CAP Clean Air

RNS No 5182t                                       
RADIO AUTHORITY
17th July 1997                                       

                                                                              
         PROPOSED ACQUISITION OF VIRGIN RADIO BY CAPITAL RADIO
                 RADIO AUTHORITY ANNOUNCES PRELIMINARY
                    PUBLIC INTEREST TEST ASSESSMENT

The  Radio  Authority  has today (17 July) announced  its  assessment  of  the
plurality and diversity criteria in relation to the public interest test which
it  has  conducted  into the proposed acquisition of Virgin Radio  by  Capital
Radio.  The  acquisition would give Capital Radio three  licences  in  London:
Capital  FM,  Capital Gold (AM) and Virgin FM, in addition to one national  AM
licence.

Having  sought  and  received specific and binding undertakings  from  Capital
Radio  re-inforcing the diversity of output, the Authority sees no  reason  in
terms  of  plurality  of  ownership or diversity of  output  to  disallow  the
acquisition  on the grounds of public interest as defined by the  Broadcasting
Act 1996.

However,  under  the Broadcasting Act 1990 the Authority  also  has  an  over-
arching  responsibility  for ensuring fair and effective  competition  in  the
provision  of  radio services. Since the Office of Fair Trading  is  currently
conducting a detailed investigation into the competition implications  of  the
proposed acquisition, the Authority will make no final determination until the
decision  of  the  President of the Board of Trade is known.  The  Authority's
determination will be published in full at that time.

The  Authority  conducted  a radio-specific public  interest  test  into  this
proposed  acquisition, seeking public comment on 13 May 1997, with  a  closing
date of 11 June 1997.  Forty-three submissions were received.

As  a  result  of  its deliberations, the Authority sought undertakings   from
Capital  Radio  that  it  would ensure that the  news  broadcast  on  Virgin's
services  would  be  separately produced and separately  presented  from  news
broadcast  on Capital's services; and that there should be separate  newsrooms
for  Capital's  and  Virgin's London services. These  undertakings  have  been
given.

The  Authority  will also amend the Promise of Performance for  Virgin  FM  to
limit  to 20% of total output the amount of alternative rock and related music
in  that  station's  output and to prevent any sharing  of  local  programming
between  the services. The Authority has also received assurances from Capital
Radio that any re-launch of the Virgin FM service would not be promoted before
Christmas 1997 at the earliest.
                                       
NOTES TO EDITORS

1.    Under paragraph 12(2) of Part III of Schedule 2 to the Broadcasting  Act
 1990 as substituted by the Broadcasting Act 1996, a company can only own three
 Independent  Local  Radio  licences in a single  area  if  the  Authority  is
 satisfied  that  this  could not be expected to operate  against  the  public
 interest.  In  this respect, the public interest criteria  are  plurality  of
 ownership  and  diversity in the range of programmes and in  the  sources  of
 information and opinions available to the public.

2.    The  Broadcasting Act 1990 (section 85(3)(b)) gives the Authority  over-
 arching responsibilities for ensuring fair and effective competition  in  the
 provision  of  radio services, and the Authority's considerations  have  been
 informed by this general duty. However, unlike the cross-media public interest
 test, where the criteria to be examined specifically include the operation of
 the market and economic benefits, the radio specific public interest test has
 no specific competition criterion.
                                       
3.   The acquisition would come within the 15% (110.6 points) ceiling of radio
 ownership points permitted under the Broadcasting Act 1990. Currently there is
 a  total of 737.33 points in the system (Capital 65.67 points = 8.91%; Virgin
 31.67 points = 4.3%; Capital plus Virgin 97.34 points = 13.21%).

4.     The  Radio  Authority  is  responsible  for  licensing  and  regulating
 Independent  Radio  in  accordance with the  statutory  requirements  of  the
 Broadcasting  Acts  1990  and 1996.  It plans frequencies,  awards  licences,
 regulates  programming  and advertising, and plays  an  active  role  in  the
 discussion  and  formulation of policies which affect the  Independent  Radio
 industry and its listeners.

Contact:  Tony Stoller        0171 405 7051
          Tracey Mullins      0171 405 7058
          Marion Shelley      0171 430 2724


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