The Broadcasting Commission has to decide which of the five applicants will ultimately become the licence holder for the new Dublin station, writes Una McCaffrey

When the Broadcasting Commission of Ireland (BCI) sits down for its next meeting on Monday, the main item on the agenda will be the awarding of two new radio licences for Dublin, with the commission expected to draw up a short-list of applicants in both cases.

The first of these - the multi-cultural licence - is unlikely to cause much of a headache, since only two groups submitted applications.

The second - the alternative rock music licence - however is likely to give rise to significantly more head-scratching for the BCI's members.

Five applications have been received in this case, with each presenting the BCI with many good reasons for selection.

The problem of course is that the BCI's idea of a good reason may not quite accord with that of other people.

It is here that the application process takes on a particular appeal for spectators; expensive applications are made - essentially, in the dark - with only the BCI knowing for sure who or what has the qualities that can win the day.

The level of interest in this licence - a rare chance to legitimately tap into Dublin's radio market - is particularly instructive. All five applications are backed by the heaviest of financial hitters, with all five putting a immense amount of effort into trying to give their application the edge.

The brief provided by the BCI is vague in this respect, with the commission offering little or no guidance on the precise nature of the station it would like to see emerging at the end of the process, aside from saying it should play alternative rock.

This leaves the applicants to determine this for themselves, and then to tailor their applications to fulfil the space they have identified. In doing this, the applicants automatically take risks with submissions by forcing themselves into corners.

This could involve something as basic as the percentage of the programming they dedicate to non-mainstream alternative rock, or as complicated as how exactly they intend to bring the station to profitability.

In the view of one applicant - XFM Dublin - this latter question merits a very clear answer. The consortium backing the proposal believes that the new licence will never make money unless it can leverage off an existing station.

Funnily enough, UTV, which is providing all the funds for the XFM application, already has another station in Dublin in the form of Q102 (formerly Lite FM).

Mr Scott Taunton, UTV's group business development director, is adamant that the new station will not work on its own. Understandably, his view is firmly backed by XFM managing director Mr Graham Bryce, who is taking a hands-on interest in the Dublin application, even though XFM has pledged no capital to the endeavour.

"This business will not work as a standalone," says Mr Bryce definitively. He points to XFM's experience in London, where the station has about 560,000 listeners - a 5 per cent market reach.

XFM started independently but failed to thrive until the plc power of Capital Radio was placed behind it. A handful of years after the acquisition, the station finally "makes sense financially". The bottom line, says Mr Bryce, is that a niche station needs infrastructural support. This would see XFM Dublin sharing, for example, a sales team and a financial controller with Q102.

The Raw consortium, which is backed by 98FM owner Mr Denis O'Brien, takes a similar view on tapping into existing infrastructure.

Other applicants are aiming to go it alone, hoping that the BCI, which prefers a broad ownership of radio assets, will take a dim view of any other approach.

Mr Bryce argues that an element of concentration of ownership can actually be good for the alternative format because it will avoid forcing any one station in a given stable towards the mainstream.

The shared format has worked well for XFM in London, which occupies the same building as other Capital stations and leverages off Capital financial infrastructure.

It's all about "cross-fertilisation", in Mr Bryce's view. The BCI will hopefully see that the UK market is "littered" with well-intentioned but poorly backed failures, he says.

In other words, UTV and Capital are hoping that the BCI will share what they see as their pragmatic view of the market. Otherwise, they argue, the BCI will run the risk of awarding a licence to a consortium that does not have the wherewithal to support the station through teething troubles.

"Whatever it takes to build the brand, we will support it," according to Mr Bryce.

It would, however, be hard to argue that the other groups vying for the licence could not do the same. The Phantom application, for example, is backed by the deep pockets of Mr Paul McGuinness and Mr Denis Desmond. Zed has Sir Bob Geldof and Aiken Promotions, while Raw has the aforementioned Mr O'Brien. Radio Eleven meanwhile has, among others, property developer Mr Johnny Ronan.

"Each of the bids brings its own benefits," says Mr Taunton diplomatically. He goes on to suggest that Phantom has a "strong chance" of winning, but expresses "outrage" at the idea that this could come to pass.

Phantom's past as a pirate station is the stumbling block for Mr Taunton, although the BCI may not share this view. Phantom has, after all, been operating legitimately in the past couple of years with a temporary weekend licence. Rather than the pirate past weakening the consortium's case, this experience could, some say, actually push the proposal over the line - just as the standalone argument could work in UTV or Mr O'Brien's favour, depending on your perspective.

The Radio Eleven consortium is particularly vocal on this latter issue, claiming that concentration of ownership will not be good for radio or the public.

The group suggests that current licence holders are unlikely to "risk damaging their cashgenerating stations to make this station the success it needs to be".

The argument makes sense on one level but wears thin on another, with the nature of the interest in the new station suggesting that some smart people believe serious money can be made in Dublin radio.

In this instance, the cash is in young males who listen to fashionable rock music but tend to be hugely difficult for advertisers to reach through other media. In London, for example, XFM claims to sell advertising and sponsorships at a premium to other stations by offering a 70 per cent ABC 1, 70 per cent male mix.

The €26 million value ascribed to FM104 (admittedly not a niche station) by Scottish Radio Holdings last year suggests that the radio spectrum is indeed a valuable one, with a Government-commissioned consultancy report finding that the valuation was fair.

This report - compiled by Ox Consultants - aimed to discover how best the Government could "optimise the proceeds of the public good" that is radio space.

Among the suggestions made is the introduction of an auction format, which would do away with beauty parades for licences where the State suspects that groups winning licences for free could be in line for a massive capital gain just a few years later.

The Government has asked the public to consider and respond to this and the rest of the Ox report before the end of this month. Whatever changes might ensue will be too late for the latest licensing round, which promises to hot up significantly in three days.