Re 2day Fm Australia Pty Ltd and the Triple-M Broadcasting Company Pty Limited v the Minister of Transport and Communications and Hayden Nepean Broadcasters Pty Limited [1993] FCA 50 (23 February 1993)

FEDERAL COURT OF AUSTRALIA

Re: 2DAY FM AUSTRALIA PTY LTD and THE TRIPLE-M BROADCASTING COMPANY PTY
LIMITED
And: THE MINISTER OF STATE FOR TRANSPORT AND COMMUNICATIONS and HAYDEN NEPEAN
BROADCASTERS PTY LIMITED
Nos. N G674 and 675 of 1992
FED No. 57
Number of pages - 32
Broacasting
(1993) 30 ALD 354 (extract)

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.(1)

CATCHWORDS

Broadcasting - Commercial radio licence - Conversion from AM frequency to FM frequency - Effect of conversion on existing FM licensees in adjoining service area - Imminent change in relevant legislation - Awareness by decision-maker that conversion not easily possible under new legislation - Whether decision-maker took into account an extraneous circumstance - Whether decision unreasonable.

Broadcasting Act 1942, s.89D.

Administrative Decisions (Judicial Review) Act 1977, s.5.

HEARING

SYDNEY, 1 and 2 February 1993
23:2:1993

Counsel for the Applicant: D.K. Catterns QC and R. Cobden

Solicitors for the Applicant: Boyd House and Partners

Counsel for the First Respondent: A. Robertson

Solicitors for the First Respondent: Australian Government Solicitor

Counsel for the Second Respondent: P. Graham QC and L.S. Einstein

Solicitors for the Second Respondent: Bradfield and Scott

ORDER

THE COURT ORDERS THAT:
1. The Application be dismissed.

2. The applicant pay to each of the respondents their costs of
the proceeding.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

WILCOX J. Two cases have been heard together, by consent. Each case is an application by the holder of a commercial radio licence for review, under the Administrative Decisions (Judicial Review) Act 1977, of a decision concerning the licence held by another licensee. The decision was taken by Colin John Knowles, then Assistant Secretary, Station Planning Branch, of the Department of Transport and Communications. Mr Knowles was acting as a delegate of the Minister for Transport and Communications, the first respondent in each proceeding.

The background facts
2. The two applicants, 2Day FM Australia Pty Ltd and The Triple-M Broadcasting Company Pty Limited, operate FM broadcasting stations located in Sydney. Their defined service area extends from the coast to the Hawkesbury-Nepean river in the north, west and south; with a small area west of the river which includes Emu Plains, Leonay, Lapstone, Glenbrook and part of Blaxland. The second respondent to the proceedings, Hayden Nepean Broadcasters Pty Limited, operates a service which for many years broadcast on AM frequency and was known as 2KA. The station's defined service area encompassed the whole of the Blue Mountains, west of Sydney, and part of the Sydney metropolitan area. The western boundary of 2KA's service area was a line west of the western escarpment of the mountains which ran from Hartley Vale to about Jenolan Caves. The eastern boundary of the service area ran between Windsor and Cecil Park, well within the Sydney service area. As will be obvious from this description, the two service areas overlapped. The overlap area included the substantial population centres of Penrith, St Marys, Emu Plains, Richmond and Windsor.

3. The extent of the service area allocated to a radio licensee is determined from time to time by the Minister. The concept is that a licensee has a particular responsibility to listeners within its defined area, in connection with information about such matters as local news, forthcoming local events, weather, traffic information and the like. However, a defined service area is rarely (if ever) co-terminous with the area in which satisfactory signal reception is available. In these proceedings it is common ground that 2KA's AM signal was audible outside its service area, including in parts of the Sydney metropolitan area. It is also common ground that the FM signals of the two applicants penetrated deep into 2KA's service area. It follows that the geographical area within which the two applicants and 2KA competed for listeners greatly exceeded the service area overlap.

4. No doubt many radio advertisers are persons conducting business only within the station's defined service area. They assume that many (if not most) listeners are local residents having ready access to the goods or services they advertise. Such advertisers may see little advantage in their advertisements being heard in locations remote from their place of business. But this is not true of national advertisers. The extent of signal penetration beyond a licensee's service area - called "overspill" in the industry - is important to national advertisers; and, accordingly, to licensees.

5. During 1991 a decision was taken by the Government to amend the Broadcasting Act 1942 in such a way as to encourage the conversion of commercial radio services from AM frequency to FM. On 23 July 1991 the Minister issued a news release concerning the matter. A few days later, on 2 August 1991, the second respondent wrote to the Minister expressing interest in converting station 2KA to FM. The letter referred to the extent of service area overlap and fortuitous overspill already occurring between 2KA and Sydney radio stations and argued that 2KA should be permitted to convert to FM not later than the date of conversion of Sydney AM stations.

6. The Minister responded to this letter with a request that the second respondent advise the Department its preferences about the timing of any conversion and the technical operating conditions. The second respondent did so. In a letter dated 10 October, Michael Walsh, the company's chairman, referred to the fact that the company currently used two AM transmitters, one in the Blue Mountains (on a company-owned site at Wentworth Falls) and the other on the banks of the Nepean River at Penrith. Mr Walsh said that the company's proposal "is to consolidate these into one FM transmitter facility, possibly sited on the lower Blue Mountains escarpment". But he added that final technical operating conditions would be subject to the station's analysis of a field strength study.

7. Mr Walsh's proposal was examined by Robert Greeney of the Department's Station Planning Branch. In an internal memo dated 22 November he indicated opposition saying, that it would be difficult for a transmitter on the Blue Mountains escarpment to service the upper part of the service area, particularly Katoomba. He also said that the high Effective Radiated Power ("ERP") required for such a facility would be likely to cause television interference problems over a wide radius, in a relatively highly populated area, and that there would be significant overspill, notably into the Sydney metropolitan area. Mr Greeney said that a preliminary analysis showed that the service area would be better served with a medium power transmitter near Katoomba and a lower power translator at Penrith, not on the escarpment.

8. Mr Greeney's view was conveyed to representatives of station 2KA at a meeting in Canberra on 26 November. This meeting was followed by a further meeting, on 18 December, between representatives of 2KA and Mr Knowles. A number of options were canvassed. One of them was the use of 2KA's existing AM transmission tower at Wentworth Falls. It was agreed that this location -

"... should provide excellent coverage of the service area because of
this substantial height gain advantage. The site is virtually in the
centre of the service area and a simple omni-directional antenna could
be used. It also provides excellent coverage of the main highway".

The record of the meeting went on to say that there -

"... may be a few problem areas under the face of the escarpment but
these would appear to be amenable to correction by means of a small
translator. It may be possible to consider the use of low power
synchronous translators for this".

9. As I understand the matter, an ordinary translator operates on a frequency different to that of a station's main transmitter. This means that, although the available program is the same, listeners have to re-tune their radio if passing between the reception area of the main transmitter and that of the translator. Synchronous translators operate upon the same frequency as each other, thus eliminating the need to re-tune. However, synchronous translators are still in the experimental stage. There is no commercial use of synchronous translators; at least in Australia. It is common ground in these proceedings that the use of synchronous translators is not an effective way of delivering a broadcast to areas able to receive the signal from both transmitters. Each signal interferes with the other. It follows that the use of synchronous translators is only satisfactory where the station ensures that no part of its reception area will receive both signals. Whether this can be ensured in relation to station 2KA's reception area is a matter not yet determined.

10. During the latter part of 1991, Parliament enacted the Broadcasting Amendment Act (No.2) 1991. That Act carried into effect the Government's plan to encourage conversion of AM commercial radio stations to the FM band. One of the amendments was the addition to s.89D of the Broadcasting Act of subss.(5A)(5B) and (6), in this form:

"(5A) The holder of a non-metropolitan AM commercial radio licence may
seek to convert that licence to FM by applying to the Minister, in
writing, for the variation of the technical conditions of the
licence warrant so as to authorise transmission only by way of FM
frequency.
(5B) On receiving an application made under subsection (5A), and after
having regard to any representations made in accordance with
subsection (8), the Minister may:
(a) exercise the Minister's power under
subsection (6); or
(b) dismiss the application.
(6) Subject to sub-sections (7) and (8), the Minister may,
during the currency of a licence warrant, by notice in
writing to the licensee, vary or revoke any of the technical
conditions of the licence warrant or determine further
technical conditions to be applicable to the licence
warrant."

11. The amendment just mentioned took effect on 3 January 1992. Three days later the operators of stations 2-MMM and 2-DAY, the present applicants, each sought permission to increase their transmission power, arguing that this was necessary for satisfactory reception over the whole of their service area. Their applications were successful.

12. It appears that, on 20 and 21 February 1992, station 2KA conducted tests to determine field strengths, in various locations within its service area, of an FM signal transmitted from the Wentworth Falls tower. The results were used in preparation of suggested technical operating conditions. On 2 April 1992, Hayden Nepean Broadcasters made a formal application to the Department of Transport and Communications for conversion of station 2KA to FM frequency under the call sign "2-ONE". The application was the subject of subsequent correspondence between the company and the Department. On 25 May the company notified its detailed technical proposals. It suggested transmission from the Wentworth Falls site on a frequency of 96.1MHz using an omni-directional transmitter with 10kW ERP.

13. On 8 July 1992 the Minister delegated to Mr Knowles power, pursuant to s.89D(6) of the Broadcasting Act, to determine technical conditions of licence warrants. Mr Knowles had the station 2KA application before him at the time. He did not immediately determine it. Rather, he prepared a notice to be sent to other interested parties, including the present applicants. This was despatched on 10 July. It read as follows:

"An application to convert from the AM to the FM Band has been received
from commercial radio station 2KA. The proposed technical conditions
for the conversion and a field strength contour map are attached.
2KA originally proposed a service with 10 kW ERP but the Department has
recommended that this be reduced to 5 kW as a reasonable compromise
between the goals of adequately covering 2KA's service area while
minimising the overspill of signal outside its service area.
The Department recognises that there will be overspill of signal into
the Sydney service area due to the near free-space propagation path
between Sydney and Katoomba. This is considered unavoidable, as is the
overspill of signal from Sydney FM services into the Katoomba service
area.
The attached table lists predicted signal strengths for a number of
locations both within and outside the Katoomba service area. There are
a number of locations (eg Emu Plains) within the service area that are
shown as receiving an inadequate signal primarily because they are
shadowed by the escarpment. It is intended that the existing AM
translator in Penrith continue to operate so as to service this shadow
area.
When refering to the estimated coverage map, note that there may be
small pockets where field strength levels fall either substantially
above or below the value of the contour."

14. Attached to the notice was a draft statement of technical conditions prepared by the Department. As the notice itself stated, this draft departed from station 2KA's proposal in that the envisaged 10kW ERP was reduced to 5kW.

15. The Department fixed 3 August 1992 as the closing date for submissions in relation to the conversion proposal. However, at the request of the present applicants, the Department extended time for submissions until 7 August. On 6 August 1992 companies associated with each of the present applicants lodged submissions with the Department. Neither submission raised objection to the concept of station 2KA's conversion from AM to FM. But both expressed apprehension about the degree of likely overspill into the Sydney service area. Austereo Ltd (2-DAY FM) claimed that -

"the proposed ERP for the FM facility combined with near free space
propagation path between Wentworth Falls and Sydney will result in the
reach of the signal to a significant portion of the Sydney service area
well beyond its overlap with 2KA's service area.
The strength of the signal will, in effect, permit 2KA to service much
of the Sydney area in which two commercial FM radio stations presently
operate and in which two AM stations are preparing to convert. (Both of
whom must pay an aggregate of $9m for FM conversion.) ...
Austereo cannot accept that the overspill is an unavoidable consequence
of 2KA adequately covering its service area.
I urge the Department to reconsider the draft conditions and seek an
alternative proposal from 2KA which will indeed be a 'reasonable
compromise'."

16. Austereo went on to submit that a "reasonable compromise" would be achieved by station 2KA retaining AM transmission from its Wentworth Falls site and instituting FM transmission from a new site at a lower altitude on the Blue Mountains escarpment. It suggested that the new site be land at Yellow Rock, near the Hawkesbury Lookout between Springwood and Richmond. In 1988 a company controlled by 2-Day FM and 2 MMM-FM, Sydney FM Facilities Pty Limited, had proposed the erection on that land of a transmission tower to be used by the two stations to provide better service to the western part of their area. The proposal was not implemented.

17. In its submission Austereo argued the virtues of its suggestion. It then referred to the date of conversion:

"I understand that 2KA must convert to FM prior to 1 October 1992.
In light of this factor, I believe that it may not be possible for 2KA
to implement the suggested proposal within the timetable for its
conversion.
Consequently, I believe that appropriate circumstances exist for the
grant to 2KA of a temporary permit (6 months) to install an FM facility
in Wentworth Falls for a limited period to allow 2KA a reasonable time
in which to commence transmission as proposed above from the new FM
transmission site, lower on the Blue Mountain escarpment."

18. The submission of Hoyts Media Limited (2 MMM-FM) was to similar effect. The letter stated that the company was not opposed to 2KA converting to FM -

"nor are we opposed to their requirement of commencing operation by
October 1st 1992, but we are opposed to the level of signal fortuitously
covering the Sydney Radio service area."

This letter also advocated use of the Yellow Rock site.

19. The significance of 1 October 1992 was that, by 6 August, the Minister had announced that legislation enacted early in the year for the purpose of entirely replacing the Broadcasting Act, the Broadcasting Services Act 1992, would commence operation on that day. (In the event, the new legislation commenced on 5 October.) This new legislation contained no equivalent of s.89D(5A)-(6) of the Broadcasting Act. Nor did the companion transition statute, the Broadcasting Services (Transitional Provisions) Act 1992, preserve the rights of 89D(5A) applicants whose applications were undetermined at the date of repeal of the 1942 Act. The effect of the Broadcasting Services Act was that conversion would be permissible only after consideration by the new supervisory body, the Australian Broadcasting Authority, of regional broadcasting plans. The formulation of regional broadcasting plans was expected to take some years. It was impossible to predict the order in which the new Authority would examine particular regions and, consequently, to say when it would consider the Blue Mountains service area.

20. The submissions made by Austereo and Hoyts Media were promptly considered. On 10 August Alistair Gellatly of the Station Planning Branch faxed a letter to the Town Planner of the Blue Mountains City Council. Mr Gellatly sought an indication of the council's attitude to the siting of a transmitter at Yellow Rock and requested the Town Planner to telephone an initial response as soon as possible. He received no response, despite a follow-up telephone call.

21. Notwithstanding the lack of information from Blue Mountains City Council, Mr Knowles proceeded to consider the objections to the 2KA application received by the Department. He prepared a document dated 16 August 1992. Early in that document Mr Knowles noted that 2KA "would have no rights to convert under the" Broadcasting Services Act. He discussed the transmission sites mentioned by interested parties and the complaints of excessive overspill advanced by the Sydney radio stations. Under the heading "Analysis", Mr Knowles summarised seven points:

"1. The proposals submitted by the Sydney stations require the
development of a 'green fields' site about which we have been
unable to obtain any answers from the council as to its likely
availability for this purpose. The site could not be developed in
time to achieve conversion by the required timetable of completion
of planning work, issue of warrants, and payment prior to 1
October, and bona fide capacity to commence operations before that
date. Sydney stations appear to accept this constraint and
suggest that an interim arrangement may be necessary (this view is
not shared by all stations).
2. The alternative sites provide very good coverage of part of the
service area but do not come close to matching the general
coverage provided by the circulated proposal. They rely on the
use of two FM channels which for reasons stated earlier is not an
option. The ABA would be unlikely to reach any conclusion on this
matter inside 18 months given likely higher priorities for
planning. On the basis of evidence available at this time the ABA
is unlikely to conclude that the grant of further FM channels for
translators would be the preferred outcome.
3. Further reduction of power from Wentworth Falls will reduce the
signal inside the service area to unacceptably low levels,
particularly given the fairly rugged intervening terrain exhibited
by path profiles on the file.
4. The locations of concern in Sydney are essentially locations where
there is virtually free space propagation. The sites appear to
have been selected by the engineering team as worst cases. The
analysis is therefore to some extent biased in favour of the
Sydney stations rather than 2KA. This seems reasonable under the
circumstances of the differing market sizes and concerns expressed
by the Sydney stations.
5. I do not accept the argument that because the Sydney stations
provide very strong signals throughout the 2KA service area that
the 2KA overspill is of less concern. The overspill must be
judged by the application of the agreed guidelines and the
guidelines applied pragmatically to the particular station. I am
convinced this has been done and the comments on the Sydney
station's overspill have been provided simply as evidence of the
very great difficulty in constraining the signal at the boundary.
6. I have reviewed the comments by the Sydney stations and consider
that each issue has been the subject of through (sic) analysis.
My staff has not conducted any analysis of the market competition
issue but while this is of some concern it is not a factor about
which hard evidence can be gathered. None was advanced. From my
frequent discussions with many station managers in and around
Sydney, I have consistently been informed that regional station
penetration into Sydney is not a significant factor as the
marketing issues mitigate against real competition from these
stations who must continue to serve their home markets with
relevant material or loose out in the face of much stronger
capital city competition. I have seen nothing to suggest that
this view is incorrect. From my observations, it seems to apply
to the peripheral stations to each capital city market. I am
therefore not persuaded that I should seek to significantly depart
from the established guideline figures of median field strength
required for urban areas in the analysis of the overspill.
7. On balance, I have concluded that the weight of argument falls in
favour of the approval of the proposal as circulated for comment.
a. The coverage of the service area cannot be achieved with less
power and a single transmitter.
b. Provision of a second frequency is not acceptable under present
policy and is unlikely to be found acceptable by the ABA given
competing demands and restricted channel capacity in the Sydney
market.
c. No better site has been identified which will reduce the signal
overspill while maintaining reasonable coverage of the 2KA market.
d. The level of overspill into the Sydney market is a (sic) low as
practically achievable and is at a level consistent with the
application of the guidelines in other markets under similar
situations. Reduction in the level to the 'unlistenable' level
which the Sydney stations seem to be seeking would require such a
reduction in power that the signal would be unavailable throughout
much of the 2KA service area."

22. Mr Knowles then set out the substance of the decision he had reached:

"Since there is no change to the proposal as circulated I would not
expect any different comment from the Sydney stations should I provide
further opportunity to comment on these reasons in the context of a
proposed decision. Such action would also make it impossible of the
conversion to take place before 1 October seriously disadvantaging 2KA.
The station would appear to have a legitimate claim that further comment
on a proposal identical to that already circulated would be unnecessary
administrative delays by the Department that would prevent it achieving
its objective of conversion. I have therefore determined that further
consultation is unwarranted and disadvantageous to the parties
concerned. I intend therefore as the delegate of the Minister to
provide 2KA with relevant notice to vary its licence warrant and issue
the warrant upon acceptance of the variation. I also intend to inform
those stations which made submissions of my decision and my reasons for
rejecting their proposals."

23. On the following day, 17 August, Mr Knowles wrote a letter to Hayden Nepean Broadcasters notifying his decision to approve the conversion and specifying proposed technical conditions. The proposed conditions departed in one respect from those circulated to interested parties. The earlier conditions allowed a tolerance of 2dBA above or below the 5kW ERP. The amended conditions specified that 5kW ERP was to be the maximum permissible power. The effect of this amendment was further to reduce, although only to a minor degree, the strength of the signal permitted to be transmitted from Wentworth Falls.

24. On 18 August Mr Knowles signed the formal documents required to carry his decision into effect. The documents included a permission to operate a translator, located at Emu Plains, on the AM frequency of 1476 kHz for a period of 12 months from the date of commencement of FM transmission.

25. Hayden Nepean Broadcasters acted on Mr Knowles' decision. The necessary steps were taken to enable the commencement of FM transmission from Wentworth Falls. Transmission commenced on 21 October under the call sign 2 ONE-FM. In accordance with an approval granted by the Department, the Wentworth Falls AM transmission continued for one month after that date. It then terminated. Since then the station has broadcast from Wentworth Falls only on FM. It apparently still transmits on AM from Emu Plains.

26. The present applicants were unahappy with Mr Knowles' decision. They requested a statement of his reasons for decision pursuant to s.13 of the Administrative Decisions (Judicial Review) Act. This was supplied on 14 October. During the course of argument, counsel for the Minister described Mr Knowles' document as a "model statement". This is a deserved accolade. The statement is lucid, comprehensive and informative. It is also lengthy, so I will not set it out in full. I think the most useful course is for me to refer to the parts of the statement relevant to counsel's submissions in the context of my examination of those submissions.

27. Both the Applications to this Court were filed on 15 September 1992. They were subsequently amended. The amended Applications are in substantially similar terms. They state the same grounds of review of Mr Knowles' decision. Several grounds were abandoned at the trial. The result was that, as argued, the applicants' cases come down to two issues: whether Mr Knowles took into account an irrelevant consideration (see the Administrative Decisions (Judicial Review) Act, s.5(1)(e) and 2(a)) and unreasonableness (s.5(1)(e) and 2(h)).

Irrelevant consideration
28. Counsel identified the alleged irrelevant consideration by referring to para.7 of Mr Knowles' s.13 statement. That paragraph should, I think, be read with para.6. Paragraphs 6 and 7 appear in a section of the reasons, running from para.4 to para.23, which bears the title "Background". The two paragraphs are sub-titled "Timetable for completion". They read:

"6. On 5 August 1992, the Minister made an announcement that any
applications for AM to FM conversion received after 14 July 1992,
the day the Broadcasting Services Act 1992 received Royal Assent,
would not be considered. The Minister also mentioned that there
were already more conversion applications on hand than could be
dealt with by 1 October 1992, being the date the Minister expected
the substantive provisions of the Broadcasting Services Act would
be proclaimed.
7. At the time I made my decision, I was aware that the Minister
intended to make such a statement. In light of the proposed
statement, I took into consideration the need for completion of
all planning work, site development, issue of authorising licence
warrant documents and payment of the FM access fee to the
Australian Broadcasting Tribunal by 1 October 1992, because the
Act and its relevant conversion and fee payment provisions were to
be repealed from the date of proclamation of the substantive
provisions of the Broadcasting Services Act."

29. Counsel agree that the Minister's announcement of 5 August preceded Mr Knowles' decision. Accordingly, the opening sentence of para.7 should have read "the Minister had made a statement". But nothing turns on this. The salient point is that, by para.7, Mr Knowles revealed that, at the time of his decision, he expected that the new legislation would commence on 1 October 1992 and thought that, for conversion to be achieved under the existing statutory regime, it would be necessary for station 2KA to complete its planning work and site development, to obtain the issue of its licence warrant documents and to pay its licence fee, all by 1 October. Counsel for the applicants say this perception was incorrect. They agree that the licence warrant would have had to issue, and the new licence fee to be paid, before the repeal of the 1942 Act. But they say that it would not have been necessary for planning and site preparation to be completed by that time. However, having said that, counsel agree that this error (as I think it was) is immaterial.

30. Counsel's significant submission is that Mr Knowles erred in taking into account the fact that the opportunity for conversion was running out. They say that , whilst it was commendable for Mr Knowles to consider station 2KA's application promptly, he was wrong to allow the 1 October deadline to cause him to cut corners. Counsel argue that the suggestion of transmission from Yellow Rock was a serious and sensible proposal offering the prospect of minimising overspill into the Sydney service area. The suggestion was rejected, they say, only because its consideration would have delayed a decision until after 1 October. Counsel emphasise the Department's failure to extract from Blue Mountains City Council any response to Mr Gellatly's letter of 10 August. They accept that, if the Yellow Rock proposal had been followed up, Mr Knowles may have found it impossible to determine the application before the repeal of the 1942 Act, with the result that station 2KA would have had to take its chances under the new statutory regime. But they say that there is no presumption that one statutory regime is better than another. A statutory decision-maker has to accept the law as it stands at the time of decision; and it ought not to fall for decision until full investigation of all material matters.

31. Counsel for the Minister responds to these submissions by saying it can never be an error for a statutory decision-maker to accept a deadline for making a decision; a deadline may be necessary for proper administration. Counsel says a decision made pursuant to a deadline may be impugned only on other grounds; haste may cause error but cannot itself be error.

32. Counsel agrees that it would not have been appropriate for Mr Knowles to have allowed the imminent statutory change to limit his consideration of station 2KA's application or the objections he had received. But he says that it was not irrelevant for Mr Knowles to bear in mind the Government's policy of encouraging conversions and the fact that, unless earlier resolved, station 2KA's conversion would be significantly delayed (at least) by the repeal of the 1942 Act. The critical question, counsel submits, is whether Mr Knowles failed to give proper consideration to the matters before him, it being remembered that his decision would not be irrevocable (the FM technical operating conditions could be varied if necessary) and that he was not bound to search for the perfect solution to the practical problems confronting him. Counsel emphasises that both the present applicants accepted in their submissions to the Department that station 2KA would convert by 1 October. Neither suggested that it was impossible for Mr Knowles adequately to consider the matter before that date. Neither requested a further extension of time for submissions or the opportunity of providing further information.

33. Turning to the decision itself, counsel draws attention to other aspects of Mr Knowles' s.13 statement. In the section headed "Assessment of 2KA proposal" (paras. 24-42) Mr Knowles dealt in detail with the station's proposal, considering the proposed transmission site, frequency usage, radiation pattern and the problem of interference with television. The section on frequency usage discussed possible synchronous transmission. It pointed out the technical problem but left this for further consideration; the suggestion being that, in the meantime, 2KA ought to operate a 12-month AM translator at Emu Plains. Under the heading "Radiation Pattern" there was discussion of field strengths within the Blue Mountains service area and in the "overspill" Sydney service area. Reference was made to the decision to reduce overspill by imposing a 5kW maximum ERP and the effects of that decision. The discussion of station 2KA's proposal ended with this general assessment:

"41. The 2KA proposal, with the ERP reduced to 5 kW was considered by
departmental engineering staff to be an acceptable compromise on
the planning criteria for 2KA's FM technical conditions. This
modified proposal was circulated to industry for comment on 10
July 1992. The circulated proposal did not contain details of the
co-channel synchronous booster proposal because it was impossible
to sufficiently define this to produce appropriate site data and
technical conditions at that time. The relevant technical
conditions will need to be developed after field trials.
42. The formal overlap of the 2KA and Sydney commercial radio service
areas, and the elevation of Katoomba relative to the Sydney basin
area, make some overspill of 2KA's signal into Sydney unavoidable.
For the same reasons, the same problem occurs in reverse with high
signal levels of all Sydney commercial radio stations, especially
FM, throughout the whole Katoomba area. In order to provide
improved signals throughout their service area the Sydney stations
have recently been granted approval to increase the power of their
transmissions. Field strengths of Sydney commercial FM radio
stations using their proposed new shared antenna at the new power
level will be around 66 dBuV/m in Katoomba and 73 dBuV/m in
Lawson."

(The Department's Planning Guidelines seeks a field strength of 66dBuV/m or more in major population centres.)

34. The next section of the reasons (paras. 43-60) contained consideration of the received comments on the draft technical conditions. The section revealed that suggestions were made by several licensees other than 2 DAY-FM and 2 MMM-FM. They all stemmed from concern about overspill. It seems that all the suggestions were evaluated. The Department's appraisal of the comments was set out.

35. This subject was further considered in the next section of the report, headed "Consideration of Alternative Proposals" (paras. 61-68). In view of its importance to the present applicants' submission, it is worth noting that para. 62.e made specific reference to Yellow Rock, mention being made of the Departmental assessment that this site -

"is expected to have considerable difficulties in terms of gaining
local government planning approval on environmental and visual
amenity grounds".

The statement noted that such difficulties were foreshadowed by Sydney FM Facilities itself in 1988.

36. The s.13 statement contained Mr Knowles' conclusions:

"69. Having taken into consideration all the matters outlined above I
came to the following conclusions:
a. the proposals submitted by the Sydney stations require the
development of a 'green fields' transmitter site at Yellow
Rock. Departmental officers have been unable to obtain any
answers from the council on the likely availability of the
Yellow Rock site for this purpose. The site could not be
developed in time to achieve conversion by the required
timetable of completion of planning work, issue of warrants,
and payment prior to 1 October, being the expected date of
commencement of the Broadcasting Services Act and the repeal
of the relevant provisions of the Act.
b. I accepted the view of the Department's engineering staff
that the alternative sites proposed provide good coverage of
part of 2KA's service area but do not come close to matching
the general coverage of the 2KA service area provided by the
circulated 2KA technical conditions. The alternatives rely
on the use of two FM channels. This does not accord with
the established translator guidelines announced by the
Minister, referred to previously in paragraph 19.
c. the circulation document did not make it clear that a
synchronous translator is proposed to address residual
problems in Penrith and will result in closure of the
present AM translator in Penrith. Due to the limited
experience in Australia with this technology, it is
unreasonable to require 2KA to make use of it until there is
a main station in operation and relevant testing and site
identification is carried out. In the intervening period, I
decided to allow the existing AM translator at Penrith to
continue in operation for no more than twelve months. The
synchronous booster option will provide very limited
coverage of the potential problem area along the face of the
escarpment as the booster will be of low power to avoid
widespread interference to the main service.
d. a further reduction of ERP from Wentworth Falls to 2 kW was
considered. However, this would reduce the signal inside
2KA's service area to unacceptably low levels, particularly
in the lower escarpment area, due to the rugged intervening
terrain ...
e. apart from signal overspill near 2KA's service area
boundary, the concerns in Sydney essentially relate to
elevated locations such as Chatswood and Balmain where there
is virtually free space propagation. These sites were
selected for analysis as 'worst cases', and departmental
engineering staff's computer predicted field strengths has
employed virtually no clutter loss in the computations.
Propagation tests conducted by 2KA in February 1992 from the
Wentworth Falls site suggest that the departmental
engineering staff field strength predictions are a best
representation of the maximum levels expected in practice.
Departmental engineering staff field strength predictions
probably do not represent a proper median given the
unobstructed paths to these test sites and I accepted the
views of Departmental engineering staff as outlined in
paragraph 39. The analysis is therefore biased in favour of
the Sydney stations rather than 2KA.
f. the overspill must be judged by realistic application of the
current industry agreed VHF-FM Planning Guidelines for FM
service planning. The application of these guidelines in
developing the approved 2KA technical conditions was
consistent with their application in all other FM markets
planned by the former Station Planning Branch of the
Department, having due regard to the submissions made in the
consultation phase.
g. the potential for television interference around the
Wentworth Falls transmitter should not be significant as
outlined in paragraph 40. I accepted the views of
Departmental engineering staff in this regard.
h. on balance, the weight of argument fell in favour of the
approval of the proposal as circulated for comment for the
following reasons:
i. the coverage of 2KA's service area cannot
be achieved with less power and a single
frequency from the other transmitter sites
studied to date;
ii. provision of a second FM frequency is not
acceptable under present policy as it
would restrict FM channel capacity in the
Sydney market for new services;
iii. no better site has been identified which
will enable reduction of the signal
overspill while maintaining adequate
coverage of the 2KA market; and
iv. the level of overspill into the Sydney
market is as low as practicable. The
level is consistent with the application
of the Department's VHF-FM Planning
Guidelines in other markets such as
Geelong, Gosford and Ipswich under similar
situations, and to the planning of the
Sydney FM services. Reduction in the
level of signals in the Sydney service
area, to the 'unlistenable' level which
some submissions seemed to be seeking,
would have required such a reduction in
power that the signal would be unavailable
throughout much of the 2KA service area."

37. Counsel for the present applicants make the point that, even in this concluding passage, Mr Knowles had in mind the perceived necessity for conversion to be completed by 1 October. They say this was why Yellow Rock was rejected from consideration. But para. a, in which 1 October was mentioned, should not be read in isolation. Mr Knowles proceeded in para. b to refer to his acceptance of the view of the Department's engineering staff that the alternative sites, which include Yellow Rock, "do not come close to matching the general coverage of the 2KA service area provided by the circulated 2KA technical conditions". In essence, Mr Knowles was saying that his engineering advice was that the Wentworth Falls site provided the best means of transmission throughout that service area. Mr Knowles did have advice to that effect. The Department had investigated likely Yellow Rock field strengths at selected locations within and without station 2KA's service area. Although it is not a matter about which I need form an opinion, I comment that the engineers' conclusions are hardly surprising. The altitude of Wentworth Falls is close to that of the highest point in the Blue Mountains. It is understandable that they thought that a 70 meter tower at Wentworth Falls would provide satisfactory signal penetration to most receivers throughout the service area. Perhaps that is why station 2KA chose this location in the first place.

38. The problem confronting Mr Knowles was that the upper mountains are visible from many parts of the Sydney metropolitan area. Consequently, it was likely that there would be considerable Sydney overspill from any transmission site high in the mountains. Of course, the converse is also true; Sydney signals are receivable throughout much of the upper mountains. Rightly, Mr Knowles did not regard this as a reason for disregarding overspill. On the contrary, he addressed the matter of overspill at length and took steps to reduce it by a further reduction in transmission power. But Mr Knowles thought a more drastic reduction, or the selection of a location other than Wentworth Falls, would imperil satisfactory reception within the service area.

39. It is true that the matter of planning approval for the Yellow Rock site was not fully explored. There might have been difficulties in the Department pursuing that issue to finality. Neither station 2KA nor the Department had any title to the site. Neither would have been in a position to submit a formal development application or to test on appeal any unfavourable decision by the council. But none of this matters. Mr Knowles' conclusion was that, in any event, Yellow Rock offered inferior reception within the service area. He thought that reception within the service area must be his major concern. This was a view clearly open to him; counsel do not submit otherwise.

40. Although it is true that Mr Knowles was mindful of the significance of 1 October, this did not affect his ultimate decision. He considered all the alternatives put before the Department and came to the conclusion that 2KA's proposal was the best on offer. As counsel submits, he was not bound to seek the perfect solution. He was entitled to determine the matter by reference to the material which had been gathered by the Department over several months of investigation and the submissions received from the objectors. I do not think the 1 October deadline influenced his decision or caused him to fall into error.

Unreasonableness
41. The submission of counsel for the applicants on this aspect of their clients' cases was briefly put. It is, in essence, that the degree of overspill arising from the adopted technical operating conditions is so great that no reasonable person could regard it as acceptable. The argument is a difficult one to make, involving, as it does, a question of degree concerning a complex technical matter. In support of the argument, counsel referred to the field strength tests carried out by the parties and reported to the Department. These tests indicated that the 2 ONE-FM signal would be audible in many parts of the Sydney metropolitan area. But the quality of reception would vary according to local conditions. In respect of any particular place, much would depend upon the local topography and the existence and configuration of buildings. Reception of the Wentworth Falls signal was expected to be generally good in elevated areas, such as Chatswood, and areas with substantial water surrounds, such as Balmain. The prediction was that, in those suburbs, reception would generally be as good as in some of the Blue Mountains service area. But, as Mr Knowles noted, these suburbs represent a "worst case" scenario, from the viewpoint of overspill. In other parts of the metropolitan area reception would be less satisfactory.

42. There is a further aspect of the technical problem which confronted Mr Knowles. It was revealed in evidence given by John Howard Martin, chief operating officer of FM Australia Limited, the parent of the Triple-M Broadcasting Company. Mr Martin worked for 2KA at an earlier stage of his career. He agreed that it was "a notorious fact" that the 2KA AM signal was subject to interference by broadcasts from other stations. He mentioned locations as remote as Roma in Queensland and Melbourne. The problem was especially acute at night. Mr Martin said that Sydney AM stations also suffered interference, but to a lesser degree than 2KA. On the basis of this evidence it is apparent that there was a strong case, in the public interest, for the substitution of FM for AM transmission at Wentworth Falls; yet the proposal of the present applicants involved the retention of an AM transmitter at that location.

43. The Department was faced with a complex and difficult problem. It carried out a thorough investigation of all suggested possibilities. Mr Knowles took the results into account and made a decision reflecting his assessment of the competing considerations. He gave careful attention to the problem of overspill and came to a conclusion designed to reduce overspill as far as possible, consistently with ensuring proper reception throughout the service area. No doubt arguments might be made in favour of other solutions. But the decision made by Mr Knowles is easily defensible. It cannot be stigmatised as irrational.

44. Both grounds of invalidity argued on behalf of the applicants fail. Both Applications should be dismissed with costs.