language and the extent of programmes relating to Irish culture proposed to be provided;
5. the extent to which the applicant will create within the proposed sound broadcasting service new opportunities for Irish talent in music, drama and entertainment;
6. the desirability of having a diversity of services in the area specified in the notice under section 5 (5) catering for a wide range of tastes including those of minority interests;
7. the desirability of allowing any person, or group of persons, to have control of, or substantial interests in, an undue number of sound broadcasting services in respect of which a sound broadcasting contract has been awarded under this Act;
8. the desirability of allowing any person, or group of persons, to have control of, or substantial interests in, an undue amount of the communications media in the area specified in the notice under section 5 (5);
9. the extent to which the service proposed— (i) serves recognisably local communities and is supported by the various interests in the Community, or (ii) serves communities of interest, and
10. any other matters which the Commission considers to be necessary to secure the orderly development of sound broadcasting services.

(3) In considering the suitability of any applicant for the award of a sound broadcasting contract to provide a sound broadcasting service in respect of an area which includes a Gaeltacht area, the Commission shall have particular regard to the preservation as a spoken language of the Irish language.

9.—(1) Every sound broadcasting contractor shall ensure that—

1. all news broadcast by him is reported and presented in an objective and impartial manner and without any expression of his own views;
2. the broadcast treatment of current affairs, including matters which are either of public controversy or the subject of current public debate, is fair to all interests concerned and that the broadcast matter is presented in an objective and impartial manner and without any expression of his own views: Provided that should it prove impracticable in relation to a single broadcast to apply this paragraph, two or more related broadcasts may be considered as a whole, if the broadcasts are transmitted within a reasonable period of each other;
3. (c) a minimum of—
   
   1. not less than 20 per cent. of the broadcasting time, and
   2. if the sound broadcasting service is provided for more than 12 hours in any one day, two hours of broadcasting time between 07.00 hours and 19.00 hours, is devoted to the broadcasting of news and current affairs programmes; provided a derogation from this provision is not authorised by the Commission under section 15;
4. anything which may reasonably be regarded as offending against good taste or decency, or as being likely to promote, or incite to, crime or as tending to undermine the authority of the State, is not broadcast by him;
5. in programmes broadcast by him, and in the means employed to make such programmes, the privacy of any individual is not unreasonably encroached upon.

(2) Nothing in subsection (1) (a) or (1) (b) shall prevent a sound broadcasting contractor from transmitting political party broadcasts: Provided that a sound broadcasting contractor shall not, in the allocation of time for such broadcasts, give an unfair preference to any political party.

(3) The Commission shall draw up, and may, from time to time as occasion requires, revise a code governing standards and practice (hereinafter referred to as a code of practice) in relation to any matter specified in subsections (1) and (2).

(4) Whenever the Commission draws up pursuant to subsection (3) a code of practice relating to the matter in question every sound broadcasting contractor shall comply with such code and any revision thereof.

14.—(1) Every sound broadcasting contract may contain such terms and conditions as the Commission thinks appropriate and specifies in the contract.

(2) Without prejudice to the generality of subsection (1), the Commission may specify in a sound broadcasting contract all or any of the following terms or conditions:

1. the period during which the contract shall continue in force;
2. whether the contract may be renewed and, if so, the manner in which, the terms on which, and the period for which, the contract may be so renewed;
3. a condition prohibiting the assignment of the contract or of any interest therein;
4. if the sound broadcasting contractor be a company, a condition prohibiting any alteration in the Memorandum or Articles of Association of the company or in so much of that Memorandum or of those Articles as may be specified or prohibiting any material change in the ownership of the company;
5. a condition requiring the sound broadcasting contractor to provide the quality, range and type of programmes which he proposed to offer in his application for the award of the contract.

(3) If a sound broadcasting contract does not contain a condition of the type specified in paragraph (c) or (d) of subsection (2), the following provisions shall have effect:

1. a sound broadcasting contract, or any interest in a sound broadcasting contract, shall not be assignable, nor shall any alteration be made in the Memorandum or Articles of Association of any company which is a sound broadcasting contractor, nor shall there be any material change in the ownership of such a company, without the previous consent in writing of the Commission, and the Commission may, if it considers it reasonable so to do, refuse such consent;
2. in considering whether to grant its consent to an assignment of a sound broadcasting contract, a change in the Memorandum or Articles of Association of a company which is a sound broadcasting contractor, or a material change in the ownership of such a company, the Commission shall have regard to the criteria specified in section 6 (2) and, where applicable, section 6 (3).

(4) Every sound broadcasting contract shall—

1. provide that the Commission may, at its discretion, suspend or terminate the contract—
   
   1. if any false or misleading information was given to the Commission by or on behalf of the sound broadcasting contractor prior to the making of the contract,
   2. if the sound broadcasting contractor has, in the opinion of the Commission, committed serious or repeated breaches of his obligations under the sound broadcasting contract or under this Act;
2. provide that a sound broadcasting contractor shall pay to the Commission the fees, shares of profits or royalties specified therein;
3. provide that the sound broadcasting contractor shall provide such information (including copies of his accounts) which the Commission considers it requires in order to enable it carry out its functions under this Act.

(5) Every sound broadcasting contract shall be open to inspection by members of the public at the Commission's registered office and the Commission shall, on request made by any person and on payment of such sum (if any) as the Commission may reasonably require, furnish to that person a copy of that contract.

15.—Notwithstanding section 9 (1) (c), the Commission may authorise a derogation from the requirement in question in whole or in part in the case of sound broadcasting services which it contracts to provide in any area to meet specific special interests, provided it is satisfied that there is a reasonable plurality of sources of news and current affairs programming available to the public in question from other sound broadcasting services.

17.—The Commission shall, on being directed to do so by the Minister, invite applications for a television programme service contract for the provision of a television programme service which shall be distributed using channel capacity on wired broadcast relay systems and television programme retransmission systems licensed under regulations made under section 6 of the Wireless Telegraphy Act, 1926.

18.—(1) The provisions of Part III of this Act, other than sections 7, 8 and 15, relating to the powers, duties, functions, obligations and responsibilities of the Minister, the Commission and sound broadcasting contractors respectively, shall apply with respect to the television programme service contract entered into by the Commission and the television programme service provided under this Part, and any reference in Part III of this Act to a sound broadcasting contractor shall for the purposes of this Part be construed as a reference to the television programme service contractor.

(2) Notwithstanding the generality of subsection (1), section 9 (1) ( c ) shall not apply in the case of the television programme service provided under the television programme service contract.

(3) The Commission shall ensure that the television programme service provided under this Act shall in its programming—

1. be responsive to the interests and concerns of the whole community, be mindful of the need for understanding and peace within the whole island of Ireland, ensure that the programmes reflect the varied elements which make up the culture of the people of the whole island of Ireland, and have special regard for the elements which distinguish that culture and in particular for the Irish language;
2. uphold the democratic values enshrined in the Constitution, especially those relating to rightful liberty of expression;
3. have regard to the need for the formation of public awareness and understanding of the values and traditions of countries other than the State, including in particular those of such countries which are members of the European Community; and
4. includes a reasonable proportion of news and current affairs programmes; and the television programme service contractor shall comply with any requirements of the Commission in respect of such matters.

(4) For the purpose of ensuring compliance with subsection (3) the Commission shall ensure that a reasonable proportion of the programme service—

1. is produced in the State or in another Member State of the European Communities, and
2. is devoted to original programme material produced therein by persons other than the contractor, his subsidiary, his parent or existing broadcasting organisations.

Appendix VII: Broadcasting Act 2001

18.—The following provisions of the Act of 1988, namely— (a) paragraphs (a), (b), (d) and (e) of subsection (1), and sub-section (2), of section 9, and (b) section 10(3), shall apply to a broadcasting service which consists of a compilation of programme material supplied pursuant to a contract entered into under this Act with the following and any other necessary modifications—

(i) references in those provisions to a sound broadcasting contractor shall be construed as references to the holder of the contract concerned, (ii) references in those provisions to any thing being broadcast shall be construed as references to the thing being supplied pursuant to a contract entered into under this Act for the purpose of its being transmitted as part of a broadcasting service, and (iii) paragraph (d) of the said section 9(1) shall have effect as if the words ‘‘as offending against good taste or decency, or’’ were omitted.

19.—(1) The Commission shall, upon being directed by the Minister to do so and in accordance with the provisions of this section, prepare—

1. a code specifying standards to be complied with, and rules and practices to be observed, in respect of the taste and decency of programme material, the subject of a broadcasting service or sound broadcasting service, and, in particular, in respect of the portrayal of violence and sexual conduct in such material, and
2. a code specifying standards to be complied with, and rules and practices to be observed, in respect of advertising, teleshopping material, sponsorship and other forms of commercial promotion employed in any broadcasting service or sound broadcasting service (other than advertising and other activities as aforesaid falling within paragraph (c)),
3. a code specifying standards to be complied with, and rules and practices to be observed, in respect of advertising, teleshopping material, sponsorship and other forms of commercial promotion employed in any broadcasting service or sound broadcasting service, being advertising and other activities as aforesaid which relate to matters likely to be of direct or indirect interest to children.

(3) The Commission shall, in accordance with subsection (5), make rules with respect to—

1. the total daily times that shall be allowed for the transmission of advertisements and teleshopping material on a broadcasting service or sound broadcasting service, being a service which consists of a compilation of programme material supplied pursuant to a contract entered into under this Act or the Act of 1988, and
2. the maximum period that shall be allowed in any given hour for the transmission of advertisements and teleshopping material on such a broadcasting service or sound broadcasting service, and the Commission may make different such rules with respect to different classes of broadcasting service or sound broadcasting service.

38. (7) For the purposes of subsection (6), the Commission may require the person referred to in that subsection to furnish to it such information as it specifies with respect to the extent (if any) of—

1. any interest of a proprietary or financial nature held by him or her in relation to the provision of broadcasting services (including sound broadcasting services) in the State or the publication of any newspaper, magazine or journal in the State, or
2. the control he or she may exercise in relation to the provision of any such service or the publication of any such newspaper, magazine or journal, and if the person fails to comply with any such requirement, then the Commission shall not enter into a local content contract with him or her.

60.—Section 6 of the Act of 1988 is hereby amended by the insertion of the following subsections after subsection (3):

‘‘(4) In considering the suitability of an applicant for the award of a sound broadcasting contract, the Commission shall have regard to the overall quality of the performance of the applicant with respect to the provision by him of a sound broadcasting service under any sound broadcasting contract held by him at, or before, the date of the making of the application.

(5) Where the Commission decides to refuse to award a sound broadcasting contract to an applicant therefor, the Commission shall notify the applicant of the reasons for the decision.’

62.—The following section is hereby substituted for section 15 of the Act of 1988:

‘‘Derogation from 15. Notwithstanding section 9(1)(c), the Commission may authorise a derogation from the relating to news and current affairs requirement in question in whole or in part in the programming. case of a sound broadcasting service which a sound broadcasting contractor contracts to provide in any area, but only if it is satisfied that the authorisation of such a derogation would be beneficial to the listeners of sound broadcasting services in that area.’’.

Appendix VIII: Competition Act 2002

34.—(1) There shall, as soon as practicable after the commencement of this section, be entered into between the Authority and every one of the statutory bodies one or more agreements for the purposes of—

facilitating co-operation between the Authority and the statutory bodies in the performance of their respective functions in so far as they relate to issues of competition between undertakings,

avoiding duplication of activities by the Authority and any of the statutory bodies, being activities involving the determination of the effects on competition of any act done, or proposed to be done, and

ensuring, as far as practicable, consistency between decisions made or other steps taken by the Authority and the statutory bodies in so far as any part of those decisions or steps consists of or relates to a determination of any issue of competition between undertakings, and each such agreement that is entered into is referred to in this section as a ‘‘co-operation agreement’’.

Appendix IX: Bibliography

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¹ Mr. Callanan is a consultant in Irish broadcasting. He has worked for various organisations, including the Forum on Broadcasting Committee, RTE, Intermedia and Irish Examiner. Currently he is teaching Communications in Whitehall CFE and carrying out further research on multiplex broadcasting. He holds a research MA in Communications from DCU

² In 1973, Radio na Gaeltachta was broadcast throughout the country. RTÉ launched Cork Community Radio in the 1970s.

³ Radio Limerick was the first local station to have its contract terminated in Jan 1997. The multiple breaches of contract included unnotified changes in ownership and financial irregularities.

⁴ Dublin’s FM104 recently launched a new arts and entertainment programme on Sunday from 10a.m. to 12 noon. Dublin’s LiteFM has also started broadcasting a new arts and culture show every Sunday, 8a.m. to 10a.m.

⁵ Cross media ownership is defined as ‘a concentration of ownership on a cross-media basis (e.g. where one person or a small group owns or has a stake in a variety of media such as newspapers and television)’ (Department of Trade, Enterprise and Employment: 1999:http).

⁶ Capital Radio (later renamed FM104) was the first local radio station to launch in Dublin in 1989. North West Radio was the first provincial local radio station to begin broadcasting outside Dublin in 1989.

⁷ Century closed in 1991.

⁸ 103 North Cork, 103 West Cork and 96FM

⁹ UTV’s radio business in Ireland includes Live 95 in Limerick. It recently bought Lite FM in Dublin after the BCI blocked their bid for FM104.

¹⁰ BCI stated that Section 6 (2) (g) of the Independent Radio and Television Act 1988 permits the regulator to redefine an ‘undue number’ as being ‘equivalent to 15 per cent or less of the total number of commercial sound broadcasting services licensed under the Act’ (BCI, 2001a:http). The regulator would consider 15 to 25 per cent but any proposal for over 25 per cent would be rejected.

¹¹ The Broadcasting Media Sales group act as a sales agent for Galway Bat FM, Cork 96FM and Limericks Live 95FM.

¹² A media merger is defined in the Competition Act as ‘a merger or acquisition in which one or more of the undertakings involved carries on a media business in the State’ (2002:16).

¹³ This agreement is mentioned in the BCI assessment guide for 2003 local radio licences, (BCI, 2003b: Section 3(ix)).