Communications Minister Senator Richard Alston has issued a Direction to the Australian Broadcasting Authority (ABA) that will help “ensure effective diversity and competition is maintained in Australia’s commercial radio market,” which could have a significant effect on some possible future licence sales.

The Government is concerned that some radio broadcasters may seek to limit diversity and competition for both audiences and advertisers by limiting the format of other commercial radio services within their market.

For example, a commercial radio broadcaster who buys an additional licence with the same broad service format as their existing service, may limit diversity and competition by then selling the licence to a buyer who intends to change the format to one with narrow appeal.

The Australian Broadcasting Authority (Revisiting Radio LAPs) Direction No.1 of 2003, addresses such situations by requiring the ABA to consider allocating a new commercial radio licence in an area if this is necessary to maintain a diverse range of popular commercial radio services.

Before taking action the ABA must be satisfied that a number of pre-conditions have been met:

a commercial radio licence has been sold;

the service provided under the licence changes format from one of broad general appeal to one of narrow appeal within three years of the sale; and

as a result, there has been a reduction in the number of radio services of broad general appeal in the licence area.

The Direction “enhances the amendments already introduced by the Government to the Broadcasting Services Amendment (Media Ownership) Bill 2002. These amendments prohibit any restrictions to the format of commercial radio services through a contract or similar arrangement at the time of a sale of a licence or between two licensees operating in the same market.”