The Australian Communications and Media Authority held an auction today for five new high-power open narrowcast (HPON) licences that have been released over the past nine months as a result of variations to Licence Area Plans (LAPs) in four key markets: Perth, Griffith, Launceston, and Kalgoorlie. This article, contributed by Perth based narrowcaster and media consultant, Philip Smith, examines the applicants in detail and chronicles some of the politics behind radio narrowcasting in Australia. He contends that “the commercial radio broadcasters, which have applied for every HPON licence, may defeat some of the genuine narrowcasters, some of whom have actually lobbied ACMA to release these frequencies as HPONs.” Once the results of the auction are made public, radioinfo will let readers know who won and lost these licences in a follow up story to this detailed commentary.

ACMA invited applications for the five licences, setting a deadline of July 28 (see ACMA’s Draft LAP Variations). ACMA has also published a list of those applicants that were received by the deadline (see ACMA’s August 12 Media Release). My purpose in this commentary is to offer an authoritative analysis of who is running in the various races, why they might be contesting these licences, and who might be most likely to win each contest, and what that might mean for the radio landscape in each market.  

Open Narrowcasting is best defined as ‘niche’ broadcasting.  A narrowcast format is one which is limited in some way. The most commonly understood narrowcast formats are those that adhere to a language other than English, usually a single language like Italian or Greek or Chinese or Arabic, although a format based on a cluster of regional languages (ie South Asian languages) could also potentially qualify as narrowcasting.  Another format is religious (Christian, Muslim etc).  Racing Radio is considered narrowcasting, despite some racing radio services being broadcast on commercial radio stations like 2KY. Music formats are permitted to be classed as narrowcasting within strict limits, and Dance / Trance club music, Smooth Jazz, and Country music are often found being transmitted on narrowcast licences, both low-power (one watt) and high power (5 to 5000 watts).

The five licences being auctioned are transmitter licences that will be issued under the Radiocommunications Act 1992. There is a reserve price of $10,000 for the Perth licence and $2,000 for the remaining four licences. A list of the available licences and the name of the applicants for each licence is below, in the order in which ACMA will conduct the auction:

1. Perth 90.5 MHZ with 5000 watts max power in a direction radiation pattern = Gumnut Nominees Pty Ltd, Firebird Park Pty Ltd, Mr Tony Ishak, FM 104.9 Network Pty Ltd, Radio Perth Pty Ltd, Mr Israel Hobson;
2. Griffith NSW 90.3 MHz with 1000 watts max power in an omnidirectional radiation pattern = Gumnut Nominees Pty Ltd, Radio 2RG Pty Ltd, Mr Tony Ishak, FM 104.9 Network Pty Ltd, 2KY Broadcasters Pty Ltd, Seventh-day Adventist Church;
3. Launceston 1008 AM with up to 1.1 kV CMF in a direction radiation pattern = Great Southern Land Broadcasters Pty Ltd, Bass Radio Pty Ltd, Tasradio Pty Ltd, FM 104.9 Network Pty Ltd;
4. Kalgoorlie WA 104.3 MHZ with 100 watts max power in an omnidirectional radiation pattern = Gumnut Nominees Pty Ltd, Regional Broadcasters Aust. Pty Ltd, Firebird Park Pty Ltd, Racing & Wagering WA;
5. Kambalda WA 106.7 MHz with 100 watts max power in an omnidirectional radiation pattern = Regional Broadcasters Aust. Pty Ltd, Racing & Wagering WA.

The top four HPONs are located in significant markets.  While Kambalda is a modest-sized mining town in regional Western Austalia, the important factor here is that low-power Open Narrowcast FM licences (LPONs) are not permitted in town, due to an exclusion zone around the existing Channel 3 TV station, whose analogue transmissions occupy the lower part of the FM band.  

Each of these companies needs to be identified so that the full extent of the race dynamics can be understood and analysed. Some companies are applicants for more than one HPON, so a list of each company and it’s popular identity as a radio station will be stated briefly:

1. Gumnut Nominees Pty Ltd – This company broadcasts under the name of the Melbourne-based groupe ‘Rete Italia’, a division of Italian Media Australia.  Rete Italia own HPONs (all AM-band) in many capital cities, and dozens of Medium Frequency Narrowband Area Service (MF-NAS) licences between 1611 kHz and 1629 kHz in significant markets across Australia.
2. Firebird Park Pty Ltd – This company is registered in WA and was associated with an aspirant community broadcaster, Phoenix Radio Ltd, also known as “Hype FM”, who competed against Capital Radio for the last Community broadcast licence on 101.7 MHz offered in Perth.  Phoenix lost that tender to Capital Radio late 2009. The company does not own any radio licences at present. (See Hype FM on Facebook)
3. Tony Ishak – Mr Ishak is the managing director of Radio 2moro or Sawt El Ghad, based in Sydney NSW.  This is a Lebanese narrowband narrowcast operation broadcasting in Arabic on 1620 kHz in Sydney, and on Intelsat 8 satellite.
4. FM 104.9 Network Pty Ltd – Chinese Radio International (CRI Beijing) allied organisation based in Perth, where they currently use an HPON on 104.9 MHz FM with 50W power from Joondana on a leased basis.  The only licence they own is a Fixed Point to Point licence for a studio to transmitter link (STL).
5. Radio Perth Pty Ltd – Commercial Broadcaster Radio 6iX 1080 kHz AM, a part of the Grant Broadcasters group.
6. Mr Israel Hobson – This name applies to a Perth-based DJ > DJ-IZ, who also has ties to Africa.  He is part of ‘Radio AfriQ’ who currently broadcast a show 7-9pm every Thursday on Fremantle FM. There is a Myspace page, a Facebook page and a Twitter following for this applicant, who has no radio licences registered to his name.
7. Radio 2RG Pty Ltd – Commercial Broadcaster that is part of the Southern Cross Media Group.  They operate two commercial radio stations, 2RG 963 AM and 99.7 Star FM, from Griffith, NSW.  Radio 2RG also own two LPONs, both 88 MHz, in Griffith and Leeton.
8. 2KY Broadcasters Pty Ltd – Racing Radio NSW, a commercial broadcaster based in Sydney with dozens of HPONs and LPONs across that state.  2KY already owns an LPON 87.6 FM in Griffith. (see Sky Sports Radio 1017 AM)
9. Seventh-day Adventist (SDA) Church – Specifically the South New South Wales Conference of the SDA Church.  They are the only Christian group applying for HPONs in this round of offers.  They own a string of LPONs across the region, including Dubbo, Lithgow, Blayney etc. The SDAs own around 200 LPONs nationally, but not all under the one corporate name.  They are the second largest Christian narrowcaster in Australia, after Vision Radio Network.
10. Great Southern Land Broadcasters Pty Ltd – Commercial Broadcaster that is part of the Southern Cross Media group. They operate 7TTT  (Sea FM 100.9 MHz) and 7XXX (Heart FM 107.3 MHz) in Hobart.
11. Bass Radio Pty Ltd – Commercial Broadcaster that is part of the Grant Broadcasters Group.   They currently operate LA FM 89.3 MHz in Launceston, after switching from 1098 kHz in February 2009, callsign 7LA.
12. Tasradio Pty Ltd – Racing Radio (Tote Sport Radio) operate commercial broadcast stations in Tasmania, as well as more than a dozen LPONs and a couple of HPONs across the state. 7EXX is the callsign for Launceston on 90.1 MHz FM.  They also own an 87.6 FM LPON in Launceston.
13. Regional Broadcasters Aust. Pty Ltd – Commercial broadcaster that is part of the Southern Cross Media Group.  They already own radio licences in Kalgoorlie and Kambalda and operate under the banner Radio West AM 981 Goldfields 6KG as well as 6KAR 97.9 MHz FM in Kalgoorlie and 94.7 MHz in Kambalda.
14. Racing & Wagering WA – Racing Radio in WA is NOT a commercial broadcaster.  They only own and operate on NARROWCAST licences, including an HPON in Perth (1206 kHz) and several other HPONs and LPONs across the state. They currently own an 88 FM LPON in Kalgoorlie and nothing in Kambalda.  (see Racing and Wagering WA)

It is interesting that United Christian Broadcasters Australia (Vision Radio Network) haven’t applied for any licences.  Perhaps they have more pressing strategic priorities, and knowing who they might be up against, they may have figured they’d be better off not contesting any of these HPONs.  They already have active LPONs in each location except Kambalda, and an HPON in Kalgoorlie.

Now lets take a look at each race and try to determine why the different groups are running.

Perth 

At the outset, it should be noted that this is arguably the most impressive HPON ever to be offered anywhere in Australia.  The current record is held for a AM HPON licence in Adelaide, which was won by an Italian group (not Rete Italia) in 2002 for $400,000, it will be interesting to see if this one breaks the record. 

There are three linguistically-based narrowcasters aspiring to get this licence.  Rete Italia and FM 104.9 Network already each have a radio service operating in Perth.  The Chinese group lodged a submission to ACMA stating that they intended to apply for this powerful HPON because they are not getting adequate coverage across Perth with their 104.9 MHz frequency on just 50 watts power.   I live in Perth and while I can pick this signal up in my car across most of the metro area, I have to admit that the signal weakens significantly on the southern and eastern flanks of the city.  Rete Italia have an AM HPON, and it would seem that they are responding to the demographic changes in their Italian support base.  I sense that they are attempting to transition from being an AM narrowcaster to an FM narrowcaster, and thereby attract and hold a younger audience who generally don’t listen to AM radio. Radio 2Moro would love to tap into the large and growing Arabic-speaking community in Perth, and again they’d prefer to use FM radio rather than the AM alternatives.  But I don’t think they have the financial muscle to win this contest.

Firebird Park and Israel Hobson would be the outsiders in this race and I doubt they’ll win.  Firebird Park would most probably resurrect the HYPE FM brand, which itself is a derivative of the failed Community Broadcaster ‘Groove FM’, who lost their licence back in 2008.  This group would probably adopt a dance / trance radio format, similar to Kiss FM in Melbourne and Raw FM in NSW and ACT.  This would be a potential threat to Nova 93.7 FM in Perth, who have play that style using their expensive commercial licence.  I don’t think Hype FM, who used to operate under the company name Phoenix Radio, are likely to rise from the ashes to capture this very impressive licence.  Israel Hobson might be seeking to bring a 24hr African radio station to Australia, but whether that is a music-based or linguistically-based format, or a combination of both, is not known at this stage.

Commercial Broadcasters Radio Perth Pty Ltd (6iX) are also in the running for the Perth HPON.  At this point I do not know what format Radio Perth would introduce for this HPON.  Grant Broadcasters own a string of HPONs NSW, VIC, SA and NT that broadcast Country Music (Hot Country) , so it would be my guess that this is the format they might adopt for Perth as well.  If this happens, it could pose some problems for community radio station Heritage FM 107.3 MHz based in Gosnells, who currently specialise in country music.  Commercial Broadcasters often purchase HPONs (and LPONs in small regional markets) when they are threatened by the potential entry of a new player, who could capture a slice of the market with a marketable radio narrowcast format.  Commercial Radio Australia and DMG Radio (owner of Nova) both opposed ACMA’s plan to release 90.5 MHz as an HPON with the state operating parameters. This indicates that this licence could upset the cosy balance within the Perth market.

The most interesting feature of the Perth Race is the absence of RWWA, who actually lobbied ACMA to release 90.5 MHz as an HPON.  In RWWA’s submission to ACMA, they state emphatically that they would be a contestant for this licence.  Why would they withdraw from this race when they clearly wanted a better FM frequency to replace the AM frequency that affords them barely adequate coverage in the Perth Metro area?  Perhaps they got wind of 6iX’s intention to enter the race and decided that it was a fight they could no longer hope to win.  

With RWWA out of the running, I predict the contest will go down to the wire between Rete Italia, Radio Perth and the Chinese with the price climbing above half a million dollars.  I suspect the other parties will exit the race once the price hits $100,000.

One interesting fact about the Perth HPON is that ACMA have set as a nominal site for the licence, a site that cannot be used by whoever wins. The site in Mills Rd East is currently used by Heritage FM 107.3 MHz – a community broadcaster based in Gosnells on Perth’s south side.  They are emphatic in stating that their site is full, with no room for any new radio operators and no scope for permitting anyone else to legally broadcast from that site. I think is quite intriguing that ACMA would nominate this site, knowing that only Heritage FM can use it.  Finding an alternative site in the Perth Hills for this licence will be a challenge for whichever party wins the auction.  

Griffith 

2KY and 2RG are commercial broadcasters that also own LPONs in Griffith NSW, but it seems they both want to upgrade to a much superior HPON. Rete Italia actually lobbied ACMA for the Griffith HPON frequency.  According to Wikipedia ,  “Approximately 60% of today’s Griffith population claim Italian background.” It seems Rete Italia have been leasing a MF-NAS licence on 1611 kHz from Promo Radio (Joe Santana), but also wish to upgrade to an HPON with an FM frequency.    But there can be no doubt that Rete Italia will fight hard for this licence.

2RG are part of the Southern Cross Media group, who also control Gold Radio Service Pty Ltd in Toowoomba QLD.  That company owns three HPONs on top of their two commercial broadcast licences in Toowoomba.  One HPON is a country music station on 91.5 MHz. So Southern Cross Media might go for a country music format for narrowcasting as well if they win any of the licences they seek.  But it would seem to me that they are acting to protect their market from would-be competitors, whoever they are – a common motivation for commercial broadcasters when seeking HPONs.

The Adventists might be the dark horse in the Griffith race.  I should declare my hand and mention that I have worked with the Adventists in helping them acquire LPONs in every state of Australia.  Their loose network infrastructure is a mixture of church-owned and privately owned LPONs.  Like many narrowcasters, these stations use satellite relay for transmitting programs, and the Adventist Media Network in Sydney are currently building a new Australian-based satellite radio service to complement those LPONs already using the US-based 3ABN Radio service on Optus D2.  3ABN Australia is an independently-owned group with a close affiliation with the SDA Church.  3ABN Australia have purchased two MF-NAS licences in Western Australia in the past year, both 1629 kHz licences, one in Busselton and the other destined to be activated in Perth (which they purchased or Rete Italia!). 3ABN are not financially backing the church’s bid in Griffith as far as I know, since they are focussed on getting their Perth narrowband AM licence on the air.  However, that doesn’t mean the South New South Wales Conference can’t call on resources from its national and international connections to try and secure this licence.  It depends on how hungry they are to get their first serious HPON, and thereby move beyond LPONs into a bigger radio league and strengthen their fledgling national radio network.

The Chinese FM 104.9 Network are going for all the big HPONs, including Griffith.  And they might have some big dollars behind them coming into this race if they lose their bid for Perth.  Radio 2Moro might like the idea of winning an FM HPON in Griffith, but of the ethnic narrowcasters, Rete Italia would have to be ahead in this race.

But in the end, I suspect the battle will come down to a contest between 2KY and 2RG, both commercial broadcasters.  2KY owns a commercial radio licence in Sydney, but there is no question that they are genuine narrowcasters, and the wealthiest among this class as well.  If Rete Italia do not prevail in the Perth contest, then they will certainly run hard and finish strongly to secure the Griffith HPON.  And they may just succeed.  I’d expect the final price to reach $50,000, maybe more.

Launceston 

In Launceston, it is basically a contest between existing commercial broadcasters.  Tasradio used to own this frequency as a commercial licence before converting to their current FM frequency.  Now they want to get the 1008 AM frequency back as an HPON, and turn their FM station into something more mainstream.  This is a clear threat to the other commercial broadcasters in Launceston, and also in Hobart it seems.  LA FM 89.3 are in the race probably defending their turf against Tasradio’s bigger plans, while Great Southern Land Broadcasters would probably like a slice of the Launceston market for themselves, potentially running a country music format.

Whichever way you look at it, this is a battle between local commercial leviathans, and the Chinese are unlikely to succeed in their bid for this licence.  The Chinese are targeting the most potent licences on offer in this round of HPON allocations, but I doubt they’ll win any of them, although they might be a chance in the home city of Perth WA.  If I were a betting man, I’d put my money on Grant Broadcasters and Bass Radio, with the Launceston AM licence going under the hammer for $100,000 or even $200,000 or more.

Kalgoorlie and Kambalda 

Since Racing and Wagering WA appear not to be contesting the HPON in Perth, I think they’ll be saving their money to secure the HPONs in these two regional towns.  Unlike the Racing Radio stations operating in the Eastern states, RWWA do not own a commercial broadcast licence.  They are still a significant broadcaster in their own right, but I perceive that they are not quite as strong in relative terms as say 2KY or 3UZ.  I suspect that they want the HPONs in these towns more than they need the Perth HPON.  Their solo 88 FM in Kalgoorlie would not give them adequate coverage in a town of 30,000 people.

In Kalgoorlie and Kambalda, Radio West are also apparently defending their turf, although perhaps they entered the HPON race in these towns fearing that somebody other than RWWA, like Firebird Park, might emerge and threaten their own commercial radio interests if they were to win the auction.  I doubt Firebird will win any of the races in which they have entered, but if they lose in their bid for the Perth HPON, they might be a threat in Kalgoorlie and should not be ignored.  

The Italians would love an FM licence in Kalgoorlie, but they may exhaust their resources securing either Perth and/or Griffith HPONs, and in an auction, it all comes down to who’s got enough money in their pocket.  And if they win either of those two more potent HPONs, they may content themselves with using a decent AM frequency in Kalgoorlie.

I predict that RWWA will win both Kalgoorlie and Kambalda HPONs, which will attract a top bid of $30,000 and $20,000 respectively.

Aftermath 

If the Chinese win the Perth HPON, then they will almost certainly abandon the 50W HPON they currently use, from whence they get their company name (FM 104.9 Network).  This HPON will then be available for other aspiring narrowcasters to lease from owner Promo Radio.  My guess is that Firebird Park would then try to grab this licence, and perhaps invite DJ Israel Hobson to join their crew.  

If Rete Italia win in Perth then they may sell or lease their obsolete AM licence on 657 kHz.  Firebird Park may again be interested in using this for their dance radio narrowcast format.  They’d definitely prefer an FM frequency, but AM may have to suffice.  Or, RWWA might buy the 657 AM licence from Rete Italia and then sell their slightly less usable 1206 kHz HPON (to Firebird Park? Radio 2Moro?).  Both HPONs are rated at 2000 watts, but 657 is a better spot on the AM dial and gets better propagation and therefore coverage across Perth.

Mind you, if 6iX win, then the existing narrowcasters will be stuck with what they currently have and Firebird Park will be consigned to the ashes, unless they win in Kalgoorlie, and I doubt they will.

If Rete Italia win in Griffith, then the only thing that will change is that the 1611 they have been leasing will become available for someone else like Radio 2Moro or the Adventists to lease, while 2KY will remain on their 87.6 FM LPON, and 2RG will possibly use their 88s.

If either Bass Radio (Grant Broadcasters) or Great Southern Land Broadcasters (Southern Cross Media) win in Launceston,  the most likely outcome will be a country music station for that market.  If Tasradio win, then some new format might emerge on the commercial radio scene.  And Tasradio might sell their 87.6 FM LPON in Launceston.

2KY once boasted that all they needed was an emphatic victory in an early HPON race (pre 2000) for all other contenders to forever back down when the know they’re up against 2KY.  Many of the applicants in the Griffith HPON contest are also seasoned radio operators and narrowcasters, and while there can be only one winner, none are likely to pull out of the race.  

If RWWA win in Kalgoorlie, then they may sell off their 88 LPON to somebody.  Even losers in these races might find there is something else in each town or city that they could pick up for a price that they can afford.

If genuine narrowcasters, including the racing radio applicants, win any of these HPONs in this auction (or Price-Based Allocation as ACMA call it) the price will certainly be forced up by the other applicants.  Commercial Broadcasters with deep pockets are entered in every race, and the prices are going to go high, perhaps higher than ever before in comparison to auctions for HPONs in similar markets held in years gone by.  Commercial Radio station owners often fear the appearance of powerful HPON licences in their markets and they will often fight to secure these assets and in a sense neutralise the supposed threat to their market dominance.  They can’t sit on an HPON (although some do hoard LPONs, which is contrary to the rules), but in controlling the licence, they determine what format it will be, and they can derive some revenue from that.  Nevertheless, as Country Music has developed as a viable commercial narrowcast format, commercial broadcasters are increasingly interested in securing HPONs in order to cash in on the popularity of this niche in the radio landscape.

This is an interesting contest.  Watch radioinfo and ACMA’s website for the results for the official results as soon as they are made public.

Contributor: Philip Smith

Philip Smith is a narrowcaster and media consultant based in Perth WA where he operates an 87.6 FM LPON station in Gosnells.  He did his Masters research project investigating LPONs in South East QLD.  He administers a Facebook group ANNRO – Alliance of Narrowcast and Narrowband Radio Operators.  He has written numerous submissions to ACMA about reform of the narrowcasting sector, and has purchased and sold many dozens of LPONs across the country over the past five years.