The Government should consider auctioning radio licences, according to a review carried out for the Department of Communications. John McManus reports.

Auctions would reduce the element of subjectivity involved in the current beauty parade approach and generate windfall revenues for the Government, according to OX Consultants, a Dutch firm that carried out the review for the Government.

The Broadcasting Commission of Ireland (BCI) is currently conducting beauty parades for two licences in Dublin.

A move to an auction-based system is one of four recommendations aimed at improving licensing procedures. The others include putting an executive of the BCI on the organisation's board to "ensure an adequate level of sector knowledge in the decision-making process".

OX also suggests a fast-track approach when an incumbent wants to renew its licence in the absence of a challenge from a competitor.

The final recommendation is that a non-judicial appeal mechanism should be put in place "to provide more legal certainty to applicants and stimulate more transparent decision-making". The body should not have the power to annul a decision, but could ask the BCI to reconsider decisions.

The consultants also looked at, and made recommendations about, maximising the use of spectrum for broadcasting. They suggest that the overall amount of spectrum has first to be established and gaps in the markets identified. "Based on the results of the audit and analysis of gaps, a licensing policy should be developed for packaging frequencies into licences," they state.

The other area considered by OX was the the introduction of a penalty points system for radio stations that did not meet their programme requirements as set out in their licences. If a station exceeded a number of points it would have its licence suspended or withdrawn. The penalty points would also have a bearing on the ability of an incumbent to use the proposed fast-track system to renew its licence.

The purpose of the rules on the ownership of radio stations also needed to be clarified, the report says. The current rule that no one can own more than 25 per cent of the total number of radio licences should be reconsidered in light of the size of the audience served by the station, audience shares and format.

Cross-ownership issues need to be seen in the context of the number of independent information sources in an area. "Clear guidance on the interpretation of an 'undue amount' of the communications media in relation to cross-ownership in an area is needed," according to OX.

The final recommendation in the report is that a special task force be established to look at the introduction of digital radio in Ireland. It would require input from the Department, the BCI and Comreg, says the report.

The Minister for Communications, Mr Ahern, said yesterday there would be a public consultation process, running until until September 30th.

"Not all available spectrum is being used. We owe it to the listener to ensure that the broadest range of programming is available. This could include specific licences for formats not covered or under-served by the existing mix of stations," he said.

The Minister - who has previously expressed interest in reducing profits made from the sale of radio licences - said the auctioning of radio licences might make sense in certain circumstances. "Radio licences give rights of use to highly valuable economic resources. Auctioning of such licences may be one suitable and fair way forward in licensing such national resources," he said.