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Tuesday, 24 February 1987
Page: 587


Mr DUFFY (Minister for Communications) —by leave-Honourable members will recall that on 22 August 1986 I tabled three important documents relating to broadcasting in Australia. The first, a report by the Forward Development Unit of my Department on `Ownership and Control of Commercial Television', remains open for public comment until 31 March 1987 although honourable members will know that the Government has already taken some important decisions on matters discussed in that report. I intend to introduce initial legislation on cross-media ownership and related matters later in the autumn sittings.

The second document, a draft indicative plan for equalisation of regional commercial television, has since developed into a final indicative plan and the relevant legislation is now being considered by a Senate select committee. I hope that body completes its work quickly so that regional Australians may look forward confidently to enjoying television services as good as those enjoyed by their cousins in the capital cities.

Today, I want to announce government decisions on the third document I tabled in August, the Forward Development Unit's final report entitled `Future Directions for Commercial Radio', as well as on the FDU's interim report on the possible conversion of AM radio licences to FM. Apart from announcing decisions on the FDU's radio reports, I will announce a program to plan over the next three years additional commercial radio services to nearly 30 areas outside the mainland State capital cities. And by the time planning is under way in the first of the areas I announce today I will be able to announce services to be planned in later years. I will also give details of streamlined planning procedures developed in my Department which will help to bring new services on line as quickly as possible.

To commence the program, I shall call in April this year for applications from people interested in providing new, competing services on FM in Geelong, the Gold Coast, Gosford and Shepparton. At the same time, I will refer to the Australian Broadcasting Tribunal supplementary licence applications from 8HA Alice Springs and 2VM Moree. I have also recognised the need for a new commercial radio service to the West Moreton area, based on Ipswich, and I will make a further announcement on this market in the middle of the year.

Streamlined Approach

I turn now to the details of this initiative. The Government wants to speed up the delivery of new commercial radio services to regional areas, and to do so by introducing competing services wherever possible. It is clear that some areas or markets are capable of supporting new and competing services. It is just as clear that other areas cannot support competition. With that in mind, we needed to find a way of speeding up the provision of additional services. This meant streamlining the planning and inquiry process as far as possible. It is widely agreed by the industry, including potential licensees, that it is unnecessary to burden all areas with all stages of the often costly and time-consuming ABT inquiry process. We also intend to make our service planning run more smoothly.

Accordingly, we are not asking interested groups to submit lengthy and expensive planning proposals. Instead, we will just ask them to comment on draft service areas and draft technical specifications released by my Department. This approach will enable us to move quickly to invite applications. Thus, before calling in April for formal applications for the new services in Geelong, the Gold Coast, Gosford and Shepparton, I shall be asking interested parties in these areas to provide comments to the Department of Communications on the draft service areas and technical specifications which I shall table today.

I have a statutory obligation to consult licensees as I plan the development of broadcasting services but I want to hear also from prospective licensees and members of the public. The documents I intend to table give more details of the planning program and procedures for new services.

Competition

The streamlined approach to planning will work differently according to whether an area, or market, seems prima facie able to support a new, competing service. In markets where it seems to me prima facie that competition can be supported, the crucial choice which needs to be made is among the various applicants for the new licence. In these areas I shall dismiss applications received from the existing licensees for a supplementary licence. Section 82a (4) (b) of the Broadcasting Act gives me the power to dismiss supplementary licence applications for a reason to do with `the planning or development of broadcasting services'. It will then be necessary in these areas to hold an inquiry into the grant of a supplementary licence. Instead, I shall invite applications for new licences and the Tribunal will hold hearings to decide which new applicant should be granted the licence.

In areas where there is doubt whether competition can be supported, the ABT inquiry process will continue, although the Government has decided to have the Broadcasting Act amended to clarify my powers relating to inquiries. This legislation will ensure that it is possible for me to have the ABT consider simultaneously the claims of supplementary licence applicants and potential new operators-rather than have to hold successive inquiries-and it will be a significant improvement.

Thirdly, in areas where it seems clear that competition cannot be supported current inquiry procedures will continue for the time being. I am concerned to give applicants for competing services, even in relatively small markets, the opportunity to have their cases heard. Our presumption all along has been in favour of competition and this remains the case. But if current procedures do not produce new services smoothly over the next two years, we will consider legislation to allow for the automatic grant of supplementary licences in these areas.

Finally, I have asked my Department to look at ways in which listeners in small and isolated areas now receiving only one commercial service can be given additional services. This examination will consider, for example, the provision of services through remote commercial radio services-RCRS.

Priority Areas

The planning program for the first three years-both the areas nominated and the sequence-has been developed by looking at whether a frequency is available in the area-or soon will be when television frequencies are cleared from band II-and by looking at demand for FM services. We have also taken into account the results of extensive consultations with industry, together with the nearly 50 submissions received on the FDU reports. This material covers everything from technical specifications to projected revenues.

Of the areas on the program for 1987, Geelong has a current 1987 service area population of 240,000 which makes it the most populous area with only one local radio station. The Gold Coast with 220,000, Gosford with 200,000, and Shepparton with 145,000, are not far behind. Bringing commercial FM services to these four areas alone will benefit over 800,000 people. Supplementary licence applications in these areas will be dismissed and the ABT will consider the claims of the independent applicants. We are thinking also of smaller areas-areas where it seems unlikely that competition can be supported. I will soon pass on to the ABT the supplementary licence applications from Moree, 46,000, and Alice Springs, 25,000. Information from hearings in these relatively small markets will be useful both to me in my planning role and to intending applicants for competing licences in similar markets.

Market Groups Approach

I want also to refer to government decisions on a number of approaches canvassed in the FDU's final report. A planning approach outlined in this report has been adopted by the Government because it promises to achieve the streamlined approach we are looking for. Under this approach I shall allocate markets into groups as follows:

Group A: Markets where I find a prima facie case that a new, competing licence would be viable;

Group B: Markets where I am in doubt;

Group C: Markets where I am satisfied that a new, competing licence would not be viable; and

Group D: Markets so isolated and/or small that special measures must be taken.

It will not be possible to develop this approach fully until I have more information about the circumstances of particular markets. Thus I have not yet attempted to allocate the 1987, 1988 and 1989 markets into groups.

I shall be seeking from the ABT financial information on individual markets to assist me to place them into groups and I shall announce allocations for each 1988 and 1989 market when I announce the calling of applications. I recognise the sensitivity of financial information and I undertake that it will not be used in any way that publicly identifies the performance of individual stations.

Finally, I stress that allocations to market groups will be prima facie only. The Tribunal will still make the final decisions on independents or grant the supplementary licences. It is quite open to it to make a decision about a market which does not accord with my prima facie judgment about that market. That is its right as an independent body.

Service Areas

It might be necessary in some cases to determine service areas for new services which differ from those of existing AM stations. In looking at this question we have been conscious of the important role which regional radio stations play in bringing local programs to local people. New interests in the industry want to play a similar role. I recognise the concerns of existing licensees that significantly larger new service areas could take away some national advertising revenue from the existing service-although I do not believe it is beyond the wit of imaginative managements to meet this challenge.

It seems unnecessary to devise a different ser- vice area for the new service where the existing service area is quite capable of supporting competition. Thus, different service areas for new services will be proposed in future only where, firstly, it is not possible for the existing service area to support competition and there is no application for a supplementary licence, or, secondly, where existing service areas overlap substantially. It will still be possible, as it is at present, for existing licensees to seek to vary their service areas if they wish to take this approach to meet competition. I am aware of the time which can be taken up in negotiations between my Department and licensees or potential licensees over service area boundaries. This is why I have decided to nominate draft service areas when calling for applications. It is, of course, open to interested parties to nominate a proposed service area for consideration. Likewise, minor differences between existing and new service areas might be proposed for technical reasons.

Other Decisions on FDU Report

There are some other government decisions on the FDU report which I wish to announce today as well. It is not possible or sensible to consider in isolation from other questions of media ownership such matters as whether to remove or relax the prohibition on owning more than eight radio stations. Possible modifications to the ownership and control rules in radio will be taken up as part of the current study of ownership and control, particularly cross-media matters, being undertaken in my Department. Similarly, the possible need for a review of the viability provisions of the Broadcasting Act and for revision of the provisions relating to the confidentiality of financial information will be taken up as part of a continuing review in the Department of the role and powers of the ABT.

The FDU report raises the possibility that it might be necessary to categorise licences by program format or introduce some other means to ensure diversity of program choice if diversity did not follow the introduction of new services. I would much prefer to leave programming to station managers and their view of the market and leave regulation to the ABT and its monitoring of adequate and comprehensive services. This Government will steer well clear of any other approach.

AM/FM Conversion

Finally, I want to address issues raised in the FDU's interim report on the possible conversion of AM licences to FM. I have some sympathy for the argument that regional AM stations competing head to head with a new FM station should be able to convert to FM, provided this does not lead to loss of service to audiences of the previous AM service. However, my first priority is provision of new services.

Any decisions on conversion will be influenced by the capacity for high power services, to be identified in the national VHF-FM radio frequency allocation plan, and by the demands for FM frequencies from each of the broadcasting sectors. These considerations apply also to conversion in metropolitan areas. When we know how many frequencies are available in metropolitan areas under this plan, it will be possible to make a decision for these areas, too. In some cases, however, the availability of frequencies may depend upon the clearance of band II. I will be in a position by the end of March to announce a final timetable for the first three years of band II clearance.

West Moreton-Ipswich

While our main concern has been to provide additional commercial radio services, it has come to our notice during this process that there are some quite populous areas which have no service at all. The public responses to the FDU report have shown evidence of a significant area of inadequate radio services in the West Moreton region, around Ipswich. While Ipswich itself receives some services from Brisbane there are some 50,000 people in the rural areas north and south of Ipswich who have lacked a technically adequate commercial radio signal since the old Ipswich station 4IP moved to Brisbane and became station 410. I believe this historical service to the West Moreton region should be restored and my Department is examining the possibility of either an AM or FM service in this area. I expect to make a further announcement in the middle of this year.

Conclusion

The planning program I have announced today will provide FM services to enhance greatly the diversity of choice available to radio listeners in regional Australia. As Australia has developed, the number of commercial radio services has not kept pace. Since 1940, only a handful of new AM services has been introduced in regional areas and the number of FM services is only now beginning to expand.

Newcastle, where the ABT has completed its inquiry, should be the first regional area to receive its own commercial FM service. Canberra and Mildura will follow when current legal action is resolved. Once services also come on line in the areas I have listed today, more than three million Australians outside the mainland State capital cities will be able to listen to commercial FM radio, and by the time services in these areas have commenced we shall have begun to plan further services as we develop our rolling program. The first full year of this planning program will be 1988 and it is fitting that our bicentennial year should see this development.

My statement today effectively sets the future course for commercial radio in regional areas but there is clearly a great deal of planning work yet to be done to fill in the details. With the measures I have just announced in place, I am confident that the log-jam that has developed in the supplementary licence process will be cleared away quickly so that additional commercial radio services will soon be on air. Together with our plans to expand Australian Broadcasting Corporation services to regional areas through the second regional radio network, we shall have taken great strides to provide diversity of choice to those who live outside the metropolitan areas. I seek leave to table for the information of honourable members two documents entitled `Planning Program 1987-89' and `Outline of Planning Procedures for New Commercial Radio Services (Effective February 1987)'.

Leave granted.