2(1)Where—U.K.
(a)the IBA has, at any time before the transfer date, entered into a contract with a programme contractor for the provision by the contractor of local sound broadcasts in any locality, and
(b)the contract is effective immediately before that date,
then, unless the contract is one to which paragraph 2 in Part V of this Schedule applies (and subject to paragraph 1 in that Part)—
(i)the contract shall continue to have effect on and after that date (subject to and in accordance with this Part of this Schedule) as a contract between the Authority and that contractor and any other party to it, and
(ii)any reference in the contract to the IBA shall accordingly be construed, in relation to any time falling on or after that date, as a reference to the Authority.
(2)Section 2(3) of the 1981 Act shall have effect in relation to the programmes broadcast by the Authority in accordance with paragraph 1(1) above as if—
(a)any reference in that subsection to the IBA were a reference to the Authority; and
(b)the reference in that subsection to any such contracts as are there mentioned were a reference to contracts which continue in force by virtue of sub-paragraph (1) above.
(3)As from the transfer date the following provisions of the 1981 Act, namely—
(a)sections 19(1) to (2B) and 20(2) to (9),
(b)sections 21 to 25,
(c)sections 32 to 35, and
(d)Schedule 4,
shall have effect in relation to any contract which continues in force by virtue of sub-paragraph (1), or (as the case may be) in relation to the programme contractor under any such contract, subject to the modifications specified in sub-paragraph (4).
(4)The modifications of the provisions specified in sub-paragraph (3) are as follows—
(a)any reference in those provisions to the IBA shall (subject to paragraphs (b) and (c) below) be construed as a reference to the Authority;
(b)sections 21 and 23 shall have effect as if any reference to the IBA’s obligation to transmit the programmes supplied by a programme contractor were a reference to the right and the duty of the programme contractor under his contract to provide programmes for broadcasting in one of the services provided by the Authority as mentioned in paragraph 1(1) above;
(c)section 22 shall have effect as if any reference to the programmes supplied to the IBA were a reference to the programmes supplied for broadcasting in one of those services; and
(d)section 32(2)(a) shall have effect as if—
(i)for “the branch” there were substituted “ the part ”, and
(ii)for “section 36(2) in relation to that branch” there were substituted “ paragraph 12(1) of Schedule 8 to the Broadcasting Act 1990 in relation to that part ”.
(5)The Authority shall do all that they can to secure that, so long as any contract continues in force by virtue of sub-paragraph (1), neither the programme contractor under the contract nor any associate of his—
(a)holds any local licence, or
(b)controls any body which holds any such licence, or
(c)is a participant with more than a 20 per cent. interest in a body corporate which holds any such licence,
in a case where the area or locality for which the licensed service is to be provided is to a significant extent the same as the locality for which local sound broadcasts are to be provided under the programme contractor’s contract; and this sub-paragraph shall be construed in accordance with Part I of Schedule 2 to this Act.
(6)The Authority may make such variations of a contract which continues in force by virtue of sub-paragraph (1) as appear to them to be appropriate in consequence of any of the provisions of this Part of this Schedule.