Existing ‘off-band’ commercial radio operators will be pleased with the result of a decision about Section 40 licences from the Communications Minister Richard Alston which ‘grandfathers’ their business model, while restricting new players.
The Commercial Radio industry will also be pleased that future competition from off-band commercial operators has been limited. New licencees only just entering the area will be the only ones disappointed.
In a letter to Narrowcast umbrella body ASTRA, Alston wrote:
“I believe that this approach will curb the future provision of commercial radio services in the frequency range 1606.5 to 1705 kHZ [AM off band frequencies], while providing an appropriate level of protection for existing section 40 licencees who have established their services in good faith under the previous regulatory arrangements.”
Alston issued “a Direction” to the ACA under section 12 of the Act requiring it to impose the additional licence conditions on all “MF NAS apparatus licences” with the effect of “limiting the use of such licences for the purposes of delivering a commercial radio service.”
The new conditions will now form part of the ‘Radiotelecommunications Licence Conditions’ which specifies the standard operating conditions of these licences. This decision will effectively prohibit licencees operating any new commercial services on these off-band frequencies.
Licences issued before 6 November 2002 will be exempted from the new conditions, grandfathering them to continue operating as they have been.
Section 40 licencees “which have not commenced a service” will be given a 12 month period of grace to get their services up and running. This will put pressure on several operators who were planning to roll out their services on these frequencies to speed up their activity in coming months.
Sid Merhi, Director of the NTC Network (whose Company Heart n Soul Productions Pty Ltd was the first to be issued with a Sec 40 Licence) told radioinfo: “All eleven Section 40 licencees should be very pleased with Senator Alston’s decision, which was very fair to all players both in and out of the AM band.”
“This means more certainty, which will flow on to more investment and the winner will ultimately be the consumer of our unique ‘best mix in the country’ format.”
Merhi says he “hopes the ‘old guard’ will mellow a bit with this decision, after all the entire landscape of radio is changing before our very eyes with radio these days…not necessarily being placed in the hands of the titans.”
“With the ABA’s massive planning process being nearly complete and Ministers Alston’s decision on Section 40s ..some real stability in the entire industry may be forthcoming and this means more jobs, more investment and the ultimate result being diversity in favour of the programme consumer,” says Merhi.