The ABA will not allocate any further analog commercial radio licences for at least five years after the present round of licence allocations is finished.
This will be good news for existing players in the commercial, narrowcast and community sectors, but will affect stations which were slow off the mark in getting aspirant licence bids together.
It will also make the upcoming round of capital city commercial licences, in Adelaide, Sydney, Melbourne and Brisbane, more valuable, creating a pleasant but “unintended” consequence for the government.
The decision will also affect Australia’s progress towards digital radio and is likely to make digital licences more highly sought after as Digital Radio progresses in the coming five years. The ABA is holding a seminar tomorrow in Sydney about digital radio (see other story) where players from each sector are expected to indicate a firmer position on their approach to the new radio broadcast technology.
“The general policy only applies to analog commercial radio services using the broadcasting services bands of the radiofrequency spectrum. It is not intended to constrain decisions that may be made in future concerning digital radio systems,” says the ABA.
Commenting on the announcement, ABA Chairman David Flint said:
“The ABA has completed the planning of all of the radio licence areas in Australia and it is now appropriate to give some indication of our current intentions concerning that sector… As a general policy, the ABA does not propose to allocate any further analog commercial radio licences within five years of the last allocation in the present round.
This should not be taken to mean that after five years the ABA will begin a further round of allocations. Mindful of the statutory requirement that the regulatory arrangements be stable and predictable, we believe it appropriate to give some indication of our present thinking.”
The last round of the ABA’s 10 year licence area planning process ends with the imminent auction of the commercial licences in the four capital cities. By then the ABA planning process will have seen 97 new commercial radio services planned across Australia, with 36 of them allocated by auction and 61 awarded to existing solus market commercial licensees. This growth has been accompanied by similarly rapid expansion of other the narrowcast and community sectors.
“While completion of these allocations will not be the end of analog radio planning, such wholesale expansion of analog radio is unlikely to recur,” says the ABA.
The history of radio in Australia shows that industry expansion is cyclical and linked with new technology. The major periods of expansion occurred before World War II, in the case of AM radio, and from 1980 until the present in the case of FM radio. Although digital technology may soon open up “new frontiers for expansion,” the ABA does not expect “further growth of analog radio on the scale of the last decade.”
Analog radio spectrum is now heavily congested in the metropolitan areas and many of the more densely settled regions.
The ABA has signalled that in future any new services might mean other stations may have to move, because all the spare frequencies have been used up. In 1992, at the start of the ABA spectrum planning process, the situation was very different. Back then, there were numbers of vacant frequencies suitable for high or medium power radio services available in most markets.
“In markets where there are unallocated commercial radio services shown as available in licence area plans, the general policy will take effect after allocation of those licences.
The articulation of this general policy is intended to allow the markets to accommodate those new services, and to provide a stable and predictable regulatory environment for investors in commercial radio services.”