Peter Baldwin, chief executive of the Radio Authority, which is charged with expanding UK commercial radio, said yesterday that he would be discussing with members what to do about the franchise for a third commercial national station, which has to be speech- based under the terms of the 1990 Broadcasting Act.
Mr Baldwin said the question was whether the authority should advertise this franchise in early autumn so that its operators can upstage the BBC. Commercial radio has always prided itself in leading the BBC to change. Delegates at this week's Radio Academy Convention were stunned by the BBC's announcement.
The danger for the Radio Authority in rushing is that it could spoil the chances of success for Classic FM, the light classical music station which starts in September, and the rock station being set up by TVam and Virgin called Independent Music Radio, which launches early next year.
Radio income from advertising is stuck at 2 per cent of total advertising revenue and is very much a poor relation to commercial television.
Mr Baldwin said the authority's members had been divided on the timing of the third channel. It must go to the highest bidder and it could go to an operator wanting to provide a phone-in, talk-based service. A key deficiency of the Broadcasting Act is that it did not give a quality threshold for radio services.
It appears that the BBC's decision arose after Tony Hall, director of news and current affairs at the BBC, and consultants McKinsey, who are helping with the BBC's charter review, together convinced the governors that a rolling news service was part of the BBC's essential public service obligation and that a decision was needed before the Government's Green Paper on the BBC was published in September.
John Perkins, managing director of Independent Radio News, which supplies news bulletins to Britain's commercial radio stations, told the conference in Birmingham: 'There is a huge yawning gap in the news coverage of commercial radio which a national news channel would fill.' He said that north of Watford there was no commercial channel supplying this need.
It also emerged at the conference that ITN is expected to rescue the IRN service in a deal to be announced next week. It would relocate the commercial newsgathering network at ITN's Gray's Inn Road headquarters. Until now IRN has been supported by the ailing Crown Communications group, which runs London's LBC services. ITN is also seen as a keen potential bidder, perhaps in a consortium, for the national commercial talk-radio station.
Jenny Abramsky, head of BBC Radio news and current affairs, yesterday said that its new service would include business news, sport and coverage of the European Parliament, as well as the British Parliament. It would also try to reflect more regional news. She said the BBC had unrivalled staff but they were frustrated by being denied airtime.
She pointed out that when Rajiv Gandhi was assassinated at 7pm, listeners had to wait until the 10pm World Tonight for full reports. Robert Maxwell's death was reported at 3.10pm but had to wait for a 4pm news summary. When Sir Geoffrey Howe resigned at 7.20pm she said that Sky News and LBC had been discussing it for hours before the BBC caught up.
Ms Abramsky said that BBC listeners were getting the worst of both worlds - they do not know what to expect and they get disrupted programmes.
She said that the BBC had also learnt the lesson of being addicted to speculation and the dangers of rambling in its continuous Gulf FM coverage during the Gulf war. The news service would not be like that because it would not be a single-issue channel.
Delegates to the conference also expressed fears that the new station will leave Radio 4, the BBC's flagship, shorn of listeners and denuded of key factual programmes, such as Analysis. There is expected to be a tug of war over the fate of key programmes.