A transition from FM to DAB will cost close to NOK 1 billion.
A local FM broadcasts ban by 2021 would reduce media pluralism, according to the media authority Medietilsynet. In a report commissioned by the Ministry of Culture, it is recommended that the 198 local radio stations, both commercial and community radio, may continue on FM for another five years. The future of local radio has involved many Norwegians. The Media Authority has received views from over a hundred organizations, stakeholders and listeners in connection with the work on the report. But now the ball is at Stortinget - the parliament -which will take a decision soon.
The media authority, however, wants to introduce "significant limitations" for local radio on FM in Oslo and three other major cities, where it is only allowed to broadcast non-commercial community radio since 2018. Advertising should be completely banned on FM in these areas. Nor will there be any new local FM permits in the metropolitan areas, if the politician will follow the authority's recommendation.
Outside the metro areas, the current rules are retained. It also opens for new FM licenses, at least in those areas where there is no local DAB broadcasting.
Among other things, we have looked at the importance of local radio for media pluralism, how far the digitization process has come, the economic situation in the industry and valued obstacles which may exist for the local radio transition from FM to digital radio (DAB). Our advice is that FM licenses for local radio stations should be extended by five new years after 2021, says Mari Velsand, head of Medietilsynet.
Medietilsynet justifies its conclusions that the DAB expansion is not fully implemented. 10 out of 37 regions and 42 per cent of the population lack local DAB radio. Many local radio operators also lack the financial conditions to manage a transition to DAB.
According to the media authority, it costs NOK 750,000 (72.000 euro) to set up equipment for DAB and additional operating costs of NOK 9,000 (860 euro) per month are added. This becomes particularly expensive for stations that cannot share the costs with other stations in the same area.
According to a consultancy report commissioned by Medietiksynet, a transition of all local radio from FM to DAB would cost close to NOK 1 billion (900 million euro).
Comment and analysis
There is already wide support in Stortinget for local radio to continue on FM. Right now, a proposal from the Center Party is on the table for an extension of the FM permits to 2031. This is the same year that the DAB licenses expire. Stortinget decides on the issue on June 11, 2019. Stortinget will ultimately decide whether the FM extension will be five or ten years.
The two foreign radio groups Bauer and NENT are attempting to get rid of commercial competition on FM in the four metropolitan areas. In particular, the focus is on getting rid of the competition from Radio Metro in Oslo. In its latest quarterly report, NENT has reported that radio advertising is down in Norway (DAB) as opposed to its market in Sweden (FM).
The proposed ad ban on FM in metro areas is a threat to minority community broadcasters. The Media Authority's new recommendations that local radios in big cities should not be able to make money could mean the end of Radio Latin America and Radio Inter FM, explains Hans Dahle station manager of the Spanish language broadcaster in Oslo..
The question now is whether the politicians can continue to support the move to force the Norwegians from FM to DAB. Instead they should consider if the choice of radio platform should rather be guided by the citizens' needs and consumer demands in a free market.
According to Statistics Norway, only half the population listens to radio in 2018. 38% of the population listens via DAB. One third of the population has not yet acquired a DAB receiver. However, 90% of the population over the age of 12 own a smartphone (which cannot receive DAB radio).
Read more at lokalradio.no (in Norwegian):
MP proposal by Åslaug Sem-Jacobsen et al (Center party) about prolonged broadcast concession for local radio on FM (in Norwegian).