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After the controversial return of a licence to Ofcom from a radio company struggling to maintain a small local station, industry leaders have started to become more vocal about the need for change in the regulator's restrictions on output. In one of his first pronouncements, the RadioCentre's new chief executive, Andrew Harrison, said last week that he intends to lobby Ofcom on station formats and programming rules.

The regulator claims it is "mindful of the pressures on smaller radio stations" and will be inviting stakeholders to comment on proposals being released in January.

So what changes do the struggling station owners want to see if their lives are to be made easier?

William Rogers, chief executive of UKRD, the company that handed its Stroud licence back to Ofcom, claims restrictions made the station "simply uneconomic".

Star 107.9 was prevented from broadcasting from the premises used by UKRD's nearby Cheltenham station, as Ofcom rules state stations must deliver their programmes from within their licence area. Rogers also complained of signal strength for the station being "absolutely pathetic", to the extent that people living near the transmission point could not tune in.

Onerous regulations

"The regulations were not allowing the business to make the kind of decisions it needed to in order to be viable," he said.

Rogers wants Ofcom to allow more than one station to transmit from the same place.

Kevin Stewart, chief executive of Tindle Radio Limited, operator of nine local commercial stations in the UK, Ireland and the Channel Islands, is calling for more flexibility to allow companies like his to network regionally - broadcasting the same output to a number of stations in the same area.

He said: "There needs to be more leeway in interpreting the formats to help stations which are transmitting to areas that just aren't big enough and where there is competition.

"I'd like to see more co-location and I get the impression from Ofcom that change is something that's imminent."

The concensus from most operators is that Ofcom's January proposals will allow networking and sharing of premises. Should the regulator decide not to loosen regulations, Stewart predicts that radio owners will take a tougher stance, with more licences handed back. Radio companies have less to lose now that most FM airspace has been allocated and only a handful of licences are left to bid for.

Shaun Gregory, media advisor to Australian investment bank Macquarie, believes the rules should change, but has nothing but praise for the way that Ofcom is managing the process.

He says the industry itself has been slow in articulating a new framework for radio.

"A lot of people knock Ofcom, but I'm not one of them," he says. "For what it's worth, I think it's doing a great job. Of course things should change and there should be less regulation, but it has gone out there with open arms inviting people to comment and shape the future of radio and the industry hasn't been good at listening."

Michael Betton, chief executive of the Lincs FM Group, has appealed to Ofcom for extra flexibility in format change for smaller stations and fears if changes are not made many communities will be left with no station at all.

Digital future

Fru Hazlitt, Virgin Radio's chief executive, agrees there should be more flexibility, but her focus is on the digital future. "The digital landscape is much less regulated, so if one assumes that all radio listening will eventually be digital then we are moving towards less strict regulation anyway," she said.

It would seem the industry as a whole is agreed on the fact that Ofcom must make changes. But it is widely predicted that, as with TV, the analogue radio signal will eventually be switched off. If so, these concerns will surely be a thing of the past before very long

OFCOM RULES

All radio licensees are required to abide by the terms of Ofcom's Broadcasting Code

- They must also comply with their format - the description of their programme service and the basis on which the licence was awarded

- Where a station is required to provide locally-made programming, Ofcom states its studios should be located within its licensed area, although requests for co-location are considered on a case-by-case basis, taking in such factors as format obligations, financial impact, output impact and operational needs

- Ofcom's Broadcasting Code, which came into effect in July 2005, included permission to transmit "challenging material, even that which may be considered offensive by some" provided it is editorially justified

- Ofcom also deregulated sponsorship and commercial references, while assuring editorial independence was maintained. The ban on product placement remained in place and it was stressed children must be protected by appropriate scheduling.