Dissent clouds digital radio expansion

advancement. This is to save GCap's exclusive ownership of a digital
radio platform through its share in the Digital One national multiplex,
in which, Bernard says, the broadcaster has invested millions.

Media regulator Ofcom has now started what promises to be a Mexican
stand off between itself and Bernard, announcing that it would free up
more spectrum for a second national digital multiplex.

The reason for Bernard's disdain is what he sees as, effectively, a
broken contract between Ofcom and Digital One, which was financed by
Bernard's previous network, the GWR Group, in conjunction with NTL
(Profile, page 16).

A looming row centres around what Bernard insists was an exclusive deal
that was forged with Ofcom's predecessor, the Radio Authority, when the
multiplex was awarded in 1998. He claims any plans to set up new
national digital transmitters breaks this agreement.

Prime asset

With digital radio so high on the agenda - the number of Digital Audio
Broadcast (DAB) sets in the UK market was estimated to be three million
by the end of 2005 - coupled with the increase in audience listening to
radio stations through digital and satellite television and the
internet, it's no wonder Bernard wants to keep control of this prime
asset.

However, even the threat of a judicial review or High Court action has
not stopped Ofcom drawing up a prospective timetable. The timing
includes the setting of the parameters for the licence in April,
followed by the advertisement for applications in autumn, with the
licence awarded in spring 2007.

The regulator has addressed - some would say skirted - the issue of
exclusivity, by insisting the new multiplex will not be in direct
competition with the existing one, but has yet to qualify this
statement.

The question is how the regulator will manage to achieve more choice in
digital transmission without competing directly with Digital One's
network, which transmits the multitude of digital radio genres broadcast
by the commercial sector and the BBC.

An Ofcom spokesman said: "Any proposed line-up of services on a further
national multiplex should appeal to tastes and interests distinct from
those that are catered for by services on the existing national
multiplex." The spokesman did not rule out all competition between
services on the new multiplex and Digital One.

Bernard may struggle to maintain Digital One's grasp on sole rights, as
most in the industry believe that a national digital network will add to
the promotion of radio against other media. Howard Bareham, head of
radio at MindShare, says: "Anything that can add to national listening
opportunities for consumers is a good thing."

Simon Cole, chief executive of UBC Media, which owns spoken-word station
Oneword, says it is time for the radio industry to look at the bigger
picture when addressing the additional service. However, he has some
sympathy with Bernard. "I can understand GCap's frustration. They
believed they had what they thought was the only national digital
multiplex."

New medium

Cole's own station, Oneword, may face new competition with the creation
of a new multiplex. "From a selfish point of view, we can say we don't
want any more digital stations because that will cannibalise our
audience. But, you have to think slightly bigger than that - we are
promoting a new medium."

It's a sentiment echoed by Dee Ford, managing director of Emap Radio,
who sees any advance in national digital radio coverage not as an
indication of infighting and competition within commercial radio, but as
a fundamental tool in the fight to challenge BBC Radio dominance.

"It (a new national multiplex) can only be good for commercial radio,"
says Ford. "If we were all honest, we would say as long as there are
really strong radio stations being broadcast on multiplexes, then that
has to be good for commercial radio."

The war against the BBC may be top of commercial radio's agenda, but we
may also see a major skirmish, pitching commercial radio owners against
each other and against Ofcom.

EXTENDING DIGITAL RADIO

- Ofcom will allocate three blocks of VHF Band III spectrum to fill the
gaps in local multiplex coverage. This will provide the opportunity for
every part of the UK to receive local DAB Digital Radio services
(including both commercial and BBC local and national services) and will
allocate another block to a further national commercial multiplex.

The plans were announced as part of the Ofcom Radio Review released in
October, after a public consultation.

The media regulator has now published a consultation to seek views on
the licensing process for this additional local and national DAB
capacity. The criteria will include; the extent of the proposed coverage
area; a timetable for coverage roll-out and commencement of services;
ability to establish and maintain the proposed service.

Candidates must also appeal to a variety of tastes and interests
(national licences) and cater for local tastes and interests (local
licences); broaden the range of local digital radio services (local
licences); promote digital take-up (national licences); be involved in
"fair and effective competition".

Ofcom chief executive Stephen Carter says: "Additional capacity allows
more radio services to join television and telecomms in the transition
to digital."