John Myers, the ex-chief executive of GMG Radio, is leading an independent review of local radio as part of Carter's work, which will feed into the final Digital Britain report expected to be published in early June.
In Myers' review, which industry figures have praised as "straight- talking", there are expected to be as many as 20 recommendations, ranging from the future of local radio to DAB.
Myers' report is expected to divide radio stations into five different bands based on how large their transmission area is: national, regional, big local, small local and community.
Larger stations will be expected to commit to broadcasting on national DAB and investing in locally produced news. It is expected that stations in the three smaller categories would be allowed to co-locate with greater ease to reduce costs.
According to a senior radio executive: "Myers strongly believes in local news. However, he will argue that, as long as the news is local, it doesn't have to come from a local, local base - several tailored news feeds can come from one big building in the nearest major region."
Another senior radio source said: "Approximately 75% of all big and small local stations are unprofitable at the moment. Something needs to change. I just hope the Government and Ofcom listens to Myers' review."
Among his anticipated suggestions for the future of DAB, Myers is expected to recommend that the BBC funds the bulk of the cost of the extra transmitters needed to extend national DAB coverage from its current 80% to more than 90%.
The Department for Culture, Media and Sport declined to comment. Myers was unavailable for comment.
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