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Ofcom is planning to allocate a block of spectrum to a new national DAB multiplex, and three extra blocks of spectrum to local DAB multiplexes to fill gaps in current local digital coverage, which prevent approximately 11% of UK households receiving local stations via digital radio.

The new national block will accommodatie up to ten stations, after the regulator decided more choice in national digital listening was in the public interest. It has now received expressions of interest from three different radio companies or consortiums in the licence to operate the multiplex.

It said its decision is subject to the outcome of a regional radio conference on international spectrum usage in May 2006 and the vacating of the spectrum by existing users.

In confirming its plans, Ofcom rejected opposition from Digital One, which is the licence holder for the only national digital radio multiplex, and Digital One's 63% shareholder GCap Media.

In its response to Ofcom's consultation, Digital One submitted a report by Nera Economic Consulting, which questioned the adequacy of Ofcom's assessment of the impact of its plans on Digital One.

Ofcom disagreed with the criticisms and reiterated its belief that issuing a second national licence is not unlawful, contrary to Digital One's protestations.

A legal challenge was threatened in July by Ralph Bernard, chief executive of GCap, who argued that Digital One had been issued wits 12-year licence in 1998 on the basis that it would be the 'first and only' multiplex.

Today GCap said it was looking at its options, said in a statement: "It is unhelpful that this announcement has been made just two days before Christmas. However, we will now consider our position carefully before deciding on the next steps. As there is no appeals process in the regulatory framework, our only option may still be a judicial review."

Ofcom has now begun another consultation on how it proposes to apply the statutory criteria for awarding the multiplex licences under the 1996 Broadcasting Act. The award will be made on merit rather than via an auction process.

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