Classic FM was granted the first commercial nationwide radio license in 1990, and started transmissions in 1992. Changes in the 1996 Act saw Classic FM pay over £1.5m a year to the Treasury, but for the next 5 years, the station will pay less than £1,000 a month.
The 1990 Act which permitted the creation of Talksport and Classic FM required sealed auction bids for all licence renewals. Classic FM is estimated to gross £20m per year in revenue for its owner, but now needs only pay £10,000 per year. More significantly, the previous requirement to 6% of revenue to Ofcom has been scrapped.
The Digital Economy Act of 2010 changed the 1990 law, permitting stations a cheap renewal. The Carter Report that floated the policy cited uncertainty about the future of radio as the justification for the incumbent-friendly change. Ofcom justified lack of an auction by saying that auction wouldn't attract any bidders - so why should they bother holding one?
Why then should we pay the salaries or pensions of the people who allowed this to happen?