"We will allow consolidation but will protect the local character of local radio," the culture secretary, Tessa Jowell, insisted at the head of last week's press release. In it, she revealed that she was giving in to pressure from the radio industry and was proposing to relax the "three plus one" rule on local market consolidation. A big deal? Or a small earthquake?
Previously, the draft Communications Bill said that there had to be three commercial radio owners plus the BBC. However, when the Bill is enacted, that will come down to two plus the BBC - although there will now be stricter rules on cross-media ownership in local markets and no commercial operator will be able to control more than 55 per cent of the radio market, as defined by a Byzantine "points" system.
According to some observers, this was merely a move to pacify elements of the radio industry who'd suddenly realised they weren't getting as much out of the Broadcast Bill as was being offered to TV - particularly as regards the green light being given for a single ITV. But the radio concession, they argue, won't have much practical impact. Others, however, believe the consequences could be far more profound.
In particular, it was ironic that Jowell chose to talk of protecting the local character of radio. Some media owners want consolidation precisely so that they can produce more cost-effective programming - more convergence where formats are concerned, more syndicated content and centrally imposed playlists. On the other hand, that in itself might be a good thing for advertisers, who are less than enthusiastic about "local character", if it is a euphemism for shambling amateurism.
But the greatest worry for the media business will be the effects of consolidation on the radio advertising market. Radio company bosses trotted out their well-rehearsed argument that a consolidated radio industry is a strong radio industry and a strong radio industry is in everyone's interests, not least advertisers. Which was fairly predictable.
Actually, the media owner response isn't universally predictable. Tim Schoonmaker, the chief executive of Emap Performance, came at this from a slightly leftfield angle. He maintains that this Government concession might not be as much of a concession as you'd think. "The real issue is one that hasn't really been addressed yet - largely because it has not been possible to address it yet," he argues. "The question is basically this - how will Ofcom behave as a competition regulator? Previously, this was the province of the Office of Fair Trading and look what happened when the OFT looked at the Capital-Virgin merger. Although the merger was legally permissible, the OFT said no."
He maintains that when Ofcom takes on the OFT's competition powers, it could act in exactly the same quirky manner. "We shouldn't get too excited.
We know that Ofcom will look at any deal of any substance but there's no policy document about the rules of engagement as yet and it won't even begin to become clear until an Ofcom chief executive is in place and that probably won't be for at least six months," he adds.
Morag Blazey, the managing director of PHD and the radio spokesperson on the IPA's Media Policy Group, agrees that it's possible for media owners to abuse local monopolies - it happens in the press medium, for instance.
And she struggles to see how consolidation will guarantee plurality.
But surely the bottom line is that radio is a substitutable medium? It doesn't wield the sort of market power that TV does. "Actually, radio recently got to the point in some instances where it was more expensive in cost-per-thousand terms than satellite television. It depends on what you are trying to do. But it's true, you can walk away," she says.
Jonathan Gillespie, the head of radio at OMD, tends to agree: "Radio will always be substitutable and this will have a bigger influence on sales policies than a bit of local might. Over-regulation has probably held investment in radio back more over the past ten years than hardened price positions. Of course, we want improving cost positions, but at the same time we still require strong station portfolios."
And anything that can help take the fight to the BBC has to be welcomed, he argues: "If we can believe the major operators, they intend to introduce more diverse services within a given region. As they will not want to cannibalise their own offerings, this diversity should lead to wider choice for listeners and, therefore, a greater chance audience can be taken from Auntie. The biggest disappointment over the past few years has been how commercial radio has been unable to combat a voracious public broadcaster. I fully expect to see the growth of more branded networks delivering lifestyle content in a cohesive manner."
All pretty optimistic stuff from media specialists. But do advertisers see it that way too? Guy Phillipson, the advertising manager at Vodafone and the chairman of ISBA's radio action group, states: "At ISBA, we have always maintained that the three plus one rule was probably equitable and works to maintain fair (advertising) rates. But given the way that the Communications Bill has gone generally, I can't say we're surprised. It's far more liberal than we expected."
But does he recognise that, when it comes down to it, radio is a substitutable medium? Actually, he's slightly sceptical about that one. He points out that radio now has a significant share of total display advertising revenue - and has legitimate ambitions of pushing that share towards 10 per cent. "In my market, on the retail side, it is a very hard medium to walk away from. The mix of local, regional and national coverage it offers is attractive for many marketing objectives. The only real alternative is press and you can't do the same things with your brand personality in press that you can on radio."
Phillipson does concede, however, there could well be an upside: "I can see the argument that fewer, bigger players can produce better programming and, as advertisers, it is in our interests to have better audiences more of the time."
And James Kydd, the brand director of Virgin Mobile, tends to agree that the consequences of the rule change are likely to be marginal. "Media monopolies are not good for advertisers but, in the context of the legislation as a whole, I don't believe that consolidation is the main issue. The main issue for me remains the fact that the BBC remains such a power, with five national stations funded by the taxpayer. No-one ever seems brave enough to tackle that issue and all we get is some tinkering round the edges," he concludes.