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2004-2005-2006-2007
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
BROADCASTING LEGISLATION AMENDMENT (DIGITAL RADIO) BILL
2007
RADIO LICENCE FEES AMENDMENT BILL 2007
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator the Hon. Helen Coonan,
Minister for Communications, Information Technology and the Arts)
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BROADCASTING LEGISLATION AMENDMENT (DIGITAL RADIO) BILL
2007
RADIO LICENCE FEES AMENDMENT
BILL 2007
OUTLINE
The Broadcasting Legislation Amendment (Digital Radio) Bill 2007 (Digital Radio
Bill) implements the Government's policy framework for the introduction of digital
radio services in Australia.
The framework, announced in October 2005, was the culmination of an extensive
process of research, policy development and industry consultation. This included the
release of the report of the Digital Radio Study Group together with an issues paper
inviting submissions from interested parties on key issues relevant to the introduction
of digital radio. In initiating the policy development process, the Government
reiterated its principle election commitments in relation to digital radio, which
included a moratorium on the issue of new licence area planned commercial digital
radio licences, the inclusion of the community broadcasting sector in the digital
environment and the conduct of a transparent and accountable process for developing
the policy and regulatory settings for digital radio.
The Digital Radio Bill is intended to implement the framework for digital radio
broadcasting and transmission provided for through the announced policy framework.
The Digital Radio Bill will amend the Broadcasting Services Act 1992 (BSA), the
Radiocommunications Act 1992 (Radcomms Act) and the Trade Practices Act 1974
(TPA) to:
· enable the provision of digital radio services by commercial and wide-coverage
community radio broadcasting licensees, and the national broadcasters, using the
Digital Audio Broadcasting (DAB) technology;
· establish a new category of service, restricted datacasting, to enable the provision
of innovative data services on the digital radio platform;
· establish a new multiplex transmitter licence category to accommodate the shared
transmission platforms (`multiplexes') of the DAB system;
· provide the Australian Communications and Media Authority (ACMA) with
powers to undertake planning and licence allocation activities for digital radio
services;
· require incumbent commercial radio broadcasters and multiplex licensees to
commence, and to continue to provide, digital radio services in the case of the
state capital city markets on or before 1 January 2009;
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· provide the opportunity for existing commercial and wide-coverage community
broadcasters to control the multiplex licences for their initial services, with
subsequent licence allocations to be undertaken via a priced-based method;
· introduce a six year moratorium on the issue of new licence area planned
commercial digital radio licences from the commencement of services in the
respective market;
· establish minimum access rights to multiplex transmission capacity for the
commercial, wide-coverage community and national broadcasters on relevant
multiplex licences;
· establish a multiplex access regime to ensure operators of commercial multiplexes
provide access to transmission capacity on terms that are open, efficient and
generally non-discriminatory;
· provide the Australian Competition and Consumer Commission (ACCC) with
appropriate powers to enforce the access regime;
· provide ACMA with the power to determine technical standards relating to digital
radio and restricted datacasting services, the operation of digital radio multiplex
transmitters, and domestic digital reception equipment for radio services; and
· provide ACMA with the power to require industry to develop and register
voluntary codes of practice dealing with a range of digital radio and restricted
datacasting issues, and with a power to determine standards where such codes are
not developed or do not operate effectively.
Consequential amendments to the Radio Licence Fees Act 1964 will also ensure the
consistent application of licence fees to the revenue of commercial radio broadcasting
licensees derived from analogue and digital radio services. These amendments are
made in the Radio Licence Fees Amendment Bill 2007 (the Licence Fees Bill) which
is part of this package.
The Digital Radio Bill allows incumbent commercial radio broadcasters to provide
their analogue radio services, and one or more digital radio services, using their
existing licence. Any new digital commercial radio licensees in the future will also be
able to provide multiple digital services.
Commercial radio licensees are required to pay licence fees under the Radio Licence
Fees Act 1964. The fees payable are calculated on the basis of the `gross earnings' of
the licensee. The Licence Fees Bill amends the definition of `gross earnings' to reflect
the fact that commercial radio licensees will be able to earn revenue from the
provision of multiple services. The effect of the Licence Fees Bill is that all revenue
derived by a commercial radio broadcasting licensee from the airing of
advertisements or other matter on all services provided by the licensee will be
included for the purposes of calculating the licence fee.
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FINANCIAL IMPACT STATEMENT
The Digital Radio Bill is expected to have no significant impact on Commonwealth
expenditure. The potential future price-based allocation of digital radio multiplex
transmitter licences is likely to result in receipt of revenue. This revenue may be
reduced depending on the number of multiplex licences operating in each market
when the allocation occurs and on market assessments of the impact of the access
regime for digital radio multiplex transmitter licences. However, at this stage it is not
possible to predict with any accuracy the quantum of revenue likely to be received,
nor the likely impact of factors such as market structure and the access regime, as the
business model for digital radio multiplex transmitter licences has not been tested.
The ability to provide a greater number of services, and thus air a greater number of
advertisements, on the digital radio platform may increase the gross earnings of
commercial radio licensees. This would result in the Australian Communications and
Media Authority collecting more revenue from licence fees. However, there are a
number of factors which may mitigate this:
· While broadcasters will have a strong incentive to provide digital services (if they
do not provide services they will lose their authorisation to do so), they will not be
forced to do so.
· Broadcasters will not be prevented from providing at least some digital services
which are simulcasts of their analogue services. In this case it is unlikely that there
would be a change in licence fee revenue as a result of the Licence Fees Bill.
· It is unclear whether the introduction of new digital radio services will affect the
revenue raised by existing analogue commercial radio services. However, the
greater the benefit that commercial broadcasters see in the digital radio platform,
the more likely they are to provide multiple additional services.
Given these factors, any financial impact of the Licence Fees Bill is likely to be net
positive in terms of revenue but it is not possible to quantify this in advance of the
introduction of digital radio services.
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REGULATION IMPACT STATEMENT
BACKGROUND
Broadcasting services
The Broadcasting Services Act 1992 (BSA) sets in place a regulatory framework for
Australia's broadcasting industry that serves the public interest in all its dimensions
social, cultural and economic. It also seeks to meet the changing needs of industry
with a regulatory framework that supports the development of new technologies, such
digital video, audio and data services and new delivery mechanisms such as satellite
and cable.
The objects of the BSA (outlined in Section 3 to the Act) include, among other things,
encouraging diversity in the provision of radio and television services, promoting the
availability of a wide range of services and the provision of a regulatory environment
that encourages efficiency, competition and responsiveness to audience needs.
The BSA defines a number of categories of television and radio broadcasting services.
These are national broadcasting services services provided by the Australian
Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS),
commercial broadcasting services which are operated for profit and intended to appeal
to the general public, community broadcasting services provided for community
purposes, subscription broadcasting services that are intended to appeal to the general
public, but only on payment of subscription fees; and narrowcasting services which
are targeted to a special interest group, provided in a limited time period or location,
or provide a service of limited appeal.
Broadcasting spectrum
The Radiocommunications Act 1992 (Radcomms Act) provides for the management
of radiofrequency spectrum1, including providing a regulatory environment that
maximises opportunities for the Australian communications industry in domestic and
international markets.
Spectrum is non-homogenous. The varying properties of different frequencies make
some frequency ranges more suitable for particular uses than others. The planning of
spectrum attempts to take these issues into account when allocating various frequency
ranges to the various uses of spectrum including fixed links, mobile phones,
aeronautical and radionavigation, satellite, radioastronomy and broadcasting.
The Australian Communications and Media Authority (ACMA) has responsibility for
managing the Australian radiofrequency spectrum, including the Broadcasting
Services Bands (BSB), to minimise interference between various uses, provide for the
efficient allocation of spectrum and to manage equity issues associated with access to
1
Radiofrequency spectrum refers to that part of the electromagnetic spectrum in which electromagnetic waves can be
generated by alternating current fed to an antenna.
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this scarce public resource. Free to air broadcasting of television and radio services
primarily uses those parts of the spectrum designated as the BSB.
Digital radio
Digital radio offers a range of potential improvements over existing analogue radio.
Like digital television, digital radio technology allows for the delivery of a greater
quantity of information via the same amount of spectrum, providing for the more
efficient use of spectrum channels. It also potentially allows for a much greater
variety of forms of content to be delivered to the consumer's radio receiver.
Other potential strengths of digital radio over analogue include better sound quality,
reduced interference, the ability to pause or rewind, greater ease of tuning (with
channels identified by name rather than frequency), the provision of still images such
as maps or graphics (eg an album cover from which a song was played or a station
logo or advertising), program associated text (e.g. what song is playing, where it can
be purchased, the name of the artist, etc) and data services such as news, traffic and
weather updates.
A range of platform standards have been developed for digital radio internationally.
These include: Digital Audio Broadcasting (DAB, also known as Eureka 147); High
Definition (HD) Radio (previously known as In-Band On-Channel or IBOC); Satellite
Digital Audio Radio Services (SDARS); Digital Radio Mondiale (DRM), and
Terrestrial Integrated Services Digital Broadcasting (ISDB-T).
The UK, Germany and Canada have progressed significantly with the terrestrial
implementation of the DAB system. A number of other countries have also
commenced DAB services including France, Sweden, Portugal, Italy, Spain, Belgium
and Singapore. A variant of the DAB system, which incorporates the broadcast of
video services, Terrestrial Digital Media Broadcast (T-DMB) is also in various stages
of implementation in a handful of countries, including South Korea and Taiwan.
In the US, the Federal Communications Commission (FCC) has approved the
proprietary HD Radio system as the national standard for the introduction of
terrestrial digital radio broadcasts on a voluntary basis. HD Radio delivers a
narrow-band digital simulcast signal, plus a limited data capacity, alongside the
transmission of an existing analogue AM or FM radio service. Recent reports indicate
that the HD system is gaining increasing support from US broadcasters, although
some technical concerns remain. Direct to consumer satellite digital radio services
have also been available in the US on a subscription basis since 2001 using the
SDARS system.
ISDB-T is a wideband system similar to the DVB-T system used in Australia for
digital television. The ISDB-T system is understood to have been deployed in Japan.
DRM is a non-proprietary system specifically designed to deliver very wide area
coverage services in the high and medium frequency (HF and MF) bands. DRM is a
narrowband service that allows the provision of a single digital service, which is
suggested to be of around monophonic FM radio quality, and limited ancillary data
services. Implementation of DRM internationally to date has typically been limited to
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trials and periodic broadcasts, with only recent indications that equipment
manufacturers will be providing a range of DRM-capable portable and in-car sets.
Despite its promise, the overall experience with these digital radio technologies has
been disappointing. Take-up of digital radio has generally been slow in most markets,
resulting - in the case of Sweden and Finland - in the cutting back of the commitment
to the new platform. In other cases, such as with HD Radio in the US, there have been
ongoing concerns about the technical appropriateness and characteristics of the
technology.
More recently, however, there are some clear instances of successful implementation.
The two SDARS operators in the US have attracted approximately 13.6 million
subscribers in around 6 years of operation2 while in the UK, the number of DAB
digital radio receivers in the population has grown from just over half million in
March 2004 to an estimated 3 million in March 20063. These and other experiences
suggest that the successful introduction of digital radio is dependent on the adopted
system receiving wide support from broadcasters and the public, and demonstrating a
capacity to provide services that go beyond those available in analogue, such as new,
digital-only content or enhanced audio quality.
ISSUE
In Australia, and in most countries, radio is the most ubiquitous of all media. It can be
found in every home, car and workplace in the country. As with other media and
communications sectors, digitisation poses significant opportunities for expansion,
improvement and innovation in the radio services currently provided to audiences.
The digitisation of radio in Australia offers the potential for a range of benefits, many
of which were noted in general terms in the discussion above. For listeners, digital
radio holds the promise of improved reception and better audio quality, and digital
transmission systems have the potential to provide a more diverse range of enhanced
radio services than is possible in analogue. Digital radio also promises benefits for the
commercial radio industry including better advertising and sponsorship opportunities
through program associated text and images, additional data services, and the offer of
subscription services.
Other public benefits of digital radio include the potential of the technology to deliver
on a number of the Government's broadcasting policy objectives. The technology has
the potential to promote diversity, enhance broadcasting industry competitiveness,
and encourage the provision of innovative content that is responsive to audience
2
XM Satellite Radio, 5 January 2007, News Release: XM Adds Nearly 1.7 Million New Subscribers in
2006 for Total of More Than 7.6 Million Subscribers ... refer - http://www.xmradio.com.
Sirius Satellite Radio, 2 January 2007, News Release: SIRIUS Exceeds 6 Million Subscribers and
Achieves First Cash Flow Positive Quarter, refer - http://www.sirius.com
3
Dab-digital-radio.com, 5 May 2004, Half a Million DAB Radios, refer - http://www.dab-digital-
radio.com.
Ofcom, 10 August 2006, The Communications Market 2006, refer - http://www.ofcom.org.uk.
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needs. It may also provide in the longer term for more efficient and cost effective
provision of ABC and SBS services as well as an opportunity to serve a wider range
of audiences. A number of digital radio technologies also potentially offer greater
efficiency in the use of the radiocommunications spectrum.
The introduction of digital radio will, however, require consideration of a number of
constraints and limitations, many of which are specific to the Australian landscape.
The introduction of digital radio also raises an array of complex technical and policy
issues. Some of these key constraints and issues are discussed below.
As noted above, the implementation of digital radio overseas has, until recently, met
with limited success. It is clear from this experience that digital radio is unlikely to be
a replacement technology for analogue services and that analogue radio services will
operate alongside digital for a considerable period.
The likely role of digital radio as a supplementary technology to analogue has
implications for the way in which digital radio is introduced and, in particular, the
degree to which the introductory framework is able, or indeed should, pursue the
objective of replicating analogue radio services.
Spectrum issues are also a relevant factor in the development of a framework for
digital radio. In Australia, much of the spectrum suitable for the implementation of
digital radio services is currently employed for a range of uses including the
transmission of analogue and digital television and Defence communications. As a
result, unoccupied spectrum appropriate for digital radio is limited, particularly in the
major metropolitan markets such as Sydney and Melbourne.
These spectrum limitations will influence or otherwise constrain the possible
parameters of an implementation approach for digital radio, including: the timing for
the introduction of the new technology; the types of services that might be made
available (in particular services which go beyond what are currently available in
analogue, such as data services, text, graphics and services with enhanced audio
quality); and the scope to provide pathways for competitive entry to the radio market.
The current structure of the Australian radio market will also influence the
development of key settings for the introduction of digital radio. The quality and
diversity of Australian radio is based on the individual contributions made by the
commercial, national and community sectors. The successful introduction of digital
radio in Australia will hinge on the presence of each of these sectors, commensurate
to their current role and capacities, on the new platform.
Finally, Australia's geography and population distribution presents some unique
challenges for the introduction of digital radio which were not experienced in many
overseas markets to have introduced digital radio. On the basis of available
information, it appears that the most mature digital radio technologies may not
practically provide the same level of coverage as analogue AM and FM services,
particularly in regional areas. There are also uncertainties associated with the cost
associated with establishing digital radio infrastructure in regional and remote areas of
Australia.
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OBJECTIVE
In the context of the 2004 election, the Government made explicit its commitment to
ensuring a transparent and accountable process for the development a policy
framework for the introduction of digital radio that meets both industry and
community needs and expectations. Specifically, the Government committed to:
... continuing to work in partnership with industry and stakeholders to develop
an appropriate framework for the introduction of digital radio technology so
that all Australians have access to the best radio services possible, regardless
of where they live.4
OPTIONS
There are three broad options or approaches identified for the achievement of the
stated objective of articulating the key elements of an introductory framework for
digital radio:
- Option A: digital radio is an unknown technology, whose introduction should be
deferred (a `defer decision' model).
- Option B: digital radio is a replacement technology, with services to be introduced
via the conversion of existing analogue radio services to digital (a `conversion'
model).
- Option C: digital radio is a supplementary technology, with services to be
introduced via a progressive or staged approach (a `managed introduction'
model).
Option A Defer Decision
Option A would seek to defer the decision on key elements of an introductory
framework until there is further clarity on the role that digital radio services will play
in the wider radio market in the long term.
The benefits of Option A include the potential for greater spectrum efficiency
provided through the adoption of emerging advanced audio compression techniques
(more radio services per unit of spectrum and lower associated capital and ongoing
costs for digital radio infrastructure). Deferring the decision on elements of a digital
radio framework would allow digital radio to more clearly establish its viability as a
mainstream technology capable of matching the success of analogue radio
broadcasting.
However, the central disadvantage of Option A would be that it would delay access to
the public benefits arising from consumer demand for digital radio and potentially
affect the commercial viability of the operations of existing broadcasters with a
negative impact on the quality and diversity of existing analogue radio services.
Consumers in a number of countries around the world are already benefiting from the
4
The Howard Government, Election 2004 Policy: 21st Century Broadcasting, refer -
http://www.liberal.org.au.
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availability of digital radio services, albeit some years following their initial
introduction. In addition, the radio industry, and the commercial sector in particular,
have argued strongly that analogue radio is facing significant competition from the
internet, broadcast and other digital devices. The articulation of key elements of a
policy framework for digital radio would begin the process by which the radio
industry secured a `digital footing' with which to compete with these emerging digital
products.
In recognition of the potential for digital technology to enhance the radio services
available to Australians, the Government has, as noted above, explicitly indicated its
intention to undertake a transparent and accountable process for developing a policy
framework and an implementation strategy for digital radio.
As part of the policy development process, the Government released the report of the
Digital Radio Study Group and an associated issues paper to elicit the views of all
interested stakeholders (discussed in further detail in the `Consultation' section
below). This process was supported by a program of work conducted by the then
Australian Communications Authority and the Australian Broadcasting Authority
aimed at providing further clarity in relation to the technological and spectrum issues
discussed above. This process involved the investigation of a range of issues,
including the availability and performance of appropriate spectrum in markets.
In relation to participation in the digital commercial radio sector, the Government
made a commitment in its 2004 election campaign to introduce a moratorium on the
issue of new licence area planned commercial digital radio licences for an initial
period of five years. This will have the effect of restricting participation in the
commercial digital radio sector to the incumbent analogue broadcasters during the
moratorium period. The Government has also indicated that it will continue to work
with the community radio sector in the development of digital radio and is committed
to the inclusion of community broadcasters in the digital environment.
The Government has made clear via these commitments and processes that digital
radio is to be introduced once a policy and regulatory framework can be finalised.
Option A, to defer a decision on an implementation framework for digital radio, is not
realistic in these circumstances. Accordingly, the impact analysis of possible options
for achieving the stated objective is confined to Options B and C, and does not
include Option A.
For comparative purposes, the parameters proposed under each option are discussed
in terms of the implementation model, moratorium, regional assistance, simulcast and
content and multiplex arrangements
Option B `Conversion' Model
Option B would seek to introduce digital radio under a full conversion model similar
to that adopted for digital television that would seek to replace existing analogue
services. The key assumption unpinning this model is that digital radio is a
replacement technology for analogue. Commercial Radio Australia (CRA), the peak
industry body representing commercial radio broadcasters, has expressed strong
support for a conversion-based approach to digital radio and argued that radio be
treated in an equivalent manner to television in the move to digital.
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The key parameters of a possible framework for the introduction of digital radio under
Option B are outlined in the following table.
Issue Option B `Conversion'
Implementation model Full conversion of existing analogue services.
Commercial and national broadcasters moving first, possibly followed
by community broadcasters and narrowcasters.
Moratorium Extended moratorium (possibly in the order of 10 to 15 years) with
limitations on new or additional services.
Regional assistance Likely need for financial assistance to support regional infrastructure
rollout.
Simulcast and content Extensive simulcast period (possibly 20 years plus).
Restrictions on multi-channelling.
Limitations on new digital-only audio services.
5
Multiplex arrangements Allocation of adequate digital capacity for each commercial and
national radio broadcaster.
Limited capacity allocation for community and narrowcasters.
Commercial broadcaster ownership of transmitter licences and no
third party licensing.
Option C `Managed Introduction' Model
Option C has been developed as an alternative position to a full conversion model.
This model incorporates the Government's stated commitments to industry and
attempts to work within the constraints posed by the spectrum and technical
limitations noted above. The key assumption upon which this model is based, drawn
from overseas experience, is that digital radio is not a replacement technology for
analogue within a reasonable policy horizon, and that analogue radio will continue to
provide a valuable and unique role for some time. The key parameters of a framework
ASSESSMENT OF IMPACTS
The main elements of options B and C will, when considered together as part of a
framework for the introduction of digital radio, have a range of impacts on key
stakeholder groups; including commercial radio broadcasters, national broadcasters
(ABC and SBS), community radio broadcasters and consumers. The benefits and
costs of each option in terms of these stakeholder groups are presented below in
qualitative terms.
It should be noted that any significant quantitative analysis is not feasible given the
relatively high level nature of two options being considered. Use of the Government's
Business Cost Calculator (BCC) is reserved for analysis of specific regulatory issues
associated with the DAB multiplex (below). However, where possible, the following
discussion of digital radio approaches to the introduction of digital radio includes
comment on the likely incidence and significance of costs and benefits.
Option B
56
, Reference to multiplex arrangements assumes the adoption of the DAB technology in Australia.
The report of the Digital Radio Study Group found that if a decision were taken to move now on
terrestrial digital radio, the only realistic option for Australia would be DAB, which is mature and has
significant numbers and types of consumer receivers available. Unless otherwise stated, the analysis of
Option B and C is based on the introduction of digital radio in Australia using the DAB platform.
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Option B `Conversion'
Impacts on stakeholders
Stakeholder Benefit Cost
Commercial Secure existing industry profitability and Capital costs involved with digital
broadcasters limit the potential for competition, transmission infrastructure.
particularly under extended moratorium
arrangements. Capital cost of providing
digital services borne among the
maximum number of players. All
commercial broadcasters to receive
access to digital spectrum from
commencement.
National SBS and ABC will have the opportunity Little capacity to provide innovative digital
broadcasters to provide radio services in digital. content that builds on existing
programming. Likely requirement to
build/operate own transmission
infrastructure or pay for access to
multiplexes owned by other parties.
Community Community broadcasters provided with No rights to digital capacity for
broadcasters a place in digital, albeit subject to the community broadcasters effectively
requirements of commercial and relegated to a `second tier' of
national broadcasters being met first. broadcasting (particularly if services are
provided on alternative spectrum). Would
impose transmission costs for which the
sector is unlikely to be able to meet
without significant Government
assistance.
Consumers Consumers would have access to Provision of minimal new content and / or
digital radio services at least services of reduced audio quality, with
comparable to those available in little or no incentive to take-up digital
analogue. radio.
Under Option B, all existing analogue services would be replaced by digital services
(a `full conversion model'), similar to the approach adopted for the introduction of
digital television. There are a number of arguments to suggest, however, that the
replacement of analogue radio is an unfeasible policy objective for the introduction of
digital radio and a sub-optimal outcome in public interest and resource efficiency
terms.
In most major markets, there is currently insufficient spectrum to enable all existing
analogue radio services to move to digital broadcasting.6 Nor is there a technical
solution to offer digital conversion (were it financially feasible) to the large number of
localised services provided by community broadcasters and low powered open
narrowcasters (such as tourist radio).
Critically, the most mature digital radio technology, DAB, cannot provide the same
level of coverage as an analogue AM and FM services in regional areas. This would
mean that meeting the high rollout requirements that were part of the digital TV
model (same level of coverage as analogue) may be unrealistic.
Even in the absence of spectrum limitations or technical constraints, international
experience suggests that the replacement of analogue radio by digital is a long term
prospect at best. As noted previously, in the UK, considered to be at the forefront of
digital radio, the number of digital radio sets sold in the UK, although growing, still
6
Prior to analogue television closure, the only VHF Band III spectrum likely to be available in the
capital city markets is the 6 MHz Channel 9A, which can accommodate a maximum of three DAB
multiplex ensembles. VHF Band II (FM) and Medium Frequency (AM) spectrum is also heavily
utilised in most major population areas.
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constitutes around three per cent of the total estimated number of radio sets7, and
analogue radios accounted for 84 per cent of the total number of radios sold in the six
months to March 20068. The UK is also continuing a program of allocating new
analogue radio licences. This replacement issue is exacerbated in Australia given that
there are substantially larger numbers of analogue radio sets in Australia (40 million9)
than analogue television receivers (15 million10).
The net effect of an implementation model seeking to replace analogue with digital
would be the dual operation of the two platforms (possibly in excess of 20 years) prior
to the take-up of receivers reaching a level that would permit analogue closure. This
would have substantial cost implications for the broadcasters (including the national
and community broadcasters) and the Government. Finally, there is no clear
alternative use for analogue radio spectrum, suggesting there is no strong policy
rationale for a Government-driven analogue closure policy.
In terms of market structure, Option B may involve a moratorium of extended
duration, possibly in the order of 10 to 15 years. If a complete moratorium was
adopted, this might include any potential commercial digital service, such as data-
only services or digital commercial services delivered outside broadcasting spectrum.
As digital radio faces many of the same implementation challenges and potential
market uncertainties as digital television, there are grounds for providing a similar
period of protection from new commercial entrants in radio as was provided for
television. The moratorium for digital television provided an effective six year
moratorium from the commencement of the first digital television broadcasts on
1 January 2001.
However, the costs associated with an extended moratorium both in terms of
duration and breadth - are expected to be significant. The successful implementation
of digital radio is likely to be driven by new and innovative digital content. An
extended moratorium would provide little incentive for the investment in new services
expected to be critical in stimulating consumer interest in the new platform.
Moreover, the preclusion of entry to digital of those services that pose no direct
competitive threat to incumbent commercial broadcasters, such as community and
narrowcast broadcasters would appear to stifle an additional source of service
diversity in digital with little potential benefit.
The parameters of Option B propose that, as with digital television, assistance may
possibly be provided to regional broadcasters for infrastructure rollout. The television
model under which regional commercial broadcasters receive assistance (primarily by
7
Ofcom, 10 August 2006, The Communications Market 2006, refer - http://www.ofcom.org.uk.
The Guardian, 13 July 2004, Ofcom backs digital radio switch, refer - http://www.guardian.co.uk.
8
Ofcom, 10 August 2006, The Communications Market 2006, refer - http://www.ofcom.org.uk.
9
Paul Budde Communications, 2006, Australia Radio Overview and Statistics, refer -
http://www.budde.com.au.
10
Digital Broadcasting Australia, May 2005, Submission to House of Representatives Standing
Committee on Communications, Information Technology and the Arts inquiry into the uptake of digital
television in Australia, refer - http://www.aph.gov.au/house/committee.
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way of licence fee rebates) is designed to cover around 50 per cent of their costs
(capital and operating) for a specified period.
The likely costs of digital rollout are yet to be determined and will be a function of
key spectrum, rollout and technology decisions. Preliminary information from
industry suggests that regional rollout costs are likely to constitute the bulk of the
capital costs for commercial digital radio.
A mandatory simulcast period (possibly in the order 20 years or more), coupled with
tight restrictions on the capacity of incumbent broadcasters to provide new audio or
data content, are also elements of the proposed model. The purpose of a simulcast
period is to ensure that people depending on analogue receivers are not left behind
and disadvantaged in the conversion process.
However, and unlike digital television, digital radio is not a replacement technology
for analogue in the foreseeable future. Radio consumers will have a much longer
period to adjust to the new services and will make decisions about buying digital
radios primarily on whether the service provides a value supplementation of analogue
services. An extended simulcast period of 20 years or more would `soak up' most
available spectrum for digital radio and provide little reason for consumers to consider
buying digital radio. This would prevent consumers from accessing new digital
services that they may value.
In terms of transmission arrangements, Option B proposes that only incumbent in-
band commercial radio broadcasters be conferred the right to control multiplexes - the
transmission infrastructure used for digital radio which operates to broadcast together
the signals of a number of broadcasters and that third parties (non-broadcasters or
non broadcasting spectrum broadcasters) be prohibited from owning or controlling a
licence to operate a multiplex. The model also envisages each commercial and
national broadcaster be provided with adequate multiplex capacity to provide their
services.
Competition issues arise with the introduction of the DAB multiplex into the radio
value chain regardless of who controls the multiplex licence, as the operator is likely
to possess a degree of market power (with a potential `gate-keeper' function with
respect to access to multiplex capacity). Most countries that have adopted the DAB
technology have instituted a two-tier licensing regime, which separately licences
content providers from multiplex operators. Depending on processes for accessing
multiplex capacity, the separate licensing of the multiplex operator from the content
providers is seen to be one means of achieving the efficient allocation and use of
spectrum, allowing the multiplex operators to manage bit rate capacity between
services in response to demand and possibly permit the entry of new content providers
in digital.
Nevertheless, there is no inherent argument against broadcaster control of multiplex
operations. In the UK, a number of regional commercial multiplexes are controlled by
broadcasters and consortiums of broadcasters and third parties. It is not the case that
separate licensing of carriage and content is a necessary pre-requisite for efficient
spectrum use and the provision of new and innovative digital content. The key issues
under any model, regardless of who controls the transmission infrastructure, will be
the introduction of measures to ensure adequate arrangements for access to multiplex
capacity are established and that the multiplex is operated on a fair, equitable and
transparent basis.
- 15 -
With respect to the allocation of multiplex capacity, it is clear that spectrum
limitations, and the desirability of offering national and community broadcasters
broadly equitable spectrum access, places some restrictions on the amount of capacity
that may be used by existing analogue commercial broadcasters.
Option C
Option C managed introduction
Impacts on stakeholders
Benefit Cost
Stakeholder
Commercial Incumbent broadcasters provided with Lower bit rate per service than desired.
broadcasters initial access to the digital platform, Obligation to commence services within a
including ownership / operation of specified period and achieve specified
transmission infrastructure. Stable coverage requirements.
environment and protection during
moratorium period. If Government
funding for roll-out costs was agreed,
this would be a tangible benefit for
broadcasters in regional areas.
National Specific spectrum rights to jointly Lower bit per service than desired.
Broadcasters manage transmission facilities in all Additional capital and operational
markets, separate from other expenditure, some of which may need to
broadcasters. Capacity to provide be absorbed by the broadcasters.
additional digital content that builds on
existing programming. Potential to
provide full range of services throughout
metropolitan and regional areas.
Community Community broadcasters provided with Lower bit rate per service than desired.
broadcasters specific rights in digital, including option
to jointly participate in transmission Slightly lower rights than those accorded
management and minimum access to national and commercial broadcasters
rights per licence area. (reflecting spectrum limitations and lesser
capacity to substantially expand current
Potential for targeted financial operations). Additional capital and
assistance to support the sector's operational expenditure, some of which
participation in digital. may need to be absorbed by the
broadcasters.
Consumers Diversity of current radio services Limitation on new commercial services
maintained and enhanced in digital, with during the moratorium.
the availability of national broadcasting
and the obligation for commercial
licensees to rollout services, in
conjunction with community
broadcasters, within specified
timeframes. Consumers potentially
provided with a broad range of
innovative digital services from the early
stages of digital introduction, including
enhanced audio and data content.
Provision of new services from non-
broadcasting spectrum commercial
providers, data service providers and
(following the moratorium period) new
commercial entrants.
- 16 -
The implementation model proposed under Option C is based on the assumption that
digital radio will operate alongside analogue radio for the foreseeable future and is not
capable of replacing analogue services due to spectrum and other limitations.
Accordingly, the parameters of this option seek to introduce measures that provide the
flexibility for, and encourage, innovative, new digital services and to provide
pathways for new competitive entry. The aim of this approach would be to maximise
the consumer benefits of digital radio.
This model does not, however, seek to preclude aspects of a conversion model where
these either constitute articulated elements of the Government's preferred approach to
the introduction of digital radio, or are likely to contribute to the exploitation the
consumer benefits of digital radio in a manner consistent with established public
policy objectives for broadcasting. In this context, there are similarities between
Option C and a conversion approach (as in Option B) with respect to:
· the provision of initial access in digital for incumbent broadcasting spectrum
commercial, national and wide-coverage community services;
· the moratorium on new commercial entrants in the early stages of digital
implementation;
· possible financial support for regional commercial broadcasters; and
· the capacity for incumbent broadcasters to own and manage transmission
facilities.
However, the policy parameters of Option C diverge from the conversion model in a
number of key areas:
· the length and scope of the moratorium period;
· the form and extent of potential regional assistance for the commercial and
community broadcasting sectors;
· the requirement for simulcast of analogue services and restrictions of data and
audio services that may be provided in digital;
· transmission licensing and access to multiplex capacity; and
· the rights and roles of the respective broadcasting sectors in the initial stages of
digital introduction.
In terms of market structure, Option C proposes a 6 year moratorium on the issue of
new commercial digital radio licences using broadcasting spectrum. This period is
consistent with that provided for the commercial television sector that, as noted
above, faced similar implementation challenges and potential markets uncertainties to
those currently facing radio.
This six year moratorium period is also broadly aligned with the Government's
announcement in its 2004 election campaign to introduce a moratorium on the issue
of new licence area planned commercial digital radio licences for an initial period of
five years, as well as the regulator's general policy that it does not propose to allocate
any further analogue commercial radio licences within five years of the last
allocation.
However, in contrast with Option B, the proposed moratorium under Option C is
balanced with appropriate pathways for new entry. There will be no restrictions on
digital radio services delivered outside the broadcasting spectrum (i.e. over the
Internet and via cable and satellite subscription TV services) and scope will be
retained for satellite digital radio services should a commercial proposition emerge.
- 17 -
In contrast with Option B, these measures attempt to balance the Government's
commitment to providing incumbent broadcasters with a stable environment during
their digital radio investment phase achieved through the time limited moratorium
with the need to ensure sufficient participants in digital to drive the digital radio
platform.
With respect to assistance for regional broadcasting, the parameters of the Option C
provide for the possible provision of targeted financial assistance for infrastructure
rollout by commercial broadcasters in regional markets. In this context, it is
acknowledged that the costs of rollout in regional markets are likely to constitute the
bulk of the capital costs for commercial digital radio. However, the decision as to
whether and in what form any such assistance may be provided would be a matter for
the Government.
With regard to content regulation, the international experience of digital radio
suggests consumers place a high value on a differentiation of services on the digital
platform, particularly where customer equipment enables listeners to access the
analogue services over the same device. It will therefore be critical that the policy
settings for the introduction of digital radio provide sufficient flexibility and
incentives for broadcasters to offer new and innovative content in digital in order to
stimulate consumer interest and up-take of the new platform.
In the absence of regulatory obligation, it is likely that commercial factors will ensure
that the bulk of content on digital radio will be a simulcast of analogue services.
However, a mandatory simulcast obligation (as proposed under Option B) for a
platform where replacement of analogue services is a long term prospect would
represent a significant spectrum drain, with no clear consumer benefit, and would
have also major cost implications for Government (in relation to the running costs of
non-commercial broadcasters).
While Australia's digital television system was implemented under an approach
which included a mandatory simulcast requirement, this was intended to protect
consumers in the transition from analogue to digital by ensuring less expensive
analogue receivers provide a comprehensive service until switch off. The same policy
drivers are not apparent with respect to digital radio.
Option C does not propose a mandatory simulcast of existing analogue services, or
limitations on the types of additional radio or data services that can be broadcast. This
will avoid the disincentives for consumers in terms of buying digital radio, and for
broadcasters in terms of investment in the development of new and innovative
content, inherent in mandatory simulcast obligations or excessive content restrictions.
In terms of transmission arrangements, it was noted previously that while competition
issues arise regardless of who controls the multiplexes, there is no inherent argument
against broadcaster control of multiplex operations provided regulations are in place
to ensure multiplexes are not operated in an anti-competitive way and that access
seekers (community broadcasters, data providers and potential new commercial
broadcasters post-moratorium) are not frustrated by the multiplex operator.
Accordingly, Option C proposes the following multiplex management and access
arrangements:
- 18 -
· Commercial broadcasters, and wide-coverage community broadcasters if they
wish, will be provided with an opportunity to elect to jointly operate multiplexes
for their services in a licence area. Any such election would be subject to
committing to a series of minimum requirements to ensure the joint venture
operates fairly and transparently.
· If a valid election is made, the relevant multiplex transmitter licence would be
licensed to the joint venture by the regulator for an administrative charge only. If
the incumbents do not elect to manage the multiplex, the Government would by
default reserve the right to allocate the relevant spectrum to others.
· Under either scenario, legislated access provisions would guarantee commercial
broadcasters access to a minimum transmission capacity and the ability to flexibly
acquire additional capacity to offer a wider range of services. They would also
provide access rights for wide-coverage community broadcasters and any data
providers. Access rules would require fair and reasonable terms, including non-
discriminatory pricing and provision for the regulator to intervene if necessary.
With respect to the allocation of multiplex capacity, there are a number of factors
which support a two-tiered approach. Spectrum limitations in major metropolitan
markets mean that it is not possible to allocate sufficient multiplex capacity to provide
for all commercial, national and community services. Further, the allocation of fixed
percentages of multiplex capacity without the capacity to trade such allocations will
reduce the potential for efficiencies in the use of capacity and possibly inhibit the
incentives to provide new digital-only services.
In order to encourage new content and an element of competition within multiplexes,
incumbent commercial broadcasters will have an entitlement to a capped amount of
capacity, with the ability to acquire additional capacity on the condition that this is
used to deliver new content. Reflecting spectrum pressures and their limited capacity
to fund their involvement in digital, wide-coverage community broadcasters in any
market would have a joint access right to sectoral allocation of capacity on the on the
basis that they collectively determine how this is to be shared.
With respect to the national broadcasters, Option C proposes that these broadcasters
be allocated provided with the opportunity to jointly manage a multiplex in all
markets separate from other broadcasters. This will enable them to continue to acquire
those services through open tender and will enable them to provide a common range
of digital services throughout Australia.
CONSULTATION
In the mid 1990s the then Government formed a Digital Radio Advisory Committee to
commence formal studies exploring options for the introduction of digital radio in
Australia. The committee released its report in 1997 and in 1998 the Digital Radio
Planning and Steering Committee was tasked with building on this work and progressing
implementation plans. Uncertainties about technology preferences, commercial viability
and a lack of commitment from some stakeholders prompted digital radio trials and
delayed a decision on introduction of the new platform.
In 2003 a Digital Radio Study Group was tasked with reporting to Government on the
implementation of major digital radio technologies internationally, their relative merits
- 19 -
in the Australian context, and the implications of the alterative technologies with respect
to technical standards or regulatory considerations.
In December 2004, the Minister for Communications, Information Technology and the
Arts released the Study Group report together with an issues paper to elicit the views of
all interested stakeholders. This release formed part of the Government's 2004 election
commitment to undertake a transparent and accountable process to develop a policy
framework and implementation strategy for digital radio (this commitment constitutes
the objective of this Impact Statement). The election commitment also included a
moratorium on the issue of new licence area planned commercial digital radio licences
for an initial period of five years, and to the inclusion of community radio broadcasters
in the digital environment.
Formal submissions to the review process closed for this process on 20 April 2005.
Submissions were received from radio broadcasters and representative groups and some
other interested individuals. Submissions were invited to address issues raised in the
Issues Paper including the options discussed in this Impact Statement. The Department
of Communications, Information Technology and the Arts also met with major radio
sector stakeholders including industry bodies and the national and major commercial
radio broadcasters.
The views regarding an appropriate implementation model for digital radio in
Australia were mixed and broadly divided between support for either full conversion
or some form of introduction more consistent with the managed introduction of Option
C (i.e. a phased introduction recognising current spectrum availability limitations and
the need to encourage those sections of the industry with an interest in driving
consumer take-up to take the lead in introducing digital radio services). CRA and
Broadcast Australia (BA) were strongly of the view that digital radio is a replacement
technology and that Australia should adopt a full conversion approach to
implementation.
In relation to spectrum availability, the view expressed by BA, the Community
Broadcasting Association of Australia (CBAA) and a range of other submittants was
that spectrum constraints would necessarily require some decisions to be made
concerning in relation to the DAB system the allocation of capacity for services
and the number of services per multiplex. Most interested parties acknowledged that a
managed introduction would help resolve these issues in the short term, however CRA
expressed the view that spectrum constraints are not significant enough to prevent the
conversion to digital of all incumbent commercial radio broadcasters.
A range of other issues were raised including multiplex operation CRA have
outlined their position that only broadcasters should own and operate multiplexes,
while BA has indicated its willingness to provide third-party multiplex services. On
the issue of content, BA and the national broadcasters consider that new audio and
data content would be significant contributors to consumer take-up. CRA also
acknowledged the role that data services could play but expressed the view that only
services provided by broadcasters and associated with the main audio stream should be
allowed.
CONCLUSION AND RECOMMENDATION
Option C is the preferred option as it strikes a balance which recognises the role and
legitimate interests of incumbent broadcasters, while seeking to promote the
consumer benefits of digital radio by encouraging new services and providing
pathways for new competitive entry.
- 20 -
Both Options B and C would provide for a significant role for Government in relation
to managing and, potentially, funding the rollout of digital radio services. Among a
range of concerns, the lack of appropriate digital radio spectrum makes the feasibility
of a conversion model (Option B) doubtful, at least in the short to medium term.
IMPLEMENTATION & REVIEW
The adoption of an approach of managed introduction for digital radio was endorsed
by Government in October 2005 with the release of a high level policy framework to
guide the introduction of digital radio in Australia. This release culminated the
extensive process of policy development, research and consultations initiated in 2003.
The elements of the announced policy framework can be categorised in terms of the
key constraints and issues relevant to the consideration of digital radio in Australia.
Issue Policy Parameter
· Digital radio will supplement existing analogue radio services for a
Role of the technology
considerable period and may never be a complete replacement.
· Subject to further technical advice, it is expected that where possible
Spectrum availability
VHF Band III spectrum will be used for primary digital radio transmitters
of commercial, wide-coverage community and national broadcasting
services.
L Band is expected to be used for infill, localised services and where
VHF Band III spectrum is unavailable, or insufficient.
· L-Band spectrum planning will include reservation of capacity for
potential satellite digital radio services.
· Significant spectrum limitations currently exist for the introduction of
digital radio in key markets (including major metropolitan and adjacent
areas). The Government will consider releasing additional spectrum for
new digital radio services in relevant markets following the closure of
analogue television services, subject to demand and other competing
uses for the spectrum.
· The Government will ask the Australian Communications and Media
Authority (ACMA) to give priority to reserving adequate VHF Band III
spectrum for digital radio purposes when planning new digital television
services, unless there are clear technical or consumer interests in the
use of that spectrum for television.
- 21 -
· Digital Audio Broadcasting (DAB, also known as Eureka 147) will be
Technology choice
the primary technology platform for BSB digital radio. However, it is a
mature technology and international standards bodies are now
considering newer versions, with more advanced compression
standards, that will enable more efficient spectrum use. The
Government will give further consideration to the feasibility of adopting
these later standards.
· DAB is unlikely to be a suitable platform to address the extended
coverage requirements of some regional and remote services. The
Government will continue to monitor developments with digital radio
technologies, including Digital Radio Mondiale (DRM), to determine
what supplementary platforms might be appropriate to address regional
and remote coverage issues.
· The Government considers that technical trials of digital radio
technologies, including DRM, need to be undertaken to determine
which technologies or combination of technologies will best serve
people living in regional and remote Australia.
· Planning for the introduction of terrestrial digital radio will initially focus
Timing for introduction
on providing the spectrum to enable existing licence area planned state
capital commercial, national and wide-coverage community
broadcasters to commence digital radio services.
· Planning for the introduction of digital radio for existing licence area
planned commercial broadcasters in other areas will be considered
subsequently and on the basis of broadcaster interest in delivering
digital services in the relevant licence area.
· Planning for the introduction of digital radio for existing licence area
planned wide-coverage community and national broadcaster services
in other areas will be considered at a later stage.
· Those categories of Broadcasting Services Bands (BSB) broadcasters
not party to the initial planning process, including narrowcasters and
localised community broadcasters, will be considered at a later stage.
· The provision of non-BSB digital radio services by operators of non-
BSB delivered services, including section 40 licensees, will continue to
be a commercial decision for relevant operators. The Government will
continue to consider options for these broadcasters to deliver digital
radio services outside the BSB.
- 22 -
· Incumbent commercial and, if they choose, wide-coverage community
Transition
broadcasters, in a licence area will have first right of refusal to elect to
arrangements
jointly (by way of a separate joint venture company) manage the
operations of the multiplex ensembles and hold the associated
spectrum licences, to be used for their services in that market, subject
to meeting specific regulatory requirements regarding the transparency
and openness of the joint venture operation. If they so elect, spectrum
licences will be allocated for an administrative charge only.
· Where a valid election is not made in a licence area, the Government,
by default, may allocate transmission licences to operate digital radio
multiplex ensembles.
· Access rules will be established to assure commercial radio
broadcasters and the wide-coverage community radio sector of access
to minimum levels of capacity on multiplex ensembles, on published
and non-discriminatory terms.
· Commercial broadcasters will have minimum rights to acquire 128 kbps
of multiplex capacity with the ability to acquire additional capacity
(capped at 256 kbps and subject to bit rate availability limits in each
market) on the condition that this is used to deliver new services.
· Jointly, wide-coverage community broadcasters in any market will have
access rights to 128 kbps per analogue service (up to a maximum of
256 kbps per available multiplex) on the basis that they collectively
determine how this is to be shared.
· Persons licensed to offer non-radio services will also have the right to
acquire unreserved capacity on a multiplex to a maximum of 128 kbps,
on published and non-discriminatory terms.
· Provision will be made for regulatory intervention by the ACCC to
manage multiplex access, including to address access disputes and
anti-competitive conduct.
· Spectrum allocation and licensing arrangements will continue to be
managed by ACMA.
· Spectrum will be reserved for the national broadcasters equivalent to
one multiplex ensemble with appropriate transmission licences to
enable them to jointly manage single multiplex ensembles in each state
capital and subsequently other markets. The role and timing of national
broadcaster involvement in digital radio will be considered further in the
context of normal budget processes.
· A moratorium will be introduced on the issue of new BSB commercial
digital radio licences for a period of six years following the
commencement of digital radio services in state capital markets. This
moratorium will be subject to:
the conditions set out in Australian Broadcasting Authority
-
(Revisiting Radio LAPs) Direction No.1 of 2003. This Direction is
designed to allow for the issuing of a new licence by ACMA in
circumstances where a change of ownership results in a reduction
in the number of radio services of general appeal in the market;
and
the commercial broadcasters in the licence area complying with
-
the digital implementation framework, including the rollout and
coverage requirements.
· Depending on the success of rollout in state capital areas, the
Government will consider providing some capped financial assistance
for the capital costs associated with rollout of digital transmission
facilities by commercial broadcasters in regional areas.
- 23 -
· Digital radio services will be subject to existing content regulation
Types of services
arrangements administered by the Australian Communications and
Media Authority (ACMA) applying to analogue radio services
(including codes of practice, standards and licence conditions).
· There will be no requirement on broadcasters to simulcast their
analogue service in digital.
· Subject to content regulation arrangements, there will be no limitations
on types of additional radio or data services that can be broadcast.
· A new licence category will be established to enable non-radio
broadcasters to make use of the digital radio platform to deliver non-
radio services.
· In the case of state capitals, existing licence area planned commercial
digital radio licensees will be required to commence permanent
broadcasts within a specified, legislated period and provide equivalent
digital coverage to their existing analogue services by the end of the
six year moratorium period.
· In other areas, where existing licence area planned commercial digital
radio licensees are given access to additional broadcasting spectrum
for digital radio services, they will be required to commence
permanent broadcasts within a specified period and meet coverage
and rollout commitments appropriate to such markets.
On 4 April 2006, the Minister announced the Government's agreement to the drafting
of legislation to implement this framework, providing for the introduction of digital
radio services in the state capital markets by 1 January 2009. Implementation of the
framework will require amendment to the Broadcasting Services Act 1992,
Radiocommunications Act 1992, Radio Licence Fees Act 1964 and Trade Practices
Act 1974, as these Acts don't currently provide for the licensing or regulation of
digital radio services.
These amendments are introduced by the Broadcasting Legislation Amendment
(Digital Radio) Bill 2006 and the Radio Licence Fees Amendment Bill 2006.
However, one area where specific regulatory impacts are likely to arise is in relation
to the transmission of DAB digital services. Existing transmission arrangements for
radio are based on separate transmission equipment for each service; that is, one
spectrum channel corresponds to one broadcast service. In contrast, the DAB platform
provides for the delivery of multiplex services on one wideband channel. This
situation gives rise to a range of access and competition issues not present in analogue
broadcasting, as outlined in the `Issue' section below.
ISSUE MULTIPLEX ACCESS
Current limits on available spectrum for digital radio severely restrict the number of
multiplexes that can be made available in the major state capital cities. Prior to
analogue television closure, the only VHF Band III spectrum likely to be available in
the capital city markets is the 6 MHz Channel 9A, which can accommodate a
maximum of three DAB multiplex ensembles (assuming these services are transmitted
from the same sites within the respective licence areas).11 With spectrum equivalent to
11
VHF Channel 12 (223-230 MHz) is available in Hobart.
- 24 -
one mulitplex ensemble reserved for the national broadcasters (as announced in the
Government's policy framework), a maximum of two multiplexes may be established
in each of the state capital markets to accommodate commercial and wide-coverage
community broadcasting stations (as per the announced framework).
By virtue of these restrictions, the licensee of the multiplex for commercial and
community services herein referred to as the multiplex licensee has the ability to
exercise market power in the market for multiplexed DAB digital radio services.
Access seekers (commercial or wide-coverage community broadcasters, or data
service licensees12) need to use the monopoly facility to provide a digital radio
service. This creates a potential bottleneck for multiplex services and may allow the
multiplex licensee to act as gatekeeper in providing access to the multiplex.
If unregulated, a multiplex licensee could exploit their market power by charging
above market prices to businesses using their facilities or otherwise imposing
unreasonable restrictions on the use and distribution of multiplex capacity, with
adverse effects on access seekers and the radio listening public at large. This issue is
further complicated where the multiplex licensee is vertically integrated in a
commercial sense with downstream services. Where the entity controlling the
multiplex licence is vertically integrated into the potentially competitive downstream
market, the broadcaster members of the consortium controlling the multiplex licence
have an incentive to restrict a non-consortium member's access to the service, or to
offer terms and conditions of access which are discriminatory.
Similar incentives are present in a range of non-broadcasting infrastructure facilities,
including gas transmission and distribution pipelines, electricity transmission and
distribution, railway track networks, airport systems, water pipelines, certain sea ports
and telecommunication networks. A number of these facilities are subject to access
regimes which generally seek to establish the rights of third parties to gain access to
bottleneck services on terms and conditions that promote competition in the provision
of services to end-users.
In digital radio, the position of the multiplex licensee provides a clear rationale for the
development of an appropriate access regime for digital radio multiplex services,
giving parties the opportunity to access multiplex facilities on reasonable terms and
conditions (subject to the availability of capacity), without compromising incentives
to develop and maintain such facilities.
This rationale was reflected in the Government's announced framework for the
development of digital radio, which stated that access rules will be established to
assure commercial radio broadcasters and the wide-coverage community radio sector
of access to minimum levels of capacity on multiplex ensembles, on published and
non-discriminatory terms. In addition, the management of multiplex access will be
undertaken by the Australian Competition and Consumer Commission (ACCC), with
provision made for appropriate regulatory intervention including to address access
disputes and investigate anti-competitive conduct.
12
Data services refer to services other than a traditional, audio-based radio. The Broadcasting
Legislation Amendment (Digital Radio) Bill 2006 provides for the delivery of services of this type
under a restricted datacasting licence.
- 25 -
OBJECTIVE
To ensure multiplex services (including bit rate) are provided to commercial,
wide-coverage community and data service operators on terms and conditions that are
efficient, open and transparent, and generally non-discriminatory.
OPTIONS MULTIPLEX ACCESS REGIME
Within the general parameters for an access regime set out in the Government
announced framework for digital radio there are options for the scope of such
regulation:
· Option A conditions of access established and published by the multiplex
licensee no ex ante regulatory oversight.
· Option B conditions of access established and published by the multiplex
licensee and subject to approval by the ACCC.
· Option C conditions of access determined by the ACCC.
Option A `Licensee-Determined Conditions'
This option would involve a limited regulatory approach whereby the multiplex
licensee would establish and publish the terms and conditions of access to multiplex
capacity in accordance with the objective that the access regime be efficient, open and
transparent, and generally non-discriminatory.
While the ACCC would have no formal role in the assessment and/or approval of
published terms and conditions of access, the Commission would be responsible for
investigating anti-competitive conduct (as appropriate) in a manner consistent with
their established role under the Trade Practices Act 1974 (TPA).
Option B `ACCC Approved Conditions'
This option provides for a moderate level of regulatory intervention modelled on key
elements of existing access regimes, in particular Part IIIA of the TPA (National
Access Regime).
Multiplex licensees would be required to develop comprehensive access undertakings,
setting out all relevant terms and conditions of access to multiplex capacity, and to
submit these undertakings to the ACCC for approval.
The ACCC would assess the undertakings submitted having regard to criteria
determined by the ACCC. The ACCC would retain the capacity to approve
undertakings where it is satisfied that the relevant criteria are met.
- 26 -
Option C `ACCC Determined Conditions'
This option would involve a high level of initial regulatory intervention, with the
ACCC determining ex ante the terms of conditions of access to multiplexed
transmission services. While it is expected the ACCC would be required to take into
consideration the views of the multiplex licensee and access seekers, the terms and
conditions of the access would ultimately remain a matter for the ACCC. The ACCC
may have a role in arbitrating disputes between the multiplex consortium and access
seekers under this option.
ASSESSMENT OF IMPACTS
Options A, B and C will impact upon the multiplex licensees, access seekers and the
ACCC. These impacts are discussed and assessed below, predominantly in qualitative
terms. These three options are also examined using the Government's Business Cost
Calculator (BCC). While the BCC estimates may be useful in the assessment of the
relative impacts of each option, they should be treated with caution. Accurate
information on the likely input costs for complying with each of the regulatory options
is not available. The BCC estimates are therefore, at best, indicative of the possible
regulatory costs of each option. Limited weight should be given to these estimates for
the purposes of assessing each option.
Option A
Option A would favour the multiplex licensee by limiting the administrative burden
associated with complying with a more comprehensive access regime and limiting the
capacity of access seekers to obtain assistance in negotiating access to the multiplex.
It would result in access to the multiplex being on terms and conditions specified by
the multiplex licensee without specific regulatory oversight of those conditions prior
to the notification of an access dispute.
The ex post role for the ACCC under this option would limit the initial safeguards
available to access seekers and is likely to poorly address the incentives for the
multiplex licensee to leverage their market position by refusing access, or providing
access on terms and conditions that are unreasonable.
Option A also provides an incentive for open-ended and potentially excessive access
disputes as the terms and conditions of access are not subject to any regulatory
approval against a set of established criteria prior to dispute. As such, arbitration and
transaction costs may be higher under this option.
Option B
Option B is similar to the existing provisions of Part IIIA of the TPA, providing
industry with the flexibility to manage the multiplexes while retaining a level of
regulatory safeguard through the ACCC's role in assessing and approving access
undertakings.
Subject to acceptance of undertakings by the ACCC, the multiplex licensee is
afforded the flexibility to manage the operations of the multiplex as appropriate, and
to control the use and distribution of capacity in an efficient and equitable manner.
- 27 -
The process of having the undertaking accepted by the ACCC could be expected to
limit the likelihood of disputes and lower the associated arbitration costs as the
undertakings would set out the terms and conditions of access, rather than relying on
commercial negotiation and/or arbitration.
The ex ante role for the ACCC under this option is likely to provide greater certainty
for radio and data service providers seeking access to multiplex capacity and may act
to mitigate the incentive for the multiplex licensee to leverage their market position
by refusing access, or providing access on terms and conditions that are unreasonable.
Option C
Option C entails a more prescriptive approach by providing for the ACCC to
determine the terms and conditions of the access arrangements at the outset, removing
this level of control from the multiplex licensee.
By removing the multiplex licensee from the establishment of the terms and
conditions upon which it will ultimately provide digital radio multiplex services,
Option C introduces a level of regulatory uncertainty to the business decisions of the
multiplex licensee prior to the determination of terms and conditions by the regulator.
Compliance costs
Analysis is based on the six state capital markets where it is assumed that incumbent
commercial broadcasters will elect to manage the multiplexes and control the
associated licences. As such, the proposals would impact on a total of 12 commercial
broadcasters who collectively control 45 licences across the six markets (a market-by-
market breakdown of controllers and services is provided at Appendix A).
It is further assumed that, at a general level, the costs of establishing processes to
comply with the requirements of an access regime may be moderate in so far as a
single `template model' may be able to be developed and used as the basis for each of
the commercial multiplex licensees. Any development costs are assumed to be shared
across the participating commercial broadcasters, relative to their existing licence
holdings. However, these costs are not apportioned to the community sector on the
basis that community licensees in some or all of the six state capital markets may or
may not wish to jointly manage with the commercial licensees the operations of the
multiplexes and to control the associated licences.
The ongoing compliance costs would vary according to the requirements of the
regime and whether or not it gives rise to a greater or lesser number of access
disputes. This remains unknown and estimates are not provided. Estimates of the
regulatory costs of establishing an access regime, and the share of these costs to be
met by commercial broadcasters, are as follows:
Option B ACCC Approved
Conditions $51,220 $520 - $10,350
Establishment Cost per
Option C ACCCName
Option Establishment Cost
Business (range)
Determined Conditions $25,730 $260 - $5,200
Option A Licensee
Determined Conditions $49,730 $500 - $10,050
- 28 -
These establishment costs have been developed taking into account the tasks that
could be expected to be undertaken in complying with each option. For Options A and
B, these tasks include staffing costs associated with the development of an access
regime or undertakings (respectively), consultation within the industry, amendments
to the regime or undertakings following consultation, and regulatory approvals. For
Option C, these tasks relate to industry staffing costs associated with regime
development and industry consultation, reflecting the fact that a proportion of the
development costs associated with this option will be initially incurred by the ACCC,
rather than multiplex licensees.
For each option, the cost estimates do not include those incurred by the ACCC. Any
such costs would be a matter for the ACCC to determine at a later time and in
accordance with their own budgeting processes. Similarly, the issue of whether the
Commission meets those costs within budget, seeks supplementary funding, or cost-
recovers from industry, would be a matter for the ACCC to determine.
CONSULTATION
The following have provided input to the development of the access regime:
ACCC
The ACCC expressed a preference for the application of the general access provisions
of Part IIIA of the TPA to third party access issues, to the extent possible. The ACCC
has generally indicated support for Option B and the proposed role it would play in
assessing access undertakings. The ACCC has not provided specific comment on the
regulatory costs associated with the proposed access regime.
Industry
The radio industry representative body, CRA, has been consulted on the issue of
multiplex access. While providing general comment on the timing and development of
the legislative framework for digital radio the industry has not provided specific
comment on compliance costs associated with the proposed access regime.
CONCLUSION AND RECOMMENDATION
In the absence of ex ante regulatory oversight, it is highly likely that the terms and
conditions of access determined solely by the multiplex licensee (Option A) would be
inequitable and may distort the downstream market for digital radio services as the
multiplex licensee has a strong incentive to take advantage of their market position by
refusing access, or providing access on terms and conditions that are unreasonable.
Requiring the ACCC to arbitrarily determine the terms and conditions of access
(Option C) is seen as being overly prescriptive as it removes the flexibility of the
multiplex consortium to manage the operations of the multiplex and introduces a level
of uncertainty for the mulitplex licensee. However, it may be useful to retain a reserve
power for the ACCC to determine the conditions of access if undertakings are
unacceptable.
- 29 -
Option B is considered to be the more balanced approach, mitigating the potential
misuse of market power by the multiplex licensee through the access undertakings
process, while also providing certainty for efficient investment in both multiplex
facilities and digital radio content services.
This approach has been developed in consultation with the ACCC and is generally
consistent with existing access regimes for bottleneck and natural monopoly
infrastructure facilities, such as gas and electricity transmission and distribution,
railway track networks and airport systems.
Estimated regulatory costs of Option B are in the order of $51,220, which is
comparable with Option A, but higher than those for Option C. As noted above, these
estimates should be treated with caution as they are not supported by reliable input
cost data.
Option B is the recommended option (with a reserve power for the ACCC to
determine arrangements as necessary) as it is considered to most fully meet the
objective ensuring the efficient management of the multiplex and access to multiplex
facilities by commercial, wide-coverage community and data service operators on
terms and conditions that are efficient, open and transparent, and generally non-
discriminatory.
IMPLEMENTATION AND REVIEW
The access regime would be administered by the ACCC. No changes would be
required to the TPA. The BSA will require amendment to introduce the regime and
establish the obligation for multiplex licensees. These amendments will form part of
the Broadcasting Legislation Amendment (Digital Radio) Bill 2006.
The Digital Radio Bill includes a requirement that the Minister cause to be conducted,
before 31 December 2014 (the nominal end of the moratorium period in the state
capital city markets) a review of the operation of the multiplex access regime with
regard to whether the regime should be amended or repealed.
ISSUE CAPACITY DISTRIBUTION
The announced framework for the introduction of digital radio sets out minimum bit
rate entitlements for incumbent commercial and wide-coverage community
broadcasters13:
· Commercial broadcasters to have minimum rights to acquire 128 kbps of
multiplex capacity with the ability to acquire additional capacity (capped at 256
kbps and subject to bit rate availability limits in each market) on the condition that
this is used to deliver new services.
13
The minimum bit rate entitlements are defined in the Broadcasting Legislation Amendment (Digital
Radio) Bill 2006 as standard capacity entitlements.
- 30 -
· Jointly, wide-coverage community broadcasters in any market will have access
rights to 128 kbps per analogue service (up to a maximum of 256 kbps for the
sector per available multiplex) on the basis that they collectively determine how
this is to be shared.14
Decisions regarding the distribution and use of multiplex capacity will generally be
best made by the multiplex licensees who would operate as a `clearing house' for
capacity use (subject to meeting the relevant conditions of the access undertakings
including standard access entitlements).
However, in all markets there will be a certain quantum of multiplex capacity that is
not being used by incumbent commercial or wide-coverage community broadcasters
(referred here on as excess capacity). This excess capacity would include bit rate that
is surplus to that necessary for the standard access entitlements. Using likely
multiplex operating parameters, this capacity is likely to be in the order of 384 kbps in
Sydney and Melbourne, 768 kbps in Brisbane, 1024 kbps in Perth and Adelaide and
512 kbps in Hobart (assuming the allocation of only one multiplex).
OBJECTIVE
To ensure multiplex services (including bit rate) are provided to commercial,
wide-coverage community and data service operators on terms and conditions that are
efficient, open and transparent, and generally non-discriminatory.
OPTIONS
There are a number of options for utilising excess capacity:
· Option A excess capacity distributed by the multiplex licensee (no specific
regulatory oversight `Autonomous Licensee Distribution').
· Option B excess capacity distributed by the multiplex licensee through the access
regime (`Regulated Licensee Distribution').
· Option C excess capacity distributed by ACMA (`ACMA Distribution').
Option A `Autonomous Licensee Distribution'
14
Following the announcement on the framework there have been moves to incorporate more advanced
compression schemes within the DAB digital radio standard. The effect of this incorporation will be to
enhance the efficiency of the current standard. However, the adoption of a new compression scheme is
expected to reduce the total amount of transmission capacity available on a multiplex. In light of this,
the Broadcasting Legislation Amendment (Digital Radio) Bill 2006 provides for a technology-neutral
approach to the definition of minimum entitlements. This has been achieved by defining entitlements in
terms of one ninth of multiplex capacity rather than 128 kbps. Using the existing DAB standard, 1
ninth of multiplex capacity will be equivalent to 128 kbps of net transmission capacity. The bit rate
available using a more advanced compression scheme is likely to be lower than 128 kbps (perhaps in
the order of a 10 per cent reduction). However, the number and quality of services that may be
provided using this bit rate is expected to exceed that of the older standard.
- 31 -
Option A would allow decisions regarding the use and distribution of capacity to be
made by multiplex licensees without any specific regulatory oversight. That is, it
would be open to the licensees to determine to whom additional available excess
capacity might be allocated and by what method (subject to the general terms and
conditions of the access undertakings being met). In particular, these would include
ensuring each of the commercial and wide-coverage community broadcasters
operating on each multiplex has the opportunity to access their respective standard
access entitlements, as prescribed by the Government's announced framework.
Option B `Regulated Licensee Distribution'
Option B would retain the multiplex licensee's autonomy to manage and distribute
excess capacity (Option A), but would bring this rationing or allocation process more
specifically within the access undertakings outlined in multiplex access regime
Option B.
The multiplex licensee would be required to allocate excess capacity in a manner
consistent with a set of general principles as set out in the access regime. These could
include:
· The multiplex licensee to be required to ascertain the level of demand for access
to excess capacity on a multiplex15 from eligible service providers: commercial,
wide-coverage community and data service licensees.
· Where the excess capacity sought by interested parties was equal to or less than
the available capacity (i.e. supply > demand), the multiplex licensee would
distribute capacity under a set of conditions (contractual or otherwise) that were in
line with the terms and conditions of the undertakings, including price assuming
the adoption of recommended Option B above.
· Where the excess capacity sought by interested parties was found to be greater
than the available capacity (i.e. demand > supply - anticipated to be the case in
most markets), the multiplex licensee would distribute capacity via an open and
transparent auction process.
Option C `ACMA Distribution'
Option C would involve ACMA allocating available capacity to entitled participants,
presumably via an open tender or auction process. To be effective, ACMA would
need to be able to monitor and identify in a timely manner excess capacity to be made
available.
15
A process for ascertaining excess demand could include, for example, an online trading system
comparable with those used for trade in financial assets such as shares.
- 32 -
ASSESSMENT OF IMPACTS
Option A would provide the multiplex licensee with significant flexibility in the
management of excess capacity and service delivery. However, this would appear to
offer little transparency to access seekers in relation to the process and method for
capacity allocation.
Further, where there is vertical integration between the access provider (multiplex
licensee) and access seekers (broadcasters) expected to be the case in all markets
where the incumbent commercial and wide-coverage community broadcasters validly
elect to manage multiplexes there is a strong incentive for the incumbent
broadcasters to restrict a non-member's access to the service, or to offer terms and
conditions of access which are discriminatory.
Option B would retain the multiplex licensee's autonomy to manage and distribute
excess capacity, but would require through undertakings that this be conducted in
a manner consistent with the general principles established through the legislation.
The non-discriminatory process for the identification and distribution of capacity
would encourage the equitable management and rationing of available excess capacity
while also mitigating the potential for a vertically integrated multiplex supplier to
discriminate against access seekers not party to the multiplex management operations.
Option C would provide for the greatest level of regulatory intervention in the
distribution of excess capacity. However, it is unlikely that the regulator could be
expected to be in a position to identify and allocate available capacity in a timely
manner, particularly where this may become available in a dynamic context (e.g.
hourly). This is likely to impose substantial costs for the regulator and may distort
incentives for the multiplex licensee to manage the capacity of the multiplex in an
efficient manner.
Compliance costs
Analysis is based on the assumption that a system for monitoring and managing
multiplex capacity use on a day to day basis is a core business cost for the multiplex
operator, not a compliance cost. As such, under Option A there are not expected to be
any regulatory costs to business.
Establishment Ongoing
Ongoing Cost
Establishment Cost per Cost per
Option Name
Cost Business Business
(p.a)
(range) (range)
Option A
`Autonomous Licensee
Distribution' N/A N/A N/A N/A
Option B `Regulated
Licensee Distribution' $12,000 $120 - $2,430 $4,770 $50 - $970
- 33 -
Option C `ACMA
Distribution' $12,000 $120 - $2,430 - -
Under Option B, the multiplex licensee would bear the costs of establishing
procedures for notifying the market of excess capacity, and of distributing that excess
capacity through the access regime. It is assumed that these costs will be shared across
the joint venture participants. The costs to each commercial broadcaster would be a
function of the number of licences they hold and channels they operate in the six state
capital markets.
Under Option C, the cost of a system for managing capacity is again assumed to be a
core business cost (as per Option A), however it is assumed the multiplex licensee
would be required to notify ACMA of excess capacity and would therefore need to
establish procedures as in Option B. Under this option, any allocation of excess
capacity would be conducted by ACMA with associated ongoing costs assumed to be
at least equivalent to, or possibly higher, than those incurred by the multiplex joint
venture for the same task under Option B.
It would be a matter for ACMA as to whether these costs were cost recovered from
participants. The cost to each commercial broadcaster from Option C would be a
function of the number of licences they hold and channels they operate across the six
markets. Estimated regulatory costs under this option are therefore directly comparable
to Option B.
These business compliance cost estimates for Options A, B and C do not include
those incurred by ACMA. Any such costs would be a matter for ACMA to determine
at a later time and in accordance with their own budgeting processes. Similarly, the
issue of whether ACMA meets those costs within budget, seeks supplementary
funding, or cost-recovers from industry, would be a matter for the ACMA to
determine.
CONSULTATION
The ACCC and ACMA were consulted on the regulation of excess capacity and
distribution. Neither the Commission nor the Authority indicated specific concerns
with the recommended approach (see `Conclusions and Recommendation' below).
The radio industry representative body, CRA, has been consulted on these issues.
While providing general comment on the timing and development of the legislative
framework for digital radio, the industry has not provided any specific comment on the
regulatory options for rationing excess capacity or the associated regulatory costs.
CONCLUSION AND RECOMMENDATION
Decisions regarding the distribution and use of excess capacity will generally be best
made by the multiplex licensee, as the party with the expertise and incentives to fully
utilise available capacity in an efficient and effective manner. However, the multiplex
licensee has a strong incentive to limit or otherwise discriminate against access
seekers not party to the multiplex management operations, particularly where the
licensee is vertically integrated with downstream services.
- 34 -
Option B would allow the multiplex licensee to operate as a `clearing house' for
capacity use while mitigating the potential incentives for misuse of the licensee's
market position in distribution decisions.
Estimated regulatory costs of Option B are in the order of $12,000 in establishment
costs and around $5,000 p.a. ongoing, which is comparable with Option C, but higher
than those for Option C. As noted above, these estimates should be treated with
caution as they are not supported by reliable input cost data.
Option B is the recommended option.
IMPLEMENTATION AND REVIEW
The regulation of excess capacity distribution would form part of the access regime to
be introduced through the Broadcasting Legislation Amendment (Digital Radio) Bill
2006. The access regime is to be administered by the ACCC. No changes would be
required to the TPA.
The Digital Radio Bill includes a requirement that the Minister cause to be conducted,
before 31 December 2014 (the nominal end of the moratorium period in the state
capital city markets) a review of the operation of the multiplex access regime with
regard to whether the regime should be amended or repealed. This would include the
arrangements for the distribution and use of excess capacity.
- 35 -
APPENDIX A
COMMERCIAL RADIO LICENCES IN THE
SIX STATE CAPITAL MARKETS
Sydney Melbourne Brisbane Adelaide Perth Hobart Total
Austereo Group Ltd 2 2 2 2 2 10
DMG Radio Australia 2 2 1.5 2 0.5 8
Australian Radio Network 2 2 1.5 2 0.5 8
Southern Cross
Broadcasting Ltd 1 2 2 2 7
Macquarie Regional
RadioWorks (MRR) 2 2
Macquarie Radio Network 2 2
Grant Broadcasters 1 1 2
Pacific Star Network 2 2
Broadcast Operations 1 1
TAB Limited 1 1
Unitab Limited 1 1
3UZ Pty Ltd (Vic Racing) 1 1
Sub Total 11 11 8 6 6 3 45
- 36 -
NOTES ON CLAUSES
BROADCASTING LEGISLATION AMENDMENT (DIGITAL RADIO) BILL
2007
Clause 1 - Short title
Clause 1 provides for the citation of the Broadcasting Legislation Amendment
(Digital Radio) Act 2007.
Clause 2 - Commencement
Clause 2 provides for clauses 1 to 3 of the Broadcasting Legislation Amendment
(Digital Radio) Bill (the Bill) to commence on the day on which the Act receives
Royal Assent.
Clause 2 provides that amendments to the Broadcasting Services Act 1992 (BSA), the
Radiocommunications Act 1992 (Radcomms Act) and the Trade Practices Act 1974
(TPA) made by Schedule 1 of the Bill commence on the day after the day on which
the Act receives Royal Assent.
Clause 2 provides that amendments to the Radcomms Act and the TPA made by
Schedule 2 of the Bill commence the later of:
(a) immediately after the commencement of Schedule 1 to this Act; and
(b) immediately after the commencement of section 155AAA of the TPA.
However, the provision(s) do not commence at all if the event mentioned in
paragraph (b) does not occur.
The Corporations (NZ Closer Economic Relations) and Other Legislation Amendment
Bill 2007 includes proposed new s 155AAA of the TPA 1974, which would provide
information-sharing arrangements between Australian Communications and Media
Authority (ACMA) and the Australian Competition and Consumer Commission
(ACCC) including in relation to digital radio multiplex transmitter licence access
undertakings. If the Corporations (NZ Closer Economic Relations) and Other
Legislation Amendment Bill 2007 is passed, the information sharing provisions in it
would replace the provisions in the Bill which provide similar information sharing
arrangements (see Items 1, 2 and 3 of Schedule 2).
Clause 3 Schedule(s)
By virtue of this clause, provisions of the BSA, the Radcomms Act and the TPA are
amended as set out in the Schedules to the Bill.
- 37 -
SCHEDULE 1 AMENDMENTS COMMENCING ON THE DAY AFTER
ROYAL ASSENT
Items 1 and 2 Subsection 6(1)
Items 1 and 2 insert new definitions into subsection 6(1) of the BSA of `analog
commercial radio broadcasting service' and `analog community radio broadcasting
service'.
Items 11, 12 and 13 insert new definitions into subsection 6(1) of the BSA for `digital
commercial radio broadcasting service', `digital community radio broadcasting
service', and `digital national radio broadcasting service'.
Digital radio transmission will be a supplementary technology rather than a
replacement technology. In certain contexts and for certain purposes, the legislation
will differentiate between radio services according to transmission mode. Some
aspects of the regulatory framework will relate only to services provided in digital
mode while other aspects will relate only to analog services. Therefore, definitions of
radio services by reference to transmission mode are necessary.
Item 3 Subsection 6(1) (definition of `broadcasting services bands')
Item 3 inserts into section 6 of the BSA a new definition of `broadcasting services
bands'. New subparagraph 6(1)(b) will work in conjunction with new section 31(1A)
of the Radcomms Act (see Item 149 of Schedule 1) to provide for an extension of the
broadcasting services bands (BSB) to enable the transmission of digital radio
broadcasting services and restricted datacasting services. Spectrum constraints for
digital radio mean that services are likely to need to be transmitted using BSB
spectrum as well as spectrum currently outside the BSB; the latter including, for
example, `L-Band' (1.5 GHz). This spectrum will be partly for the purposes of digital
radio broadcasting and restricted datacasting services. It is intended that other non-
broadcasting services currently utilising this spectrum will not be affected by any new
designation referred under new sub-paragraph 6(1)(b), see Item 92.
Item 4 Subsection 6(1) (definition of `commercial radio broadcasting licence')
Item 4 inserts a new definition of `commercial radio broadcasting licence', which will
operate in conjunction with new section 41D (see Item 26 of Schedule 1). The
definition describes the type of service or services authorised by a commercial radio
broadcasting licence by reference to the allocation date of the licence and/or the
section of the BSA under which it was issued. The new definition of commercial
radio broadcasting licence recognises that when operating in digital mode, licensees,
other than those licensed under section 40, will be able to provide more than one
service under the same licence.
Items 5,6,7
- 38 -
Items 5, 6 and 7 add or replace definitions in subsection 6(1) of the BSA. The new
definitions in items 5 and 7 are to apply for the purposes of the new regulatory
framework for digital radio. Item 6 is a minor technical change.
Item 8 Subsection 6(1) `community radio broadcasting licence'
Item 8 inserts a new definition of `community radio broadcasting licence' into the
BSA, which includes the new sub-category of community radio broadcasting licence
created for the purposes of digital radio, called a `designated community radio
broadcasting licence'. The new definition of community radio broadcasting licence
recognises that certain categories of licence, when operating in digital mode, will be
able to provide more than one service under the same licence. A definition of this
new sub-category is provided in new section 8AA (see Item 26 of Schedule 1).
Items 9 and 10
These Items add or replace existing definitions in subsection 6(1) of the BSA. The
new definitions are to be used in the new regulatory framework for digital radio.
Item 11 Subsection 6(1) definition of `designated community radio
broadcasting licence'
Item 11 inserts a definition of `designated community radio broadcasting licence', by
cross-reference to new section 8AA (see Item 26 of Schedule 1). New section 8AA
defines a `designated community radio broadcasting licence' as a community
broadcasting licence operating in the broadcasting services bands of spectrum which
has a licence area the same as the licence area of a commercial radio broadcasting
licence (or is taken to have a licence area the same as the licence area of a commercial
radio broadcasting licence under new section 8AD).
Items 12, 13 and 14
See Items 1 and 2 above.
Item 15 - Subsection 6(1) definition of `digital program enhancement content'
Item 15 inserts a definition of `digital program enhancement content' into section 6 of
the BSA. `Digital program enhancement content' in relation to a radio program is
defined as content in the form of text, or still visual images, or in a form specified in a
legislative instrument made by the Minister, or a combination of any of these forms.
The inclusion of this content as part of a digital radio program gives effect to the
Government's intention that broadcasters and consumers should benefit from the
advantages afforded by digital technology which include the provision of content
other than traditional audio-based programming.
The power given to the Minister under paragraph 6(1)(c) to broaden, by specification
in a legislative instrument, the forms of content that could be provided as `digital
program enhancement content' allows for additional types of content to be brought
within the meaning of `digital program enhancement content'. This may allow, for
- 39 -
example, consideration to be given to specifying services such as animation to be
provided as `digital program enhancement content'.
Under proposed paragraphs (f) and (g) in the definition of digital programme
enhancement content inserted into subsection 6(1), to fall within the meaning of
`digital program enhancement content', content must be able to be received (where
the reception equipment is capable of receiving both the radio program and the
program enhancement content) by tuning the reception equipment to receive the radio
program in relation to which the digital program enhancement content is provided.
That is, the radio service delivering the radio program must also deliver the `digital
program enhancement content'.
The provisions in the Bill do not require the subject matter of `digital program
enhancement content' to be linked to the subject matter of the radio program.
Item 16
Item 16 inserts a definition of `digital radio moratorium period' into section 6 of the
BSA. `Digital radio moratorium period' is defined (by reference to new subsection
35C(3) (see Item 37 of Schedule 1)) as, for a licence area, the 6-year period beginning
at the start of the `digital radio start-up' day for the licence area. `digital radio start-up
day' is defined in new section 8AC (see Item 26 of Schedule 1).
This moratorium gives effect to the Government's commitments announced in the
context of the 2004 election and provides incumbent commercial broadcasters a level
of stability and certainty during the digital radio investment phase. The six year
duration is consistent with the period of regulatory protection provided for digital
television.
Items 17, 19 and 21
Items 17, 19 and 21 incorporate definitions relating to digital radio multiplex
transmitters licences and multiplex capacity from the Radcomms Act into section 6 of
the BSA. By way of background, the Bill provides for the implementation of digital
radio based on European Digital Audio Broadcasting (DAB) standard. The DAB
platform requires a number of digital radio services to be jointly broadcast on the one
wideband channel using a shared transmission infrastructure known as a `multiplex'.
The Bill amends the Radcomms Act to provide for a new category of transmitter
licence called a `digital radio multiplex transmitter licence'.
Item 18
Item 18 inserts a definition of `digital radio start-up day' into section 6 of the BSA by
reference to new section 8AC. (See Item 27 of Schedule 1))
Item 20
Item 20 inserts a note at the end of the definition of licence area relating to section
8AD.
Item 22
- 40 -
Item 22 inserts a definition of `national radio broadcasting service' into section 6 of
the BSA.
Item 23 definition of `radio program'
Item 23 inserts a definition of `radio program' which is affected by proposed section
8AB (see Item 26 of Schedule 1). Section 8AB provides that `digital program
enhancement content' is taken to be a radio program. By categorising `digital program
enhancement content' as `a radio program' this provision means that commercial and
community radio broadcasting licensees can provide such content under their
licences.
Item 24 definition of `restricted datacasting licence'
Item 24 inserts into section 6 of the BSA a definition of `restricted datacasting
licence'. This new sub-category of datacasting licence is defined as a licence that is
issued in response to an application for a `restricted datacasting licence'. An
application for a `restricted datacasting licence' can be made under new subclause
7(3) of Schedule 6 of the BSA (see Item 105 of Schedule 1).
A `restricted datacasting licence' can be used to provide a `restricted datacasting
service' (see Items 25 and 110 of Schedule 1).
Item 25 definition of `restricted datacasting service'
Item 25 inserts into section 6 of the BSA a definition of `restricted datacasting
service'. A `restricted datacasting service' is defined as a service provided under a
`restricted datacasting licence'. A `restricted datacasting licence' is subject to special
conditions (see Item 110 of Schedule 1).
Item 26 `designated community radio broadcasting licence'
Item 26 inserts new section 8AA, which will establish a new sub-category of
`community radio broadcasting licence' called a `designated community radio
broadcasting licence'.
New section 8AA defines a `designated community radio broadcasting licence' as a
Part 6 (community broadcasting) licence (other than a licence allocated under
subsection 82(1) (which is to operate outside the BSB) which:
· has a licence area the same as the licence area of a commercial radio
broadcasting licence (or is deemed to have a licence area the same as the licence
area of a commercial radio broadcasting licence under new section 8AD), and
· satisfies conditions (if any) as set out in a legislative instrument made by ACMA.
Proposed new subsection 8AA(2) will enable the Minister to direct ACMA about
the exercise of its power to make conditions.
This provision will give effect to the Government's commitment to allow only wide-
coverage community radio broadcasters to broadcast in digital mode, in the initial
phase of digital radio introduction (see also Item 26 (new section 8AD) and Items 8
and 11 of Schedule 1).
- 41 -
Item 26 `digital program enhancement content' taken to be a radio program.
Item 26 also inserts new section 8AB which relates to `digital program enhancement
content'. A definition of `digital program enhancement content' is inserted into
section 6 of the BSA (see Item 15 of Schedule 1). Section 8AB provides that `digital
program enhancement content' is taken to be a radio program when delivered by a
commercial, community or national radio broadcaster providing a digital radio
service. New section 8AB provides for broadcasters and consumers to benefit from
the advantages afforded by digital technology, which include the provision of content
other than traditional audio-based programming, by defining this content as radio
programming.
Item 26 `digital start-up day'
Item 26 also inserts new section 8AC which provides for ACMA to declare a
specified day to be the `digital start-up day' for a licence area.
Subsection 8AC(1) requires ACMA, before making such a declaration, to be satisfied
that it has taken sufficient action in relation to planning requirements, that one or
more foundation digital radio multiplex transmitter licences have been issued for the
licence area, that the multiplex capacity is sufficient to fulfil the standard access
entitlements of commercial broadcasters and that an access undertaking is in force for
the multiplex licence or licences. This does not require ACMA to have completed
planning for the licence area in question as further planning may be required, for
example, in relation to further transmitters to enhance signal coverage in the future.
The provision allows ACMA to declare a different start-up day for each licence area.
However, this is subject to the requirement that for metropolitan licence areas
(defined in subsection 8AC(8)), ACMA must not declare a `digital radio start-up day'
that is later than 1 January 2009 (paragraph 8AC(3)(a)).
ACMA must ensure that the `digital radio start-up day' for a regional licence area is
the day specified for the regional licence area in a legislative instrument made by the
Minister (paragraph 8AC(3)(b)). The power given to the Minister to declare the
digital start-up day in regional areas is consistent with the Government's intention to
allow planning for regional services to be initiated in accordance with broadcaster
interest in providing digital radio services in those areas.
Under new subsections 36A, 41D, 84A and 85A of the BSA (see Items 30, 39, 50 and
51 of Schedule 1), the delivery of digital services is not authorised before the `digital
radio start-up day'for a licence area and after digital start-up day licences can only be
allocated as either digital or analog.
Under new subsection 35C(3) (see Item 37 of Schedule 1) the commencement of the
moratorium period for a licence area will be the `digital radio start-up day' for the
licence area, and therefore will not be later than 1 January 2009 for metropolitan
licence areas.
ACMA's declaration (which is not a legislative instrument) must be made available
on its Internet site and cannot be issued before the day declared to be the start-up day.
- 42 -
ACMA must notify its intention to declare the date at least 30 days in advance (see
subsections 8AC(2) (4) (5) and (7)).
In section 8AC licence area is defined as the licence area of a commercial radio
broadcasting licences (or a community radio broadcasting licensee which is the same
as a commercial radio broadcasting licensee). Metropolitan licence areas are defined
in as areas in which the GPO of the capital city of each state is located. The licence
area known as Western Suburbs Sydney RA1 is deemed to be the same licence area as
the Sydney licence area for the purposes of digital radio (see Item 26 of Schedule 1).
Regional licence areas are defined as those areas not included in the definition of
metropolitan licence areas.
Item 26 `Deemed radio broadcasting licence areas'
New subsection 8AD(1) provides that, for the purposes of digital radio, commercial
radio broadcasting licensees which operate in the licence area known as Western
Suburbs Sydney RA1, will be deemed to operate in the Sydney RA1 licence area.
The commercial radio licence areas of Sydney and Western Suburbs Sydney have a
large population overlap. The technical arrangements for digital radio multiplex
transmitter licences mean that it is not possible for both licence areas to operate for
the purposes of digital radio. This amendment will ensure that commercial radio
licensees will be able to operate digital services in Sydney, where the majority of their
listeners are located. Listeners in the section of the Western Suburbs licence area
which falls outside the Sydney licence area will not be served by digital commercial
radio services. This amendment will have no effect on analog services.
New subsection 8AD(2) provides that, for the purposes of section 8AA and 8AC and
other aspects of the regulatory framework relating to digital community radio
broadcasting services, the licence areas known as Hobart RA2 and Hobart RA4 are
taken to be the same as the commercial radio broadcasting licence area in which is
situated the General Post Office of Hobart. This provision addressed a situation
arising in relation to Hobart where two community radio broadcasting services (7RPH
and 7THE) provide services to a significant proportion of the population of the
commercial licence area (Hobart RA1), although they technically operate in different
licence areas (Hobart RA2 and Hobart RA4 respectively). These services should be
regarded as wide-coverage community broadcasting services and therefore enabled to
provide digital services.
Subsection 8AD(3) enables ACMA to determine by legislative instrument, for the
purposes of new sections 8AA and 8AC, that a specified licence area of a community
radio broadcasting licence is taken to be the same as a specified licence area of a
commercial radio broadcasting licence. The Minister may direct ACMA in relation to
the exercise of this power (section 8AD(4)). This provision has been included to
remedy a situation parallel to that of Hobart where the licence area of a wide coverage
community broadcasting station does not exactly match that of the relevant
commercial licence area, should this arise in another area. As community and
commercial radio broadcasters will be delivering their services from a common
multiplex with the same transmission characteristics it is appropriate to provide that
wide-coverage community radio licence areas are the same as commercial radio
licences areas in these circumstances.
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Item 27
Item 27 inserts new subsections into section 18, which prevent digital commercial,
digital community or digital national radio broadcasting services from being
categorised as open narrowcasting services for the purposes of the BSA. This
provision ensures that new digital radio services, provided by digital radio
broadcasters are categorised as broadcasting services and cannot be categorised as an
open narrowcasting service.
Items 28, 29 and 30 Subsection 25(1)
Items 28, 29 and 30 make consequential amendments to subsection 25(1) of the BSA.
Item 31 `Frequency Allotment Plans'
Item 31 inserts new subsection 25(1A) which operates in conjunction with new
subsection 31(1A) of the Radcomms Act (see Item 149 of Schedule 1). Subsection
25(1A) requires ACMA to prepare frequency allotment plans (FAPs) for those parts
of the spectrum that are designated as being partly for digital radio broadcasting
purposes under subsection 31(1A) of the Radcomms Act. ACMA must prepare a FAP
that determines the number of channels that are to be available in particular areas of
Australia (using the section 31(1A) spectrum) for digital commercial, digital
community, digital national and restricted datacasting services. ACMA may vary such
FAPs.
Item 32 `Frequency Allotment Plans'
Item 32 inserts new subsection 25(4) which provides that ACMA is not required to
have regard to sections 23, 24 or 27 in developing or varying a FAP for digital radio
services or restricted datacasting services for the spectrum designated under
subsection 31(1) or subsection 31(1A). It is unnecessary for ACMA to re-examine all
the issues examined in developing the FAP, because digital radio services will be
introduced on the basis of existing licence areas with services provided, for the most
part, by existing licensees or after preparation of Licence Area Plans (which have
regard for sections 23, 24 and 27) and preparation Digital Radio Channel Plans (see
Item 154 of Schedule 1) which involves public consultation processes.
Items 33 and 35 make technical amendments to clarify that Licence Area Plans are
legislative instruments.
Item 34 `Licence Area Plans'
Item 34 inserts new subsection 26(1A), which provides that, to the extent to which a
licence area plan deals with digital commercial, digital community or digital national
radio services, the licence area plan (LAP) is not required to determine the technical
specifications of those services. Digital radio services are to be provided on multiplex
transmitters and technical specifications will relate to these transmitters and will
therefore be developed in the Digital Radio Channel Plan (see Item 154 of Schedule
1) supplemented by Technical Planning Guidelines issued by ACMA under section 33
of the BSA.
Item 36 `Licence Area Plans'
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Item 36 inserts new section 26C.
New subsections 26C(1) and (3) provide that LAPs are not required to deal with
commercial or community digital radio broadcasting services provided under licences
in force immediately before the `digital radio start-up day' for the licence area which
authorise digital transmission. Requiring ACMA to replan the digital radio services of
incumbent licensees would add unnecessary costs and delays in the rollout of digital
radio as the licences providing these services are already planned through existing
LAPs.
New subsection 26C(2) provides that LAPs are not required to deal with digital
services provided under a digital commercial radio broadcasting licence allocated in
accordance with new subsection 35D(3). Existing LAPs will not need to be varied
because the new licensee will be allocated a license under new subsection 35D (3) and
will replace the existing BSA licensee, in relation to the delivery of digital radio
services in the licence area.
Item 36 also inserts new section 26D.
New section 26D provides that LAPs dealing with digital commercial, digital
community or digital national radio broadcasting services are not required to identify
each individual digital radio service, but can deal collectively with the digital radio
services that, from time to time, are, or are to be, transmitted under the digital radio
multiplex transmitter licence by licence type, for the licence area. This provision will
enable LAPs to deal collectively with the services to be provided on the multiplex
transmitter licences in a market, rather than each individual digital broadcasting
service (see also Item 34 of Schedule 1).
Item 37 `Moratorium'
Item 37 inserts new section 35C into the BSA.
New section 35C provides for a six year moratorium on the issue of new digital
commercial radio licences in the broadcasting services bands in a licence area,
beginning at the start of the `digital radio start-up day' for the licence area.
Item 37 also inserts new section 35D.
New section 35D provides that the continuity of the moratorium in any licence area is
contingent upon the provision of at least one digital commercial radio broadcasting
service by each commercial radio broadcasting licensee. The section requires ACMA
to allocate a new digital commercial radio broadcasting licence for the licence area if
a commercial radio broadcasting licensee whose licence to provide one or more
digital services was in force immediately before the `digital radio start-up day' for the
licence area does not provide at least one digital commercial radio broadcasting
service during the digital radio moratorium period for the licence area (i.e. after the
`digital radio start-up day' for the area).
In these circumstances, under proposed s35D(2), ACMA is also required to
determine, by written notice to the licensee, that the digital commercial radio
broadcasting licence ceases to authorise the licensee to provide one or more digital
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commercial radio broadcasting services in the licence area, and that the incumbent's
licence only authorises transmission in analog mode, despite subsection 36A(5) (see
Item 38 of Schedule 1). A determination made by ACMA under section 35D will be
reviewable by the Administrative Appeals Tribunal (see Item 65 of Schedule 1).
New Subsection 35D(4) enables ACMA to specify, by legislative instrument,
circumstances in which a commercial radio broadcasting licensee is taken to be
providing a digital commercial radio broadcasting service. It is feasible that there may
be circumstances where a licensee is legitimately unable to meet a continuity of
service provision, for example, where interruptions to the provision of digital radio
service in a licence area were directly or indirectly caused by factors outside the
reasonable control of the licensee such as weather damage to transmission or
distribution equipment. Proposed subsection 35D(4) would provide flexibility to deal
with such circumstances by enabling ACMA to specify the circumstances in which a
licensee is taken to be providing a service.
Item 38 `Commercial radio broadcasting licences to provide analog or digital
commercial radio broadcasting services'
Existing section 36 provides for the allocation of commercial radio broadcasting
licences without reference to transmission mode. New section 36A categorises
commercial radio broadcasting licences that have been, or are to be, allocated under
section 36 as licences to provide analog and/or digital commercial radio broadcasting
services.
New subsection 36A(1) provides that commercial radio broadcasting licences in force
immediately before the commencement of the section are taken to have been allocated
as licences to provide an analog commercial radio broadcasting service.
New subsection 36A(2) provides that a licence allocated after the commencement of
the section but before the `digital radio start-up day' must be allocated as a licence to
provide an analog commercial radio broadcasting service.
New subsection 36A(3) provides that commercial radio broadcasting licences
allocated on or after the `digital radio start-up day' must be allocated as either a
licence to provide an analog commercial radio broadcasting service or as a licence to
provide a digital commercial radio broadcasting service or services.
New subsection 36A(4) provides that a licence allocated as a licence to provide an
analog service is subject to a licence condition that the licensee may only provide an
analog service. This subsection applies to licences in force before the
commencement of this section as well as licences allocated after the commencement
of the section but before the `digital radio start-up day'. It also applies to licences
issued after the `digital radio start-up day' to provide analog services.
New subsection 36A(5) provides that, at the start of the `digital radio start-up day' for
the licence area, the licence condition in 36A(4) ceases to apply to analog licences in
force immediately before the `digital radio start-up day' for a licence area. This
provision allows incumbent licensees to provide services in digital mode from the
`digital radio start-up day' for the licence area, using their existing BSA licences, i.e
they will not need to obtain a separate digital licence.
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Authorisation for the delivery by these licensees of digital services under existing
BSA licences is provided in new paragraph 41D(3)(d)(see Item 39 of Schedule 1)).
Authorisation for the continued delivery of analog services is provided under new
paragraph 41D(3)(c)(see Item 39 of Schedule 1)). These provisions reflect the
Government's intention that digital radio will be a supplementary rather than a
replacement technology.
New subsection 36A(6) provides that a commercial radio broadcasting licence
allocated as a licence to provide digital commercial radio broadcasting services is
subject to a licence condition that the licensee may only provide digital radio
broadcasting services under the licence.
New subsection 41D(5) provides that such a licence is taken to authorise the provision
of one or more digital commercial radio broadcasting services in the licence area (see
Item 39 of Schedule 1).
The provisions in section 36A are subject to section 35D and do not apply to
commercial radio broadcasting licences allocated under section 40(1) of the BSA.
Item 39 `Services authorised by commercial radio broadcasting licences'
Item 39 inserts new section 41D into the BSA.
New section 41D prescribes the services (by reference to transmission mode)
authorised, at various points in time, by commercial radio broadcasting licences by
reference to the time of allocation of the licence. Section 41D authorises incumbent
licensees to deliver digital services and/or to continue to provide their analog services
using their existing BSA licences.
New subsection 41D(1) provides that a commercial radio broadcasting licence in
force immediately before the commencement of the section, that was allocated as a
licence to provide an analog service (see new subsections 36A(1) or (2), Item 38 of
Schedule 1), is taken to authorise the licensee to provide an analog service during the
period beginning on the commencement of the section and ending immediately before
the `digital radio start-up day' for the licence area.
New subsection 41D(2) provides that a commercial radio broadcasting licence
allocated on or after the commencement of the section but before the `digital radio
start-up day' for the licence area, that was allocated as a licence to provide an analog
service, is taken to authorise the licensee to provide an analog service during the
period beginning on the commencement of the section and ending immediately before
the `digital radio start-up day' for the licence area.
New subsection 41D(3) authorises the delivery, under a licence described in
subsection (1) or (2), of one or more digital services on or after the `digital radio start-
up day' for the licence area. This section gives effect to the Government's intention to
allow incumbent licensees to deliver digital radio services using their existing BSA
licences, after the `digital radio start-up day'.
Authorisation for the delivery of digital services is aligned with the `digital radio
start-up day' for the licence area, to ensure that digital services do not commence
- 47 -
before the necessary planning and multiplex transmitter licence arrangements are in
place.
Proposed subsection 41D(3) also authorises the continued delivery by the licensees
described in subsections (1) and (2) of analog services, reflecting the Government's
intention that digital radio will be a supplementary technology rather than a
replacement technology.
New subsection 41D(4) provides that a commercial broadcasting licence allocated
after the `digital radio start-up day' for the area is taken to authorise the delivery of an
analog service if it is allocated as a licence to provide an analog service under new
paragraph 36A(3)(a). Such a licence cannot be used to provide a digital service.
New subsection 41D(5) provides that a commercial broadcasting licence allocated
after the `digital radio start-up day' for the area is taken to authorise the delivery of a
digital service if it is allocated as a licence to provide a digital service under new
paragraph 36A(3)(b). Such a licence cannot be used to provide an analog service.
The provisions in section 41D will be subject to sections 35D and will not apply to
commercial radio broadcasting licences allocated under section 40(1) of the BSA.
Item 40 `Special licence conditions relating to digital radio commercial
broadcasting services'
Item 40 inserts new section 43D into the BSA, which provides special licence
conditions relating to digital radio commercial broadcasting services.
The section provides a cap on the amount of multiplex capacity that can be used by a
commercial radio broadcasting licensee to simulcast in digital an analog commercial
radio broadcasting service. This is intended to ensure the development of new and
innovative digital-only programming, while not unreasonably constraining a
broadcaster's legitimate right to replicate a reasonable amount of their analog service
in digital.
The Bill provides for the implementation of digital radio based on European Digital
Audio Broadcasting standards. The Digital Audio Broadcasting (DAB) platform
requires a number of digital radio services to be jointly broadcast on the one wide-
channel through a shared transmission infrastructure (a `multiplex'). To enable
multiplexed radio broadcasting the Bill amends the Radcomms Act to provide for a
new category of transmitter licence called the `digital radio multiplex transmitter
licence'.
New subsections 43D(1) and (2) of the BSA require BSB commercial radio
broadcasting licences that authorise the delivery of one or more digital radio services
to be subject to the condition that the service or services must be transmitted using a
multiplex transmitter operated under a category 1 or category 2 digital radio multiplex
transmitter licence allocated under the Radcomms Act. This provision ensures that
digital radio services are provided only via licensed DAB multiplex transmitters.
New subsection 43D(3) provides that, where there is only one category 1 or only one
category 2 digital radio multiplex transmitter licence for the licence area, a
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commercial digital radio broadcaster will be subject to the condition that it can use no
more than one-ninth of the multiplex capacity under the digital radio multiplex
transmitter licence (i.e. the `standard access entitlement' as defined in
section118NQ(2) of the Radcomms Act) to provide content that passes the shared
content test in relation to an analog commercial radio broadcasting service provided
under its commercial radio broadcasting licence or another commercial radio
broadcasting licence that has the same licence area as the first licence.
New subsections 43D(4) and 43D(5) provide that, where there are two or more
digital radio multiplex transmitter licences (category 1 or 2) for the licence area,
commercial digital radio broadcasters will be subject to the condition that they can
use not more than the designated fraction of the total multiplex capacities under those
digital radio multiplex transmitter licence (i.e. this fraction is equivalent to one-ninth
of the capacity of any one digital radio multiplex in the licence area) to provide
content that passes the shared content test in relation to an analog commercial radio
broadcasting service provided under the first licence or under a commercial radio
broadcasting licence that has the same licence area as the first licence.
New subsection 43D(6) provides that content would pass the shared content test if at
least 50% of the content shown on the digital service was the same as at least 50% of
the content shown on an analog service with the same licence area. For the purposes
of this test, content would not include specified types of material including
advertising. That is, the advertising and other material can be replication on both a
digital and analog service without being considered as shared content.
Under the proposed new sections, there would be no requirement on a commercial
radio broadcaster to simulcast its analog service in digital, but it would be allowed to
use its standard access entitlements to provide a simulcast service, or a service that
includes more than 50% of the content from the broadcaster's analog service or
another analog service in the licence area.
However, where a commercial broadcasting licensee acquires more than one-ninth of
the multiplex capacity in any licence area, the commercial broadcasting licensee will
be prevented from simulcasting more than 50% of its analog service or another analog
service in the licence area on that additional capacity. This additional capacity above
the one-ninth standard access entitlement is to be used only for new services. The
conditions in subsections 43D(3) and 43D(4) of the BSA are intended to stimulate the
development of new and innovative programming.
Item 41 `Commercial radio broadcasting licences and restricted datacasting
licences'
Items 41 inserts new section 54B into the BSA which provides that, for the period of
the moratorium for a licence area, a person must not be in a position to control both a
commercial radio broadcasting licence and a restricted datacasting licence.
New section 54B will thereby provide for new entrants to make use of the digital
radio platform for new types of non-radio services called `restricted datacasting
services' (see Items 24, 25 and 110 of Schedule 1).
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Item 42 inserts new subsections 62(2A) and 62(2B), which impose a requirement on
restricted datacasting licensees to provide ACMA with details of the persons who
were in a position to exercise control of the restricted datacasting licence during the
previous financial year and the name of each person who was a director of the
restricted datacasting licensee in that year.
Item 43 makes a consequential amendment to paragraph 62(5)(a).
Item 44 inserts new subsection 63(2) which imposes a requirement on restricted
datacasting licensees to notify ACMA of any changes in the control of the licence,
within 5 days of becoming aware of the changes (see also Items 41 and 106 of
Schedule 1).
Item 45 makes a consequential amendment to paragraph 63(5)(a).
Item 46 inserts new subsection 64(2), requires the controller of a restricted
datacasting licence to notify ACMA within 5 days of becoming a controller of a
restricted datacasting licence (see also Items 28 and 50 B of Schedule 1).
Item 47 makes a consequential amendment to paragraph 64(5)(a).
Item 48 adds a provision to section 82 which clarifies that non-BSB community
broadcasting licences can only be allocated on the basis of one licence per service.
Item 49 makes a consequential amendment to section 84 of the BSA.
Item 50 `Designated community radio broadcasting licences to provide analog or
digital services'
Item 50 inserts new section 84A which relates to those community radio broadcasting
licences that are `designated community radio broadcasting licences' under new
section 8AA.
Existing section 84 provides for the allocation of community radio broadcasting
licences without reference to transmission mode. New section 84A relates to those
community radio broadcasting licences that are `designated community radio
broadcasting licences' under new section 8AA, and sets out the services authorised by
such licences, by reference to allocation date.
New subsection 84A(1) provides that `designated community radio broadcasting
licences' in force immediately before the commencement of the section are taken to
have been allocated as licences to provide an analog community radio broadcasting
service.
New subsection 84A(2) provides that a `designated community radio broadcasting
licences' allocated after the commencement of the section but before the `digital radio
start-up day' must be allocated as a licence to provide an analog community radio
broadcasting service.
New subsection 84A(3) provides that designated community radio broadcasting
licence allocated on or after the `digital radio start-up day' must be allocated as either
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a licence to provide an analog commercial radio broadcasting service or a licence to
provide a digital community radio broadcasting service.
New subsection 84A(4) provides that a licence allocated as a licence to provide an
analog service is subject to a licence condition that the licensee may only provide an
analog service. This subsection applies to licences in force before the commencement
of this section as well as licences allocated after the commencement of the section but
before the `digital radio start-up day'. It also applies to licences issued after the
`digital radio start-up day' to provide analog services.
New subsection 84A(5) provides that, at the start of the `digital radio start-up day' for
the licence area, the licence condition in 84A(4) ceases to apply to analog licences in
force immediately before the `digital radio start-up day' for a licence area.
New subsection 84A(6) provides that a designated community radio broadcasting
licence allocated as a licence to provide digital commercial radio broadcasting
services is subject to a licence condition that the licensee may only provide digital
radio broadcasting services under the licence.
Item 51 `Services authorised by designated community radio broadcasting
licences'
Item 51 inserts new section 85A into the BSA, which prescribes the services (by
reference to transmission mode) authorised, at various points in time, by designated
community radio broadcasting licences, by reference to the time of allocation of the
licence. Section 8AA provides a definition of `designated community radio
broadcasting licence'.
These provisions authorise certain incumbent community broadcasters to deliver
digital services using their existing BSA licences, if they elect to do so.
New subsection 85A(1) provides that a `designated community radio broadcasting
licence' in force immediately before the commencement of the section, that was
allocated as a licence to provide an analog service (see new subsections 84A(1) and
(2), Item 50 of Schedule 1 ), is taken to authorise the licensee to provide an analog
service during the period beginning on the commencement of the section and ending
immediately before the `digital radio start-up day' for the licence area.
New subsection 85A(2) provides that a licence allocated on or after the
commencement of the section but before the `digital radio start-up day', as a licence
to provide an analog commercial radio broadcasting service, it is taken to authorise
the licensee to provide an analog service.
New subsection 85A(3) provides that a `designated community radio broadcasting
licence' in force immediately before the `digital radio start-up day' for the licence
area is taken to authorise the delivery of both analog and/or digital services, after the
`digital radio start-up day' for the licence area.
Authorisation for the delivery of digital services is aligned with the `digital radio
start-up day' for the licence area, to ensure that the delivery of digital services does
- 51 -
not commence before the necessary planning and multiplex transmitter licence
arrangements are in place.
New subsection 85A(4) provides that a designated community broadcasting licence
allocated on or after the `digital radio start-up day' for the licence area, allocated as a
licence to provide an analog service, is taken to authorise the licensee to provide that
services.
New subsection 85A(5) provides that a designated community broadcasting licence
allocated on or after the `digital radio start-up day' for the licence area, allocated as a
licence to provide a digital service, is taken to authorised the licensee to provide one
or more digital community radio broadcasting service in the licence area.
Item 52 `Special licence conditions relating to digital community radio
broadcasting services'
Item 52 inserts new section 87B into the BSA.
New subsections 87B(1) and (2) provide that digital community radio broadcasting
licences that authorise the delivery of one or more digital radio services are subject to
the condition that the service or services must be transmitted using a multiplex
transmitter operated under a digital radio multiplex transmitter licence allocated under
the Radcomms Act.
Item 53 Application of Codes of Practice
Item 53 inserts new subsections 123(6) and 123(7) into the BSA.
New subsections 123(6) and 123(7) extend the application of codes of practice, made
under section 123 of the BSA, to each digital commercial radio broadcasting service
provided by a commercial radio broadcasting licensee and to each digital community
radio broadcasting service provided by a community radio broadcasting licensee.
This will ensure that the existing regulatory regime for program content codes of
practice and program standards is also applied to digital radio.
Items 54 and 55 make consequential amendments to subsection 130A(1).
Item 56 inserts the following new sections into the BSA, which relate to codes and
standards.
New section 130AA provides for technical standards for digital radio transmission.
ACMA will have power to determine, through legislative instrument, technical
standards relating to the transmission of digital radio services. Under new subsection
130AA(3), national broadcasters will be required to comply with these technical
standards. For other categories of broadcasters, compliance with standards will be
enforced through licence conditions (see Items 81, 89, 100, 101, and 110 of Schedule
1).
New section 130AB allows ACMA to determine, through legislative instrument,
technical standards relating to the operation of multiplex transmitters. These standards
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will be enforced through licence conditions (see new section 109B(1)(o), Item 166 of
Schedule 1).
Item 57 inserts new section 130BA, which allows ACMA to determine, by legislative
instrument, standards relating to domestic digital reception equipment for radio
services (see also Item 15 of Schedule 1). These standards will be enforced through
licence conditions (see Items 81, 89, 100, 101, and 110 of Schedule 1).
These technical standards setting powers could be used, for example, to require the
use of particular digital radio standards such as the recently revised Digital Audio
Broadcasting standard known as DAB+ .
Items 58, 61 to 63 amend subsection 130F(1) of the BSA to broaden the scope of
Industry activities for the purposes of Part 9B of the BSA to cover the activities of
providers of radio services (new subparagraph 130F(1)(ea)-(ef)), providers of
reception equipment capable of receiving radio services (new subparagraph
130F(1)(g)(va)-(vf)) and the operation of multiplex transmitters (new subsection
130F(1)(i). Part 9B provides for the making of industry codes and industry standards
in relation to Industry activities.
Items 59 and 60 make consequential amendments to paragraph 130F(1)(f), which are
necessary to incorporate the new `restricted datacasting licence' category.
Item 64 ` national broadcaster codes'
Section 130L of the BSA provides that matters dealt with in industry codes and
standards made under Part 9B of the BSA have no effect if they are dealt with in a
range of other codes. This provision is to make clear that the industry codes under
Part 9B are not intended to deal with what are largely programming matters dealt with
under these other codes. Item 64 adds to the list of codes in section 130L, codes of
practice notified to ACMA and made under section 8(1) of the Australian
Broadcasting Corporations Act 1983 or section 10(1) of the Special Broadcasting
Services Act 1991.
Item 65 provides that a determination made by ACMA under new section 35D is
reviewable by the Administrative Appeals Tribunal (see Item 37 of Schedule 1).
Items 66 to 67 make consequential amendments to section 212 of the BSA.
Items 68 and 69
Items 68 and 69 amend subsection 212(3) to provide that a re-transmission by a
`designated community radio broadcasting licensee' of the programs transmitted by
any of the licensee's community radio broadcasting services is not a re-transmission
for the purposes of the section 212 exemption.
Item 70
Item 70 inserts a new section 215A which requires that the Minister cause a review to
be conducted by 1 January 2011 into the relative merits of various terrestrial and
satellite technologies capable of transmitting digital radio and restricted datacasting
services in regional licence areas. The review is also to examine the developments in
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these technologies and the price and availability of transmission and reception
equipment associated with these technologies. This review will also consider whether
any changes should be made to legislation to facilitate the transmission of digital
radio broadcasting services and restricted datacasting service in regional licence areas
using those technologies.
The Minister will be required to table the reports of the review in the Parliament.
This review will inform Government decisions about the path for introduction of
digital radio services in regional Australia.
Item 70 also inserts a new section 215B which requires that the Minister cause a
review to be conducted by 1 January 2014 of the development of technologies capable
of transmitting digital radio and restricted datacasting, and the operation of the Act in
so far as it deals with the licensing and regulation of digital radio and restricted
datacasting services. This review is timed to coincide with a review of the provisions
of the Radcomms Act that relate to digital radio and datacasting. These reviews will
provide for an evaluation of a range of aspects of the policy framework for digital
radio as digital radio technologies develop and the platform becomes established. This
is appropriate given that digital radio is relatively untested in the Australian market.
The reviews will also enable an examination of appropriateness of the current
regulatory framework for the period after the moratorium ends.
The Minister will be required to table the report of the reviews in the Parliament.
Items 71 to 77 make consequential amendments to Schedule 1 of the BSA, which add
`restricted datacasting licences' to the licences which come with the purview of the
Schedule. The Schedule is intended to provide a means of finding out who is in a
position to exercise control the types of licences to which the Schedule applies.
Items 78 and 79 make consequential amendments to paragraph 2 of Schedule 2.
Item 80 `conditions for commercial television broadcasting licences'
Item 80 adds a new condition to the conditions for commercial television
broadcasting licences provided in clause 7 of Schedule 2. The new condition provides
that a commercial television broadcasting licence cannot be used to provide a
commercial television service in the part of the spectrum designated as being partly
for the purpose of digital radio broadcasting services and restricted datacasting
services under new section 31(1A). The use of this spectrum is considered necessary
for digital radio and restricted datacasting services but it will not be made available
for the broader suite of broadcasting or narrowcasting services.
Item 81 adds a new condition to the conditions for commercial television
broadcasting licences provided in clause 8 of Schedule 2. A licensee that provides a
digital commercial radio broadcasting service will be required to comply with any
applicable standards made under Part 9A and Part 9B of the BSA.
Item 82 amends paragraph 8(1)(f) of Schedule 2 of the BSA to provide that a licensee
holding a broadcasting services bands commercial radio broadcasting licences that
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authorises the delivery of an analog service will be required to keep a transmitter
licence under the Radcomms Act that authorises the provision of the analog service.
A licensee holding a broadcasting services bands commercial radio broadcasting
licences that authorises the delivery of a digital service will not be required to hold a
transmitter licence under the Radcomms Act because digital radio services will be
transmitted using multiplex transmitters.
Items 83 and 84 make consequential amendments to paragraphs 8(1)(g) and (h).
Item 85 adds a new condition to the conditions for commercial radio broadcasting
licences provided in clause 8 of Schedule 2. The new condition provides that a
commercial radio broadcasting licence cannot be used to provide a commercial radio
service in the part of the spectrum designated as being partly for the purpose of digital
radio broadcasting services and restricted datacasting services under new section
31(1A) unless the service is a digital commercial radio broadcasting service. The use
of spectrum designated under section 31(1A) is considered necessary for digital radio
and restricted datacasting services, but it will not be made available for analog
commercial radio broadcasting services.
Items 86, 87, 88 and 90, 91 make consequential amendments to paragraphs 8 and 9
of Schedule 2.
Item 89 adds a new condition to the conditions for community radio broadcasting
licences provided in clause 9 of Schedule 2. A licensee that provides a digital
community radio broadcasting service will be required to comply with any applicable
standards made under Part 9A of the BSA
Item 92 adds a new condition to the conditions for community radio broadcasting
licences provided in clause 9 of Schedule 2. The new condition provides that a
community radio broadcasting licence cannot be used to provide a community radio
service in the part of the spectrum designated as being partly for the purpose of digital
radio broadcasting services and restricted datacasting services under new section
31(1A) unless the service is a digital community radio broadcasting service. The use
of spectrum designated under section 31(1A) is considered necessary for digital radio
and restricted datacasting services, but it will not be made available for analog
community radio broadcasting services.
Items 93, 94, 96, 97 and 98 make consequential amendments to clause 9 of Schedule
2.
Item 95 inserts new subclause 9(2AA) into Schedule 2 of the BSA. The licence
condition under BSA Schedule 2, Paragraph (2)(e) which requires that the licensee
will not operate the service for a profit or as part of a profit-making enterprise does
not prevent a designated community radio broadcasting license from holding shares in
a digital community radio broadcasting representative company (community
broadcasting representative company).
This provision is necessary because it is intended that designated community radio
broadcasting licensees, through digital community radio broadcasting representative
companies, will be able to join the joint venture companies holding category 1 or
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category 2 multiplex transmitter licences. Although vetted by the ACCC through the
undertakings process, it is expected that multiplex transmitter licensees will have the
ability to generate a return commensurate with the investment and commercial risks
of their investment.
Item 99 adds a new condition to the conditions for subscription television
broadcasting licences provided in clause 10 of Schedule 2. The new condition
provides that a subscription television broadcasting licence cannot be used to provide
a subscription television service in the part of the spectrum designated as being partly
for the purpose of digital radio broadcasting services and restricted datacasting
services under new section 31(1A). The use of spectrum designated under section
31(1A) is considered necessary for digital radio and restricted datacasting services,
but it will not be made available for the broader suit of broadcasting, narrowcasting
and datacasting services.
Items 100 and 101 add new conditions to the conditions for services provided under
class licences provided in clause 11 of Schedule 2. A licensee that provides a digital
subscription radio broadcasting service, a digital subscription radio narrowcasting
service or an open narrowcasting radio service will be required to comply with any
applicable standards made under Part 9A and Part 9B of the BSA
Item 102 adds a new condition to the conditions for services provided under class
licences provided in clause 11 of Schedule 2. The new condition provides that
spectrum designated under new section 31(1A) cannot be used to provide
broadcasting services under class licences. The use of spectrum designated under
section 31(1A) is considered necessary for digital radio and restricted datacasting
services, but it will not be made available for the broader suit of broadcasting,
narrowcasting and datacasting services.
Items 103 and 104 amend Schedule 6 of the BSA, to provide for the regulation of
`restricted datacasting licences', and services provided using these licence.
Item 105 provides for the allocation of restricted datacasting licences.
The new licence category and service type are intended to enable new operators to
make use of the digital radio platform to deliver non-radio digital services.
(see Items 24, 25, 110 of Schedule 1).
Items 106 makes an amendment consequential upon the creation of the category of
restricted datacasting.
Item 107 requires ACMA to keep a register of restricted datacasting licences, which
will assist ACMA with the enforcement of the provisions relating to control of
restricted datacasting licences.
Item 109 provides that a datacasting licence that is not a `restricted datacasting
licence' cannot be used to provide a service in the part of the spectrum designated
under section 31(1A). The use of spectrum designated under section 31(1A) is
considered necessary for digital radio and restricted datacasting services, but it will
not be made available for the broader suit of broadcasting, narrowcasting and
datacasting services.
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Item 110
Item 110 inserts new section 24A into the BSA, which imposes licence conditions
relating to transmission mode and program content for `restricted datacasting
licences' (see Items 24 and 25 of Schedule 1).
Restricted datacasting licences will be required to operate in digital mode, will be
subject to the television and radio programming restrictions for datacasting licences,
and will be required to comply with any standards under s 130AA which deals with
technical standards for digital transmission. The Minister will also have capacity to
specify, by legislative instrument, any content that may not be provided by a restricted
datacasting licensee.
The new licence category and service type are intended to enable new service
providers to make use of the digital radio platform to deliver content other than
traditional radio content.
The word `form' is used in paragraph 24A(b) in the same sense in which it is used in
the definition of `datacasting service' in section 6 of the BSA.
In the absence of any legislative instrument specifying content that may not be
provided, restricted datacasting licence holders can provide the same types of services
as datacasting licence holders, including the following types of services:
· Information-only programs (including those which enable transactions)
· Educational programs
· Interactive computer game
· Text or still visual images
· Parliamentary broadcasts
· Email
· Internet content
· 10 minute extracts of a television program in the following genres (known as
category 1 programs). These extracts are not able to be combined with other
extracts to form a whole program which would fall into one of these genres:
Drama, Sport, Music, Infotainment/lifestyle, Documentary, Reality TV,
Children's entertainment, Light entertainment/variety, Compilation
programming, Quiz/games, Comedy, a combination of the above.
· 10 minute news, current affairs, financial/market/business information or
weather bulletins (or bulletins which combine these elements). These may be
repeated at 30 minute intervals but may not be run consecutively. Bulletins
may be presenter-based.
· Radio programs that are foreign language news or current affairs programs.
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Items 111 to 118
Item 111 to 118 inserts new offence provisions for breaches of the special conditions
imposed under clause 24A and related consequential amendments.
Items 119 to 171 amend the Radiocommunications Act 1992
Item 119 inserts a definition into section 5 of the Radcomms Act of `BSA licence
area', which is used for the purposes of the multiplex transmitter licensing regime (see
Item 75 of Schedule 1).
Items 120, 121 and 122 insert definitions into section 5 of the Radcomms Act of
`category 1 digital radio multiplex transmitter licence', `category 2 digital radio
multiplex transmitter licence' and `category 3 digital radio multiplex transmitter
licence', respectively. These definitions establish three categories of digital radio
multiplex transmitter licences which will apply for the purposes of the multiplex
transmitter licensing regime (see Item 161 of Schedule 1).
Item 123 amends the definition of `datacasting transmitter licence' in section 5 of the
Radcomms Act, to exclude a `digital radio multiplex transmitter licence' from the
meaning of `datacasting transmitter licence'. `Digital radio multiplex transmitters'
will be able to be used for transmitting `restricted datacasting services' and a range of
digital radio broadcasting services. Without the exception they could fall within the
meaning of `datacasting transmitter licence'. The exception is necessary because
`digital radio multiplex transmitters' will be allocated and regulated separately from
`datacasting transmitter licences'.
Item 124 inserts a definition of `designated BSA radio area' into section 5 of the
Radcomms Act, which is used for the purposes of the digital radio multiplex
transmitter licensing regime. `Designated BSA radio area' defines licence areas for
digital radio as being the licence area of a commercial radio broadcasting licence or
the licence area of a community radio broadcasting licence where the area is the same
as that for the commercial licence or is deemed to be the same as that for the
commercial licence under new section 8AD of the BSA (see Item 22 of Schedule 1).
Items 125 to 135 insert a series of definitions into section 5 of the Radcomms Act,
which are to apply for the purposes of the multiplex transmitter licensing regime.
Items 136 to 138 and 143 insert definitions of foundation digital radio multiplex
transmitter licences and non-foundation digital radio multiplex transmitter licences.
This is an important distinction for the purposes of the regulatory framework
introduced in this Bill. Foundation digital radio multiplex transmitter licences are
category 1 and 2 digital radio multiplex transmitter licences (see Item 155 of Schedule
1) that provide standard access entitlements for digital commercial, digital community
and digital national radio broadcasters (defined sections118NQ, 188NR, 118NS) in an
area, among other matters. Essentially, they are licences designed to accommodate
incumbent commercial and community broadcasters and, in some cases, the national
broadcasters.
Non-foundation digital radio multiplex transmitter licences are any additional
category 1 or category 2 multiplex transmitter licences issued in an area which do not
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provide for standard access entitlements. These licences are intended to accommodate
any future digital radio broadcasters, and may be issued in a particular area once
sufficient foundation licences are in force (see Item 161 of Schedule 1).
Items 139 and 140 `Incumbent digital commercial and incumbent digital
community radio broadcasting licensees'
Items 139 and 140 insert into section 5 of the Radcomms Act definitions for
incumbent digital commercial radio broadcasting licensee and incumbent digital
community radio broadcasting licensee by cross-reference to subsections 9(D)(1) and
9D(2) respectively.
It is necessary to provide a definition of incumbent commercial and incumbent
community radio broadcasting licensees, to create a distinction between these
broadcasters and other commercial and community radio broadcasting licensees,
because several of the statutory arrangements for digital radio differentiate between
licensees according to whether or not the licensee is an incumbent licensee.
For example, incumbent commercial and incumbent community radio broadcasting
licensees will be permitted to participate in the regulatory arrangements prior to the
commencement of digital radio services (for example, the opportunity to form a joint
venture company to apply for multiplex transmitter licences).
Incumbent licensees will also be entitled to receive multiplex capacity entitlements in
accordance with the Government's announced policy framework for digital radio,
under foundation category 1 digital radio multiplex transmitter licences and
foundation category 2 digital radio multiplex transmitter licences (see sections 118NQ
to 118NU).
Items 141, 143 to 145 insert a series of definitions into section 5 of the Radcomms
Act, which are to apply for the purposes of the multiplex transmitter licensing regime.
Item 142 excludes from the definition of NBS transmitter licence, a digital radio
multiplex transmitter licence. The distinction between a transmitter licence which is
used to transmit traditional broadcasting services and a multiplex transmitter used to
transmit digital radio will ensure the relevant regulatory provisions are correctly
applied.
Item 146 `Digital community radio broadcasting representative company'
Item 146 inserts new section 9C, which defines, and provides for the formation of, a
digital community radio broadcasting representative company.
The community broadcasters in a licence area will be required to establish a
representative company to enable their participation with the commercial radio
broadcasters in the joint venture company controlling the multiplex transmitter licence
(see Item 161 of Schedule 1).
A collective arrangement through the representative company is intended to provide
for the efficient administration of the licensing and access provisions of the Bill.
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Under new section 9C, a representative company will be subject to the following
requirements:
· the representative company must be a qualified company (paragraph
9C(1)(a)), with the promoters of the company required to invite each
incumbent digital community radio broadcasting licensee in the licence area to
subscribe for shares in the company (which must be issued equally)
(paragraph 9C(1)(c)). The Bill amends the licence conditions of community
broadcasters to allow them to hold shares in the community broadcasting
representative company and thus benefit from participation in the joint venture
company (see Item 95 of Schedule 1).
· invitations to subscribe for shares in the company must be published on
ACMA's website and the invitations must remain open for at least 90 days
from the commencement of Schedule 1 to the Bill (paragraph 9C(1)(d) and
subsections 9C(5) and (6)).
· there must be no discrimination between subscribers for shares in the company
in relation to the consideration payable, which in aggregate must not
substantially exceed the total that, as at the time the invitation to subscribe for
shares was published, would be required for the viable operation of the
company (paragraphs 9C(1)(e), (f)). It is intended that the consideration
payable for a share will comprise the proportionate amount of the capital
reasonably known at the time of inviting applications for shares for the
commercially viable operation of the company. This should in no way
constrain or otherwise affect the autonomy of the company to make decisions
regarding the means by which the company meets any future obligations or
raises additional capital. Further, the consideration payable for shares at issue
is separate from any fees charged by a joint venture company to content
service providers for access to multiplex capacity. No invitees are to be
subject to duress (paragraph 9C(1)(g)).
· the company must have a constitution which must provide that only digital
community radio broadcasting licensees for the relevant licence area hold
shares in the company. If a new digital community radio broadcasting licence
is issued after the commencement of Schedule 1 to the Bill, the company
constitution must provide that within 30 days of the allocation of that new
broadcasting licence, the company will offer to issue equivalent shares to the
new licensee (and keep that offer open for 90 days) with the amount payable
not substantially in excess of the amount payable by incumbent licensees
(paragraphs 9C(1)(h), (i), (j)).
· the company's constitution must provide that the purposes of the company are
to: hold shares in one or more joint venture companies that hold, have applied
for or propose to apply for category 1 or 2 multiplex transmitter licences;
exercise powers conferred by the Bill on the representative company; and any
activities incidental to those purposes (paragraph 9C 1(k)).
· the company constitution must also provide that the company must comply
with any conditions laid down in regulations (paragraph 9C(1)(l); and
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· the digital community broadcasting licensees for the area must give ACMA
written notice that they elect that this company be the nominated
representative company (paragraph 9C(1)(b). Subsection 9C(3)) provides that
this nomination is the only one made for the BSA radio area (This election is
irrevocable (subsection 9C(4).
Item 146 `Incumbent digital radio broadcasting licensees'
Item 146 also inserts new section 9D which adds a definition of `incumbent digital
radio broadcasting licensee' into the Radcomms Act, which is to apply for the
purposes of the multiplex transmitter licensing regime. Licensees holding a BSB
digital commercial or a designated community radio broadcasting license at the
commencement of the Act are incumbent licensees for the purposes of the Radcomms
Act (see Items 130 and 140).
Item 147 makes a consequential amendment to section 29.
Item 148 makes a consequential amendment to section 31(1)(a).
Item 149 `Spectrum designation'
Item 149 inserts new subsection 31(1A), which enables the Minister, in consultation
with ACMA, to designate parts of the spectrum as being partly for the purpose of
digital radio broadcasting services and restricted datacasting services, and to refer the
spectrum to ACMA for planning under Part 3 of the BSA. This designated spectrum
forms part of the broadcasting services bands, under section 6 of the BSA (see Item 3
of Schedule 1).
Spectrum constraints for digital radio mean that services are likely to need to be
transmitted using BSB spectrum as well as spectrum currently outside the BSB;
including, for example, `L-Band' (1.5 GHz). This spectrum will be partly for the
purposes of digital radio broadcasting and restricted datacasting services.
The Minister may, by written instrument, determine that a designation under
subsection 31(1A) ceases to be in force at a specified time (subsection (1C)), or only
has effect in relation to one or more specified areas of Australia (subsection (1D).
These subsections enable the Minister to set a time limit on a designation under
section 31(1A), which may allow for the temporary use of spectrum, for example,
pending decisions about spectrum use after switchover from analogue television.
Similarly, the capacity for the Minister to limit the effect of a designation to one or
more specified areas may have particularly application in relation L-Band, where
some channels are currently utilised more heavily in some areas than others.
The Bill safeguards the operation of existing licences authorised to use spectrum that
may be designated under new subsection 31(1A) as part of the BSBs for the purposes
of digital radio and restricted datacasting (see Item 92 of Schedule 1). This will ensure
that existing users of non-BSB spectrum are not unduly impacted by a designation for
digital radio. Spectrum designated under new subsection 31(1A) will also not be able
to be used for a broadcasting service other than digital radio (i.e. can not used for
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commercial television, analogue commercial radio, analogue community radio,
subscription television, datacasting, or class licensed services.)
Items 150 153 clarifies that instruments made under subsections 31(1), (1A), (1C),
(1D),(5) or (6), and a determination subsection 31(2), are not legislative instruments.
Item 154 `Digital radio channel plans'
Item 154 inserts new section 44A, which provides for the preparation of digital radio
channel plans. Under this section, digital radio will be planned and licensed on the
basis of BSA licence areas. A copy of a digital radio channel plan is to be made
available on ACMA's Internet site (subsection 44A(4)).
Before issuing the first digital radio multiplex transmitter licence for a designated
BSA radio area, ACMA must, by legislative instrument, prepare a digital radio
channel plan that:
· allots frequency channels in relation to the area for use by digital radio
multiplex transmitter licensees, where each channel has at least 1.536 MHz
bandwidth (paragraph 44A(1)(a));
· reserves a frequency channel of at least 1.536 MHz bandwidth for a category 3
multiplex transmitter licence for the area (paragraph 44A(1)(b)) (This
provision ensures spectrum is reserved for the national broadcasters in every
area of Australia, that is subject to digital radio planning.);
· determines the type, combination and number of category 1 and category 2
multiplex transmitter licences that are to be issued for the area (paragraph
44A(1)(c))( This provides ACMA with the discretion to determine the
multiplex transmitter licences that will be issued in an area.);
· determines the technical specifications for each multiplex transmitter in the
licence area (paragraph 44A(1)(e)). (It is intended that ACMA have the
flexibility to determine whether these technical specifications are general
technical parameters and constraints on the use of a frequency channel, or more
specific technical characteristics of individual transmitters).
New subsection 44A(2) requires a plan made under 44A(1) to be consistent with:
· the spectrum plan (paragraph 44A(2)(a));
· any relevant frequency band plans (paragraph 44A(2)(b));
· any relevant frequency allotment plans (paragraph 44A(2)(c));
· any relevant licence area plans (paragraph 44A(2)(d));
· any relevant digital channel plans made under the commercial television
conversion scheme (paragraph 44A(2)(e)); and
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· any relevant digital channel plans made under the national television
conversion scheme (paragraph 44A(2)(f)).
Before preparing a digital radio channel plan, ACMA must publish a draft of the plan
on its site, invite public submissions within a period of at least 30 days and consider
any submissions provided (subsection 44A(5)). A copy of the final plan must also be
made available on ACMA's Internet site (subsection 44A(4)).
ACMA may, by legislative instrument, vary a digital radio channel plan. Before doing
so, ACMA must publish a draft of the variation on its site, invite public submissions
within a period of at least 30 days and consider any submissions provided
(subsections 44A(6) and (7)).
In preparing or varying a digital radio channel plan, ACMA must have regard to,
among other matters, the digital radio broadcasting services that are authorised, or
will be authorised by commercial or community radio broadcasting licences for the
designated BSA radio area and digital radio broadcasting services that are, or will be,
provided by national broadcasters in that area (subsection 44A(8) and (9)).
ACMA must ensure, as far as practicable, that all the frequency channels allotted or
reserved by a digital radio channel plan for a particular designated BSA radio area are
in the same frequency band (subsection 44A(10). ACMA must also ensure, as far as
practicable, that a digital radio channel plan for a particular designated BSA radio
area does not discriminate between digital radio multiplex transmitter licensees in
relation to the technical specifications of multiplex transmitters. These provisions are
intended to ensure that, as far as possible, each multiplex operating in a particular area
can deliver similar service characteristics and performance.
Item 155 `Declarations regarding digital radio multiplex transmitter licence
types'
Item 155 inserts new section 98C into the Radcomms Act, which enables ACMA to
declare that a specified category 1 digital radio multiplex transmitter licence is a
foundation category 1 digital radio multiplex transmitter licence (see Item 68A of
Schedule 1).
Item 155 also inserts new section 98D into the Radcomms Act, which enables ACMA
to declare that a specified category 2 digital radio multiplex transmitter licence is a
foundation category 2 digital radio multiplex transmitter licence (see Item 138 of
Schedule 1).
These provisions enable an important and necessary distinction to be drawn between
foundation digital radio multiplex transmitter licences and non-foundation digital
radio multiplex transmitter licences:
· Foundation digital radio multiplex transmitter licences are category 1 and
category 2 licences that provide standard access entitlements for digital
commercial, digital community and digital national radio broadcasting
operators in an area (see Item 172, new sections 118NQ, 118NR, 118NS).
Essentially, they are licences designed to accommodate incumbent operators.
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· Non-foundation digital radio multiplex transmitter licences are any additional
category 1 or category 2 multiplex transmitter licences issued in an area which
do not provide for standard access entitlements (see Item 172, new section
118NU). These licences are intended to accommodate any future digital radio
broadcasters, and may be issued in a particular area once sufficient foundation
licences are in force (see Item 161 of Schedule 1).
Item 155 `Limit on declaration of foundation digital radio multiplex transmitter
licences'
Item 155 also inserts new section 98E, which provides that ACMA must not declare a
multiplex transmitter licence to be a foundation digital radio multiplex transmitter
licence if doing so would result in the total multiplex capacities under foundation
digital radio multiplex transmitter licences for the designated BSA radio area being
more than sufficient to fulfil the number of standard access entitlements that have
come into existence, or are likely to come into existence in that licence area.
This establishes a cap on the number of multiplex transmitter licences that provide
standard access entitlements for digital commercial, digital community and digital
national radio broadcasting operators in an area. Foundation digital radio multiplex
transmitter licences are subject to special provisions only appropriate for those
multiplexes accommodating standard access entitlements (such as allocation for
administrative fees and right of renewal). It is therefore appropriate that the number
of such licences should be limited.
The cap on the number of foundation digital radio multiplex transmitter licences is
such that, for example, if there were 7 standards access entitlements under subsection
section 118NQ(2) for commercial radio broadcasters in the area, one foundation
multiplex licence could be declared; if there were between 8 and 14 standards access
entitlements for commercial radio broadcasters, two foundation digital radio multiplex
transmitter licences could be declared (subsection 98E(2)).
ACMA may ignore the limitation imposed by subsection (1) in declaring a multiplex
transmitter licence to be a foundation digital radio multiplex transmitter licence where
ACMA proposes to cancel a foundation digital radio multiplex transmitter licence that
has been previously issued for that area (subsections 98E(3) and 98E(4)). This ensures
that there will be scope for the allocation of an additional foundation digital radio
multiplex transmitter licence accommodating the standard access entitlements of
broadcasters even where a multiplex licence is subject to cancellation.
Items 156 to 158 `Issuing apparatus licences in the BSBs'
Item 156 to 158 amend section 100 of the Radcomms Act. Subsection 100(2), which
limits the ability for ACMA to issue an apparatus licences authorising operation of a
transmitter within the BSBs, is amended to provide for the issue of digital radio
multiplex transmitter licences within the BSBs.
Item 159 makes a consequential amendment to subsection 102(1).
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Item 160 `Apparatus licence allocation process for digital commercial radio
licensees'
Item 160 inserts new subsections 102(2AA) to (2AD) into section 102 of the
Radcomms Act. Section 102 of the Radcomms Act requires ACMA to issue a
transmitter licence to a person holding a commercial or community broadcasting
licence. The new subsections create exceptions such that the section will not operate
to require the automatic issuing of a transmitter licence to holders of commercial
radio broadcasting licences, or community radio broadcasting licences, authorised to
provide digital radio services.
These licensees will be required to transmit digital services using a digital radio
multiplex transmitter licence. The digital radio multiplex transmitter licensing regime
is set in place through new provisions (see Item 161). These provisions do not alter
the operation of licensing arrangements for analog radio services.
Item 161 `Category 1 digital radio multiplex transmitter licences'
Item 161 inserts new section 102C, which prescribes the circumstances in which
ACMA can issue a category 1 digital radio multiplex transmitter licence.
ACMA must not issue a category 1 multiplex transmitter licence to a person unless
that person is a qualified company (new subsection 102C(1)).
The new section provides for a two stage allocation process for category 1 digital
radio multiplex transmitter licences for the commercial and community broadcasters:
· Stage one: under new subsection 102C(2), incumbent commercial and
community broadcasters must be provided with an opportunity to elect to
jointly hold (via a joint venture company formed by these broadcasters in
accordance with section 102C(5)) a foundation category 1 digital radio
multiplex transmitter licence, allocated for a fee (new subsection 102C(2)) that
must not amount to taxation (i.e. is administrative only) (new subsection
102C(8)); and
· Stage two: under new subsection 102C(3), ACMA will be able to allocate a
foundation category 1 digital radio multiplex transmitter licence under section
106 of the Radcomms Act if either no applications were made by `eligible
joint venture companies' (formed by incumbent broadcasters in accordance
with section 102C(5)) or applications were rejected (under section 100). The
allocation process under section 106 will be a price-based allocation system
(new subsection 102C(3)). Any rejection of application can be subject to
internal review by ACMA under section 285 of the Radcomms Act and
reviewable by the AAT under section 292.
Before issuing a licence under subsection 102C(3) (stage 2), ACMA must first, by
notice published on its Internet site at least 150 days before the issue of such a
licence, invite applications from eligible joint venture companies new paragraph
102C(3)(a).
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This provision is intended to provide incumbent commercial and community
broadcasters with an adequate period in which to form an eligible joint venture
company to apply for the foundation digital radio multiplex transmitter licence. It
aligns with the 120 day period for which a promoter of an eligible company formed to
apply for a category 1 digital radio multiplex transmitter licence is required to hold
open invitations to hold shares in that company.
An eligible joint venture company will be required to be formed to apply for and hold
a foundation category 1 digital radio multiplex transmitter licence (subsection
102C(2)). New subsection 102C(5) provides that a company is an `eligible joint
venture company' for the purposes of section 102C if:
· before registration, the promoters of the company initially invited each
incumbent commercial broadcaster, and the community broadcasting
representative company (if formed) (see Item 73A of Schedule 1) to subscribe
for shares in the company. Assuming the initial invitation were to be
accepted by each invitee, the incumbent commercial radio broadcasting
licensees who accepted the invitation would be issued with an equal number
of shares and which could in aggregate total seven-ninths of the shares; and
that the community digital radio broadcasting representative company would,
if it accepted the invitation, hold two-ninths of the shares in the joint venture
company (new subparagraphs 102C(5)(a)(iii), (v) and (vi). The only persons
entitled to subscribe for shares in the eligible joint venture company would be
the incumbent digital commercial radio broadcasting licensees and the digital
community radio broadcasting representative company (new subparagraph
102C(5)(a)(iv));
· where an initial share offering is not fully subscribed, provide that those
persons who had subscribed for shares in response to the initial offer may
subscribe for the remaining shares (new paragraph 102C(5)(b));
· the invitations to subscribe were published on ACMA's Internet site (at the
request of promoters of the company (new subsection 102C(6)) and were
open for at least 120 days from the commencement of Schedule 1 to the Bill
(new paragraph 102C(5)(c)), with no recipients subject to duress as to
whether to accept the invitation (new paragraph 102C(5)(f)).
· there was no discrimination between subscribers for shares in relation to the
consideration payable (new paragraph 102C(5)(d)) and, in aggregate, this
consideration is not substantially in excess of the amount, as at the time of
invitations, would be required for the commercially viable operation of the
company (new paragraph 102C(5)(e)). It is intended that the consideration
payable for a share will comprise the proportionate amount of the capital
reasonably known at the time of inviting applications for shares for the
commercially viable operation of the company. This should in no way
constrain or otherwise affect the autonomy of the company to make decisions
regarding the means by which the company meets any future obligations or
raises additional capital. Further, the consideration payable for shares at issue
is separate from any fees charged by a joint venture company to content
service providers for access to multiplex capacity.
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· The Bill amends the licence conditions of community broadcasters to allow
them to hold shares in the community broadcasting representative company
and thus benefit from participation in the joint venture company (see item 95
of Schedule 1).
A category 1 digital radio multiplex transmitter licence that is not a foundation
category 1 digital radio multiplex transmitter licence cannot be issued otherwise than
in accordance with a price-based allocation system determined under section 106
(subsection 102C(4)).
Item 161 `Category 2 digital radio multiplex transmitter licences'
Item 161 also inserts new section 102D, which prescribes the circumstances in which
ACMA can issue a category 2 digital radio multiplex transmitter licence.
ACMA must not issue a category 2 multiplex transmitter licence to a person unless
that person is a qualified company (new subsection 102D(1)).
The new section provides for a two stage allocation process for category 2 digital
radio multiplex transmitter licences:
· Stage one: under new subsection 102D(2), incumbent broadcasters will be
provided with an opportunity to elect to jointly hold (via a joint venture
company formed by incumbent commercial, community and national
broadcasters in accordance with section 102D(5)) a foundation category 2
digital radio multiplex transmitter licence, allocated for a fee (new subsection
102D(2)) that must not amount to taxation (i.e. is administrative only) (new
subsection 102D(9)); and
· Stage two: under new subsection 102D(3), ACMA will be able to allocate a
foundation category 2 digital radio multiplex transmitter licence under section
106 of the Radcomms Act if either no applications were made by `eligible
joint venture companies' (formed by broadcasters in accordance with section
102D(5)) or applications were made but rejected under section 100. The
allocation process under section 106 will be a price-based allocation system
(new subsection 102D(3)). Any rejection of application can be subject to
internal review by ACMA under section 285 of the Radcomms Act and
reviewable by the AAT under section 292.
With respect to licences issued under stage 2, ACMA must first, by notice published
on its Internet site at least 150 days before the issue of such a licence, invite
applications from eligible joint venture companies new paragraph 102D(3)(a).
This provision is intended to provide incumbent commercial and community and
national broadcasters with an adequate period in which to form an eligible joint
venture company and apply for the foundation digital radio multiplex transmitter
licence. It aligns with the 120 day period for which a promoter of an eligible company
formed to apply for a category 2 digital radio multiplex transmitter licence is required
to hold open invitations to hold shares in that company.
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Under new subsection 102D(2), an eligible joint venture company will be required to
be formed to apply for and hold a foundation category 2 digital radio multiplex
transmitter licence. New subsection 102D(5) provides that a company is an `eligible
joint venture company' for the purposes of section 102D if:
· before registration, the promoters of the company initially invited each
incumbent commercial broadcaster and the community broadcasting
representative company (if formed) (see Item 73A of Schedule 1) and each
national broadcaster to subscribe for shares in the company (new paragraph
102D(5)(a));
· the invitations to subscribe were published on ACMA's Internet site (at the
request of promoters of the company (new subsection 102D(6)) and were
open for at least 120 days from the commencement of Schedule 1 to the Bill
(new paragraph 102D(5)(b)), with no recipients subject to duress as to
whether to accept the invitation (new paragraph 102D(5)(e)).
· assuming the initial invitation were to be accepted by each invitee, the shares
in the company were offered on the basis that incumbent commercial radio
broadcasting licensees who accepted the invitation would be issued with an
equal number of shares which could in aggregate total five-ninths of the
shares; and that the community digital radio broadcasting representative
company would, if it accepted the invitation, hold two-ninths of the shares in
the joint venture company; and that each national broadcaster would be able
to hold one-ninth of the shares issued (new subparagraphs 102D(5)(a)(iv),
(vi), (vii) and (viii). The only persons entitled to subscribe for shares in the
eligible joint-venture company were the incumbent digital commercial radio
broadcasting licensees, the digital community radio broadcasting
representative company and the national broadcasters (new subparagraph
102D(5)(a)(v).
· where an initial share offering is not fully subscribed, provide that those
persons who had subscribed for shares in response to the initial offer may
subscribe for the remaining shares (new paragraph 102D(5)(b));
· there was no discrimination between subscribers for shares in relation to the
consideration payable (new paragraph 102D(5)(d)) and, in aggregate, this
consideration is not substantially in excess of the amount, as at the time of
invitations, would be required for the commercially viable operation of the
company (new paragraph 102D(5)(e)). It is intended that the consideration
payable for a share will comprise the proportionate amount of the capital
reasonably known at the time of inviting applications for shares for the
commercially viable operation of the company. This should in no way
constrain or otherwise affect the autonomy of the company to make decisions
regarding the means by which the company meets any future obligations or
raises additional capital. Further, the consideration payable for shares at issue
is separate from any fees charged by a joint venture company to content
service providers for access to multiplex capacity.
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The Bill amends the licence conditions of community broadcasters to allow them to
hold shares in the community broadcasting representative company and thus benefit
from participation in the joint venture company (see item 95 of Schedule 1). The Bill
provides that a national broadcaster may hold shares in a company that is the holder
of a category 2 licence, is an applicant for a licence, or proposes to apply for a licence
(new subsection 102D(8)).
A category 2 digital radio multiplex transmitter licence that is not a foundation
category 2 digital radio multiplex transmitter licence cannot be issued otherwise than
in accordance with a price-based allocation system determined under section 106
(subsection 102D(4)).
Item 161 `Category 3 digital radio multiplex transmitter licences'
Item 79 also inserts new section 102E, which prescribes the circumstances in which
ACMA can issue a category 3 digital radio multiplex transmitter licence.
ACMA must not issue a category 3 multiplex transmitter licence to a person unless
that person is a qualified company (new subsection 102E(1)) and either each national
broadcaster beneficially owns shares in the company (new paragraph 102E(1)(a)) or a
single national broadcaster beneficially owns shares in the company and the other
national broadcaster has consented to that ownership (new paragraph 102E(1)(b)).
Under new subsection 102E(2), unless there is already a category 3 digital radio
multiplex transmitter licence for the designated BSA radio area, ACMA is required to
issue a category 3 digital radio multiplex transmitter licence, provided that:
· a digital radio channel plan is in force in the designated BSA radio area; and
· a qualified company applies under section 99; and
· the requirements in paragraphs 102E(1)(a) or (b) are met.
The Bill provides that a national broadcaster may hold shares in a company that is the
holder of a category 3 licence, is an applicant for a licence, or proposes to apply for a
licence (new subsection 102E(3)).
Item 161 `Limit on issue of non-foundation digital radio multiplex transmitter
licences'
Item 161 also inserts new section 102F, which requires that before ACMA issues any
non-foundation digital radio multiplex transmitter licences it must first issue sufficient
foundation digital radio multiplex transmitter licences (i.e. one or more) to provide
sufficient multiplex transmitter capacity to meet the standards access entitlements of
incumbent commercial radio broadcasters under subsection section 118NQ(2).
Items 162 and 163 make consequential amendments to section 103 of the Radcomms
Act, which extend the operation of the section to digital radio multiplex transmitter
licences. New subsection 103(6) provides that a digital radio multiplex transmitter
licence remains in force for 15 years.
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Items 164 and 165 make consequential amendments to subsections 107(3) and
108(5) respectively.
Item 166 `General licence conditions for digital radio multiplex transmitter
licences'
Item 166 inserts new section 109B which sets in place general licence conditions
which are to apply to category 1, 2 and 3 digital radio multiplex transmitter licences.
A number of these conditions are in line with existing conditions applicable to other
apparatus licences. There are also a number of general licence conditions which are
specific to digital radio.
Section 109B multiplex transmitter licence conditions require:
· compliance by the licensee (and persons authorised by the licensee to operate
the multiplex) with the Radcomms Act (and licence conditions) (paragraphs
109B(1)(a) and (c);
· payment of charges and fees (paragraph 109B(1)(b));
· where a licence is for more than one multiplex transmitter, one must be used
as the main transmitter and the other(s) as repeater transmitters (paragraph
109B(1)(d)). This provision is necessary for the definition of multiplex
transmitter capacity in the access provisions;
· operation of the transmitter in accordance with the digital radio channel plan
(paragraph 109B(1)(e));
· for category 1 licences, the provision of only licensed digital commercial or
digital community radio broadcasting services for the BSA licence area
concerned or licensed restricted datacasting services (paragraph 109B(1)(f));
· for category 2 licences, the provision of only licensed digital commercial or
digital community radio broadcasting services for the BSA licence area
concerned, digital national radio broadcasting services, or licensed restricted
datacasting services (paragraph 109B(1)(g));
· for category 3 licences, the provision of digital national radio broadcasting
services or restricted datacasting services provided by national broadcasters
only (paragraph 109B(1)(h));
· for foundation category 1 and 2 digital radio multiplex transmitter licences, the
commencement of digital commercial, digital community or digital national
radio broadcasting services on the designated `digital radio start-up day' and
transmission of the services thereafter (paragraphs 109B(1)(i) and (j)). ACMA
is given a power to specify, by legislative instrument, circumstances in which
a digital radio multiplex transmitter licensee is taken to be transmitting a
service (subsections 109B(6) and (7)). It is feasible that there may be
circumstances where a licensee is legitimately unable to transmit a service, for
example, where interruptions to the provision of digital radio service in a
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licence area, were directly or indirectly caused by factors outside the
reasonable control of the licensee such as weather damage to transmission or
distribution equipment or where the content provider has not provided the
necessary content to fulfil the obligations. Proposed subsections 109B(6) and
(7) would provide flexibility to deal with such circumstances by enabling
ACMA to specify the circumstances in which a licensee is taken to be
transmitting the appropriate service.
· transmission only using a digital modulation technique (paragraph
109B(1)(k));
· restriction of business activities to the operation of a multiplex transmitter and
related activities (paragraph 109B(1)(l));
· compliance with technical specifications as specified in the digital radio
channel plan (paragraph 109B(1)(m));
· compliance with technical planning guidelines developed by ACMA
(paragraph 109B(1)(n));
· compliance with section 130AB technical standards and subsection 130V(1)
industry standards (paragraphs 109B(o) and (p));
· submission, if required, of an implementation plan to ACMA. ACMA is able
to determine, by legislative instrument, the requirements to be complied with
by implementation plans, and there is a Ministerial power to direct ACMA in
relation to implementation plan requirements (paragraphs 109B(1)(q) and (r)
and subsections 109B(2), (3) and (4));
· if the licence is a category 3 licence, such other conditions as are specified in
the regulations (paragraph 109B(1)(s). This would allow rules to be made, for
example, relating to the sharing of capacity on a category 3 multiplex
transmitter (given that there are no access obligations imposed on such
licences which determine capacity sharing arrangements).
· other conditions specified in the licence (paragraph 109B(1)(t)]. There is a
Ministerial power to direct ACMA in this regard (subsections 109B(9) and
(10)).
ACMA is also able to impose additional conditions and vary or revoke these under
paragraphs 111(1)(a), (b) and (c) of the Radcomms Act. The Bill gives the Minister
the power to direct ACMA in relation to these powers (new subsections 11(6) and (7)
of the Radcomms Act) (see Items168 and 169, of Schedule 1).
The powers under new paragraph 109B(1)(t) and new subsections 109B(9) and (10)
and existing paragraph 111(1)(a) and new subsections 111(6) and (7) could be used in
the future to impose rollout and coverage obligations on multiplex transmitter
licensees.
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Item 166 `Conditions of category 1 and category 2 digital radio multiplex
transmitter licences access'
Item 166 also inserts new section 109C, which sets out conditions of category 1 and
category 2 digital radio multiplex transmitter licences in relation to access
arrangements.
The Bill establishes an access regime to address competition issues arising from the
introduction of multiplex transmitter licences. Multiplex licensees have the potential
to act as gatekeepers in accessing digital radio multiplex facilities in any market, with
the power to set terms and conditions of access which may be unreasonable or
discriminatory. The access regime established through Division 4B is designed to
address this concern by providing for efficient, open and generally non-discriminatory
access to digital radio multiplexes (see Item 172 of Schedule 1, new Division 4B).
Division 4B applies to category 1 and category 2 multiplex transmitter licences and
new section 109C makes compliance with its requirements a licence condition for
these licensees.
Category 1 and 2 multiplex transmitter licensees are subject to the following licence
conditions related to access:
· the licensee, and each person authorised by the licensee, must comply with
obligations under Division 4B of Part 3.3 of Chapter 3 of the Radcomms Act
(which sets out the requirements for access undertakings, standards access,
excess-capacity and distributed-capacity access obligations, and the capacity
cap) (new paragraph 109C(1)(a));
· the licensee, and each person authorised by the licensee, must comply with an
access undertaking in force under Division 4B (development of these access
undertakings is also mandatory) (new paragraph 109C(1)(b));
· the licensee, and each person authorised by the licensee, must not provide
access otherwise than in accordance with the standard, excess-capacity and
distributed-capacity access obligations that are applicable in relation to that
licence (new paragraphs 109C(1)(c)); and
· where a foundation digital radio multiplex transmitter licensee receives net
proceeds from the allocation of excess-capacity access entitlements (under
new subsection 118NT(6)) and the foundation digital radio multiplex
transmitter licence was not allocated under a price-based system, those
proceeds must be set aside in a separate account and may only be used to
maintain that account, discharge a liability arising from the auction or to
promote the digital radio broadcasting platform in Australia (new subsection
109C(2)).
The provisions relating to the net proceeds from the allocation of excess-capacity
access entitlements ensure that foundation digital radio multiplex transmitter licensees
do not profit from the allocation of access capacity as a result of the issue of a licence
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for which they were not charged, other than by way of an administrative fee. They
also encourage promotion of digital radio.
Item 166 `conditions of foundation digital radio multiplex transmitter licences
ownership of shares in licensee
New s109D provides that, during the moratorium, a holder of a foundation digital
radio multiplex transmitter licence in a designated BSA radio area which was not
allocated by price-based system must take all reasonable steps to ensure that a person
does not hold share in the licensee unless the person is a digital radio commercial
broadcasting licensee for that area, or the digital radio community broadcasting
representative company for that area, the holder of a commercial radio broadcasting
licence allocated in accordance with subsection 35D(3) of the Broadcasting Services
Act 1992, or if it is a category 2 multiplex licence, a national broadcaster.
Item 167 makes a consequential amendment to section 110.
Item 168 and 169 amend section 111 of the Radcomms Act to enable ACMA to vary
or revoke a condition relating to a multiplex transmitter licence made under
109B(1)(t) (paragraph 111(1)(c)), and to enable the Minister to direct ACMA in
relation to these powers (new subsections 111(6) and (7) of the Radcomms Act).
Items 170 and 171 amend section 114 of the Radcomms Act, to require that, in the
case of digital radio multiplex transmitter licences, third party authorisations can only
be given to qualified companies.
Item 172 `Division 4B Access to digital radio multiplex transmitter licences'
Item 172 inserts new Division 4B into the BSA.
Division 4B sets out an access regime for digital radio multiplex transmitter licences,
requires compliance with access obligations in relation to multiplex capacity under
the licence, and provides that terms and conditions on which the multiplex transmitter
licensees is require to comply with access obligations are set out in access
undertakings.
New section118NA provides that this Division will deal with access to foundation
category 1 and foundation category 2 digital radio multiplex transmitter licences and
non-foundation category 1 and non-foundation category 2 digital radio multiplex
transmitter licences.
Depending on the licence type, the terms and conditions for access will relate to one,
or to a combination, of the following access types: `standard access', `excess-capacity
access' and/or `distributed capacity access'.
A `content service provider' is defined as a company who provides, or proposes to
provide, a `content service'. In turn, a `content service' is defined for a category 1
digital radio multiplex transmitter licence as a licensed digital commercial radio
broadcasting service, a licensed digital community radio broadcasting service, or a
licensed restricted datacasting service. For a category 2 digital radio multiplex
transmitter licence, a `content service' is defined as a licensed digital commercial
- 73 -
radio broadcasting service, a licensed digital community radio broadcasting service, a
licensed restricted data casting service or a national radio broadcasting service.
New section 118NB inserts into the Radcomms Act definitions that are used in
Division 4B, including definitions for the different types of multiplex capacity that
can be provided under the different types of multiplex transmitter licences (i.e.
`standard access' entitlements and obligations, `excess-capacity access' entitlements
and obligations and/or `distributed capacity access' entitlements and obligations ).
The term `multiplex capacity' is defined, in relation to a digital radio multiplex
transmitter licence, to mean the gross transmission capacity of a single digital radio
multiplex transmitter (and the gross transmission capacity of a single digital radio
multiplex transmitter and one or more repeater multiplex transmitters if the licence is
for a main multiplex transmitter and one or more repeater multiplex transmitters) that
is available for the transmission of content services, including the capacity to provide
error protection for those services.
The inclusion of error protection for content services affords content service providers
the flexibility to decide on the `ruggedness' or their service or services. Typically,
there is trade-off between the level of error protection applied to a service and the data
throughput available for audio quality or additional services. This definition of
multiplex capacity excludes the capacity used to describe the multiplex configuration,
information about the programs and services carried on the multiplex, and error
protection associated with this information.
New section118NC provides that national broadcasters are taken to be entitled to
provide digital national radio broadcasting services in each designated BSA radio
area.
Access undertakings
The Division contains provisions that describe the essential features of access
undertakings (section 118ND), the process and criteria for acceptance or rejection of
an access undertaking by the ACCC (sections 118NE, 118NF), the variation of an
access undertaking that is in force (section 118NH) and the rights to enforce access
undertakings in the Federal Court (sections 118NZ and 118P).
New section 118P will impose a requirement on category 1 and category 2 digital
radio multiplex transmitter licensees to submit an access undertaking to the ACCC
within three months after the issue of the licence.
The access undertaking is an undertaking that any holder of the licence or person
authorised to use the licence will comply with the access obligations provided for in
the undertaking in relation to `standard access', `excess-capacity access' and
`distributed capacity access' (section 118ND(1)). This access must be provided on
terms and conditions provided for by the access undertaking (section118ND(1)(e)-
(g)). The terms and conditions may include, for example, the price of access to
multiplex capacity.
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Subsection 118ND(2) provides that the undertaking must be in a form approved by
the ACCC. In this context, the word `form' refers to the format of the undertaking
document rather than the form of access.
The undertaking must be submitted within 3 months after the issue of the digital radio
multiplex transmitter licence and must be accompanied by an administrative fee (if a
fee is specified in the Procedural rules). The undertaking must be without limitations
or subject to limitations specified in the undertaking (subsections 118ND(1), (3) and
(4)).
New section 118NE will provide for the ACCC to request the applicant to provide
further information about the undertaking. The ACCC may refuse to consider the
undertaking until the information is provided. If provided for in procedural rules, the
ACCC may reject an undertaking if the information is not given within a time limit.
Subsection 118NE(6) provides that information obtained under this section will be
subject to the same confidentiality provisions that apply to information obtained by
the ACCC under Part XIB or XIC of the Trade Practices Act 1974. Subsection
118NE(6) will be repealed at the commencement of Schedule 2 to this Bill (see
Clause 2).
New section 118NE provides that the ACCC may accept or reject an undertaking.
This decision will be governed by any criteria made by the ACCC by legislative
instrument under new section118NJ. Before deciding to accept or reject an
undertaking, the ACCC must conduct a public consultation process. If the ACCC
rejects an undertaking, it will be able to specify alterations to the undertaking that, if
made by the licensee, would lead to the ACCC's acceptance of the undertaking
(section 118NF(4)) or, by written notice to the licensee, determine that an undertaking
in the terms specified in the determination is the access undertaking in relation to the
licence (section118NF(5)). Any decision to reject an undertaking under
section118NF(2) or to determine a new undertaking under section118NF(5) is subject
to review by the Australian Competition Tribunal (ACT) (see new section 118PE).
Before determining an undertaking under section 118NF(5) the ACCC must
undertake public consultation (subsection 118NF(6)). The ACCC must notify
licensees of its decisions (sections118(7) and (8)).
New section 118NG specifies the period that an undertaking remains in force. An
undertaking comes into force at the time of acceptance or determination of the
undertaking by the ACCC. It continues in force while the licence is in force, although
it is suspended for any period that the licence itself is suspended (new subsections
118NG(1) and (2)). An undertaking also continues in effect in the same way if the
licence is transferred to another person (subsection 118NG(3)). Where a licence is
renewed, the undertaking continues to apply to the renewed licence in the same way
that it applied to the original licence (subsection 118NG(4)). Variations can be made
in situations where licences are transferred or renewed.
New section 118NH provides that the licensee may elect to give the ACCC a
variation of an undertaking and must provide a variation if required to do so by the
ACCC. The section provides that the ACCC may accept or reject a variation of an
undertaking proposed by a licensee. The decision will be governed by any criteria
made by the ACCC by legislative instrument under new section118NJ. Before
deciding to accept or reject a variation, the ACCC must conduct a public consultation
- 75 -
process. If the ACCC decides to reject a variation, it will be able to specify
alterations to the variation that, if made by the licensee, would lead to the ACCC's
acceptance of the variation (see section 118NH(6)), or it may, by notice in writing
vary the access undertaking). Any decision to reject a variation under section
118NH(3) or to determine a new undertaking under section 118NH(6) is subject to
review by the Australian Competition Tribunal (ACT) (see new section 118PE).
Before determining a variation under section 118NH(7) the ACCC must undertake
public consultation (subsection 118NF(7)). The ACCC must notify licensees of its
decisions (sections 118NH(8) and (9)).
Subsections 118NH(10),(11) and (12) set out the circumstances in which a licensee
is required to give a variation. The ACCC can require a variation to be made to the
undertaking, but it may not require a licensee to provide a variation before 1 January
2015. This date is a year after the statutory review of access arrangements provided
for under section 313B. It would be appropriate to revisit access undertakings at this
time to ensure they reflect any changes arising from the review. At and after that
date, the ACCC can require a variation every 5 years where the ACCC is satisfied that
the undertaking would be rejected if it were given to the ACCC at that time. The
ACCC also has the power to vary an access undertaking where a requested variation
is not accepted, subject to a public consultation requirement. Such a decision is also
subject to public consultation requirements and review by the ACT.
The ability for the ACCC to require a variation has been included to address the
potential for an undertaking to become outdated and ineffective over the extended life
of the undertaking i.e.15 years on allocation, and longer if a foundation digital radio
multiplex transmitter licence is renewed (see Item 162). The limits as to when the
ACCC can require a variation are considered necessary because an open-ended power
would introduce an element of uncertainty in the regulation of multiplex operations.
New section 118NI provides for the ACCC to request the applicant to provide further
information about the proposed variation. If provided for in procedural rules, the
ACCC may reject an undertaking if the information is not given within a time limit.
The ACCC may refuse to consider the variation until the information is provided.
Subsection 118NI(6) provides that information obtained under this section will be
subject to the same confidentiality provisions that apply to information obtained by
the ACCC under Part XIB or XIC of the Trade Practices Act 1974. Subsection
118NI(6) will be repealed at the commencement of Schedule 2 to this Bill (see Clause
2).
New section 118NJ provides for the ACCC to determine, by legislative instrument,
criteria that it must apply in its decisions whether or not to accept an access
undertaking or a variation of an access undertaking.
New section 118NK requires the ACCC to keep a register of all access undertakings
that are in force. This includes any undertaking currently varied under section 118NI.
The register must be made available for inspection on the Internet.
Subdivision C Standard access obligations, excess-capacity access obligations
and distributed-capacity access obligations
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New subdivision C includes new sections 118NL to 118NU which contain
definitions used in Division 4B.
New section 118NL sets out the `standard access obligations'. A digital radio
multiplex transmitter licensee must give a content service provider that has a
`standard access entitlement' in relation to a fraction of multiplex capacity under a
digital radio multiplex transmitter licence, access to that multiplex capacity and to
services that facilitate the use of that capacity. The licensee is not required to comply
with the obligation unless or until an access undertaking is in force in relation to the
licence.
New section 118NM sets out the `excess-capacity access obligations'. A digital radio
multiplex transmitter licensee must give a content service provider that has an `excess
capacity entitlement' in relation to a fraction of multiplex capacity under a digital
radio multiplex transmitter licence, access to that multiplex capacity and to services
that facilitate the use of that capacity. The licensee is not required to comply with the
obligation unless or until an access undertaking is in force in relation to the licence.
New section 118NN sets out the `distributed-capacity access obligation'. A digital
radio multiplex transmitter licensee must give a content service provider that has an
`distributed-capacity access entitlement' in relation to a fraction of multiplex capacity
under a digital radio multiplex transmitter licence, access to that multiplex capacity
and to services that facilitate the use of that capacity. The licensee is not required to
comply with the obligation unless or until an access undertaking is in force in relation
to the licence.
New section 118N0 imposes on a digital radio multiplex transmitter licensee the
obligation to comply with any access obligations as set out in sections 118NL,
118NM and 118NN that are applicable to the digital radio multiplex transmitter
licence on such terms and conditions as are ascertained in accordance with an access
undertaking in force in relation to the licence.
New section 118NP imposes on digital radio multiplex transmitter licensees an
obligation not to discriminate between content service providers who have access to
multiplex capacity under the digital radio multiplex transmitter licence, in relation to
the technical and operational quality of services supplied, and the technical and
operational quality of fault detection, handling and rectification processes.
New section 118NQ `standard access entitlements of commercial broadcasters'
An incumbent digital commercial radio broadcasting licensee may claim, via written
notice given to a foundation digital radio multiplex transmitter license and within 30
days of the allocation of the foundation licence, access to one ninth of the multiplex
capacity under that licence (called a `standard access entitlement') (subsection
118NQ(2)). The incumbent digital commercial radio broadcasting licensee may only
use the `standard access entitlement' to provide one or more digital commercial radio
broadcasting services in the designated BSA radio area (paragraph 118NQ(2)(b)).
The right can only be claimed in relation to one multiplex in a licence area
(subsection 118NQ(5)). A digital commercial radio broadcasting licensee may only
use a standard access entitlement for the purpose of providing, under the digital
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commercial radio broadcasting licence, one or more digital commercial radio
broadcasting services in the designated BSA radio area (paragraph 118NQ(2)(d) and
subparagraph 118NQ(7)(d)(ii)).
Digital radio multiplex transmitter licensees must notify the ACCC within 7 days
when they receive a notice claiming an entitlement (subsection 118NQ(4)).
Subsection 118NQ(6) provides for the ACCC to determine that a subsection (2) notice
claiming access to a foundation digital radio multiplex is cancelled in relation to that
multiplex transmitter and has effect in relation to another foundation digital radio
multiplex transmitter, if the multiplex transmitter in relation to which the application
was made cannot accommodate the request for capacity, taking into account prior
claims for standard access entitlements and capacity reserved for designated
community broadcasters under section 118NR(2) and national broadcasters under
subsection118NS(2). This subsection will provide a means of resolving a situation
where the majority of commercial broadcasters in a market decide to exercise their
entitlements on the one multiplex and there is insufficient capacity to accommodate
them all.
Commercial broadcasters' rights to exercise their standard access entitlements in
relation to a particular multiplex are also limited by the entitlements of community
radio broadcasters and national broadcasters and the capacity cap (subsections
118NR, 118NS and 118NV).
An incumbent digital commercial radio broadcasting licensee cannot transfer its
standard access entitlement (paragraph 118NQ(2)(e)). If a licensee holds a standard
access entitlement and loses its digital commercial radio broadcasting licence under
subsection 35D(2) of the BSA, the standard access entitlement is transferred to
ACMA and then to the replacement licensee (where a new digital commercial radio
broadcasting licence is issued under BSA 35D(3)) (subsection 118NQ(7)).
In some licence areas commercial broadcasting licensees may hold more than one
commercial radio broadcasting licence for that area. There would be standard access
entitlements for each of those licences. For example, if Licensee X held two licences
(X1 and X2) and licensee Y held two licences (Y1 and Y2), there would be four
standard access entitlements in total, one for the licensee of X1, one of the licensee of
X2 (even though they may be the same person), one for the licensee of Y1 and one for
the licensee of Y2.
New section 118NR `Standard access entitlements of community broadcasters'
New subsection 118NR(2) provides that two-ninths of multiplex capacity under a
foundation digital radio multiplex transmitter licence is reserved for digital
community radio broadcasting licensees nominated in accordance with subsections
118NR(3), (7) or (10).
To access this reserved capacity, digital radio community broadcasting licensees will
need to be nominated by the community broadcasting representative company for the
licence area (see Item 146 of Schedule 1). The fraction of reserved multiplex capacity
which a licensee may use will vary in accordance with the approach adopted by the
representative company, which will be given effect by the type of notice given to the
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multiplex licensee by the company. A notice may be given under subsections
118NR(3), (7) or (10).
In a notice given under section 118NR(3), the representative company may determine
what fraction of multiplex capacity each nominated broadcaster is to use. The
fractions nominated cannot exceed the total of the capacity reserved for community
radio broadcasters (section118NR(4)). As a default option, where a notice does not
specify fractions for each nominated broadcaster, the Bill provides that the available
capacity is to be distributed evenly between the nominated licenses (subsections
118NR(7) and (8)). This provision is intended to apply if the representative company
is unable to come to an agreement on the multiplex capacity nominated for each
licensee. Where only one broadcaster is nominated, the Bill provides that the
broadcaster is entitled to half of the multiplex capacity reserved for community
broadcasters (that is, the single nominee would be entitled to access one-ninth of the
total multiplex capacity) (subsection 118NR(10)). These provisions require that a
nominated licensee may only use that standard access entitlement for the purpose of
providing, under the digital community radio broadcasting licence, one or more
digital community radio broadcasting services in the designated BSA radio area (
paragraphs 118NR(3)(d), (7)(d) and (10)(d)).
A representative company may give a multiplex licensee only one section 118NR
notice at a time (subsections 118NR(6), (9) and (13)) and it cannot vary that notice
(subsection118NR(17). However the company may give another notice if it is
accompanied by a notice revoking the first notice. The use of a notice under one
subsection does not prevent the company using a notice under a different subsection
on a later occasion (subsections 118NR(11), (12) and (14) to (16)).
To ensure that the entitlements remain available for community broadcasting services,
licensees will be prevented from transferring the standard access entitlement
(subparagraphs 118NR(3)(e), (7)(e) and (10)(e)).
New subsection 118NR(18) provides that a licensee can only be nominated once in its
designated BSA area.
New section 118NS `Standard access entitlements of national broadcasters'
The national broadcasters are each entitled to access one ninth of the multiplex
capacity of a foundation category 2 digital radio multiplex transmitter licence (a
standard access entitlement) (subsection 118NS(2)). A national broadcaster may
transfer this entitlement only to another national broadcaster (paragraph 118NS(2)(c)).
The standard access entitlement may only be used for the purpose of providing one or
more digital national radio broadcasting services in the designated BSA radio area
(paragraph 118NS(2)(b)).
New section 118NT relates to `excess capacity entitlements'
In each market, there is likely to be an amount of capacity on each foundation
multiplex that is in excess of the standard access entitlements. To ensure this excess
capacity is distributed in an equitable manner, the Bill establishes a process that must
be followed for the distribution of excess capacity.
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Subsection 118NT(1) provides that excess multiplex capacity in relation to a
foundation digital radio multiplex transmitter licence exists where the capacity
available under the digital radio multiplex transmitter licence exceeds the aggregate of
the standard access entitlements arising under subsection 118NQ(2) (commercial
broadcaster standard access entitlements) and subsection118NS(2) (national
broadcaster standard access entitlements in relation to category 2 multiplexes) and the
capacity reserved under subsection 118NR(2) for community broadcasters. The
assessment of demand for excess multiplex capacity and the establishment of excess
capacity entitlements is provided for on the digital start-up day for the area, or at any
time after the 12-month period beginning on the digital start-up day for the area. This
provides for an initial assessment of excess multiplex capacity and for subsequent
assessments after 12 months if necessary.
Under new subsection 118NT(2), if capacity available under the digital radio
multiplex transmitter licence on the digital start-up day for the area exceeds the
aggregate of the standard access entitlements under subsections 118NQ(2) and
118NS(2) and the capacity reserved under subsection 118NR(2), the foundation
digital radio multiplex transmitter licensee must ascertain the level of demand for
access to the excess multiplex capacity from content service providers who are
entitled to provide one or more digital content services in the BSA radio area, within
ninety days of the `digital radio start-up day' for the designated BSA area. The ninety
day timeframe includes a thirty day period in which the digital radio multiplex
transmitter licences must give notice of intent to assess demand and invite content
service providers to express interest in having access to that excess multiplex capacity
(paragraph 118 NT(2)(b)).
Subsection 118NT(3) provides that, if at any time after the 12-month period
beginning on the digital start-up day for the area, the multiplex capacity available
under the digital radio multiplex transmitter licence exceeds the aggregate of the
standard access entitlements under subsections 118NQ(2) and 118NR(2) and the
capacity reserved under subsection 118NS(2), the digital radio multiplex transmitter
licensee may ascertain the level of demand for access to the excess multiplex capacity
from content service providers who are entitled to provide one or more digital content
services in the BSA radio area. If the multiplex licensee proposes to assess demand
for this excess multiplex capacity, they must give at least 30 days notice and invite
expressions of interest (paragraph 118NT(3)(b)).
Subsection 118NT(4) provides that if the demand for access to the excess capacity, as
ascertained under subsections either subsections 118NT(2) or (3), falls short of the
actual excess multiplex capacity, each interested content service provider is entitled to
access to the fraction of multiplex capacity sought by the interested content service
provider. This entitlement is called an `excess-capacity access entitlement'. Such
entitlements can be transferred but may only be used for provision of content services
by providers entitled to provide content services to the designated BSA radio area.
Subsection 118NT(5) provides that access to the `excess-capacity access entitlement'
commences thirty days after the demand for excess capacity was ascertained or at an
earlier time if agreed to by the digital radio multiplex transmitter licensee.
Subsection 118NT(6) provides that, if the demand for access to the excess multiplex
capacity, as ascertained under subsections either subsection118NT(2) or (3), is greater
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than the excess multiplex capacity, an auction process must be used to determine
which content service providers are to have access to which fractions of multiplex
capacity. This process must be completed within sixty days from the day on which the
demand from interested content service providers is ascertained (paragraph
118NT(6)(b)).
Subsection 118NT(7) provides that a content service provider is entitled to access to
that fraction of the multiplex capacity as is allocated to it under the auction process in
subsection118NT(6) (which entitlement is called an `excess-capacity access
entitlement'). Such entitlements can be transferred but may only be used for provision
of content services by providers entitled to provide content services to the designated
BSA radio area.
Subsection 118NT(8) provides that the `excess-capacity access entitlement' referred
to in subsection (7) commences thirty days after the auction process referred to in
subsection (6) is completed, or an earlier time if agree to by the multiplex licensee.
The subsection (6) auction process is completed when the content service provider
makes the relevant auction payment (subsection 118NT(9)).
An excess-capacity access entitlement may be transferred (paragraphs 118NT(4)(c)
and (7)(c)) and in the circumstances prescribed in subsection 118NT(10), further
transferred or successively transferred (subsection 118NT(10)).
The total fraction of multiplex capacity that can be obtained by digital commercial
radio broadcasting licensees as standard access entitlements, excess capacity access
entitlements and distributed-capacity access entitlements is limited by section 118NV.
If the digital radio multiplex transmitter licensee receives the net proceeds from an
auction of excess capacity under subsection 118NT(6), and the licence is a foundation
digital radio multiplex transmitter licence that was not allocated under a price-based
system, those proceeds must be set aside in a separate account and may only be used
to maintain that account, discharge liabilities arising from the auction or to promote
the digital radio broadcasting platform in Australia (new subsection 109C(2), Item
166 of Schedule 1).
New section 118NU relates to `distributed capacity access entitlements'
This new section establishes a process for the distribution of multiplex capacity on
non-foundation digital radio multiplex transmitter licences. The provision parallels
section 118NU. However, these licences will not be subject to standard access
entitlements, therefore, the provisions deal with multiplex capacity in general terms,
rather than in terms of that capacity that is in excess of standard access entitlements.
New subsection 118NU(2) requires that before commencing to transmit a content
service, the digital radio multiplex licensee must ascertain the level of demand, giving
at least thirty days notice of the digital radio multiplex transmitter licensee's intention
ascertain demand and inviting expressions of interest. The digital radio multiplex
transmitter licensee may repeat this process at any time after this initial assessment
(subsection118NU(3)).
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Subsection 118NU(4) provides that if the demand for access to the multiplex capacity
falls short of the actual multiplex capacity, each interested content service provider is
entitled to access to the fraction of multiplex capacity sought by the interested content
service provider. This entitlement is called a `distributed-capacity access
entitlement'. Such entitlements can be transferred but may only be used for provision
of content services by providers entitled to provide content services to the designated
BSA radio area.
Subsection 118NU(5) provides that access to the `distributed-capacity access
entitlement' commences thirty days after the demand for multiplex capacity was
ascertained or at an earlier time if agreed to by the digital radio multiplex transmitter
licensee.
Subsection 118NU(6) provides that, if the demand for access to the multiplex
capacity is greater than the multiplex capacity, an auction process must be used to
determine which content service providers are to have access to which fractions of
multiplex capacity. This process must be completed within sixty days from the day on
which the demand from interested content service providers is ascertained (paragraph
118NU(6)(b)).
Subsection 118NU(7) provides that a content service provider is entitled to access to
that fraction of the multiplex capacity as is allocated to it under the auction process in
subsection 118NU(6) (which entitlement is called a `distributed-capacity access
entitlement'). Such entitlements can be transferred but may only be used for provision
of content services by providers entitled to provide content services to the designated
BSA radio area.
Subsection 118NU(8) provides that the `distributed-capacity access entitlement'
referred to in subsection (7) commences thirty days after the auction process referred
to in subsection (6) is completed, or an earlier time if agree to by the multiplex
licensee. The subsection (6) auction process is completed when the content service
provider makes the relevant auction payment (subsection 118NU(9)).
A distributed-capacity access entitlement may be transferred (paragraphs118NU(4)(c)
and (7)(c)) and in the circumstances prescribed in subsection 118NU(10), further
transferred or successively transferred (subsection 118NU(10)).
The total fraction of multiplex capacity that can be obtained by digital commercial
radio broadcasting licensees as distributed-capacity access entitlements, standard
access entitlements and excess capacity access entitlements is limited by section
118NV.
New Section 118NV `Capacity cap--digital commercial radio broadcasting
licensees'
The arrangements for the distribution of multiplex capacity to digital commercial
radio broadcasting licences provided for in sections 118NQ, 118NT and 118NU are
subject to the capacity cap set out in this section.
Subsection 118NV(1) provides that where there is only one digital radio multiplex
transmitter licence for a designated BSA radio area, a digital commercial radio
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broadcasting licensee cannot access more than two-ninths of multiplex capacity under
the digital radio multiplex transmitter licence.
Subsection 118NV(2) provides that where there are two or more digital radio
multiplex transmitter licences for a designated BSA radio area, a digital commercial
radio broadcasting licensee cannot access more than the designated fraction of the
total multiplex capacities under those digital radio multiplex transmitter licences.
Subsection 118NV(3) defines `designated fraction' for the purposes of section
118NV. This fraction of the total multiplex capacities of the digital radio multiplex
transmitter licences is equivalent to two-ninths of the capacity of any one digital radio
multiplex in the licence area. This means that any one digital commercial radio
broadcasting licensee is not entitled to access more that a total of two-ninths of
multiplex capacity (or approximately 256kbps capacity) in any designated BSA radio
area regardless of how many digital radio multiplex transmitter licences are issued for
that area.
New section 118NW `Suspension of access entitlements'
This section provides that standard access entitlements, excess-capacity access
entitlements and distributed-capacity access entitlements will be suspended if the
digital radio multiplex transmitter licence to which each relates is suspended.
New section 118NX `Transfer of digital radio multiplex transmitter licence'
Category 1 and 2 digital radio multiplex transmitter licences can only be transferred to
a person who is a qualified company and where an access undertaking is in force
under Division 4B of the Radcomms Act. A category 3 digital radio multiplex
transmitter licence can only be transferred to a person who is a qualified company and
where the shares in that company are beneficially owned by a national broadcaster or
broadcasters. A digital radio multiplex transmitter licence that was not issued under a
price-based allocation cannot be transferred during the moratorium period (Item 175
of Schedule 1).
New section 118NX provides that the transfer of a digital radio multiplex transmitter
licence does not affect the continuity of a standard access entitlement, excess capacity
entitlement or distributed-capacity access entitlement applicable in relation to the
licence. Nor does the transfer of a digital radio multiplex transmitter licence prevent
the transfer of an access entitlement.
New section 118NY `Renewal of digital radio multiplex transmitter licence'
New section 118NY provides that the renewal of a digital radio multiplex transmitter
licence does not affect the continuity of a standard access entitlement, excess capacity
entitlement or distributed-capacity access entitlement applicable in relation to the
licence. Nor does the renewal of a digital radio multiplex transmitter licence prevent
the transfer of an access entitlement.
New section 118NZ `Judicial enforcement of access obligations etc.'
Under this new provision, if the ACCC or a person whose interests are affected
believes that a multiplex transmitter operator has contravened any standard, excess-
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capacity or distributed-capacity access obligations or other obligations under new
section 118NP that are applicable to the digital radio multiplex transmitter licence,
they can apply to the Federal Court for an order (new section 118NZ).
If the Federal Court is satisfied that a person has contravened an obligation, the court
may make:
· an order directing the person to comply with the obligation (paragraph
118NZ(1)(g);
· an order directing the person to compensate any other party who has suffered
loss of damage as a result of the contravention (paragraph 118NZ(1)(h)); or
· any other order that the Court thinks is appropriate (paragraph 118NZ(1)(i)).
New section 118P `Enforcement of access undertakings'
If an undertaking is in force in relation to a digital radio multiplex transmitter licence,
the ACCC, or a person whose interests are affected by an undertaking, believes that a
third party has breached the access undertaking, they may apply to the Federal Court
for an order.
If the Federal Court is satisfied that a person has breached the undertaking, the court
may make:
· an order directing the person to comply with the undertaking;
· an order directing the person to compensate any other party who has suffered
loss of damage as a result of the breach; or
· any other order that the Court thinks is appropriate.
New sections 118PA, 118PB, 118PC and 118PD ` External audits'
Where an undertaking is in force, and the ACCC has reasonable grounds to suspect
that the digital radio multiplex transmitter licensee has breached, is breaching, or
proposes to breach an undertaking or obligation, the ACCC may, by notice, require a
person to initiate an external audit of their compliance with:
· the undertaking;
· the standard, excess-capacity or distributed-capacity access obligations that
apply to the licence; or
· the obligations not to discriminate between content service providers as to the
quality of services supplied.
The external auditor's report is to be given to the ACCC.
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The external auditor may not be an officer, employee or agent of the multiplex
licensee, or a person or company in a position to exercise control of the digital radio
multiplex transmitter licence (subsection 118PB).
In carrying out an audit, an auditor may have regard to the results of a previous audit
conducted within the preceding two years (section118PC)
The ACCC may authorise a specified individual to be an external auditor (section
118PD).
Subdivision F `Review of ACCC decisions relating to undertakings'
A person whose interests are affected by a decision to accept or reject an undertaking
or a variation of an undertaking may apply to the Australian Competition Tribunal
(ACT) for a review of the decision (section 118PE).
In the case of an access undertaking, the ACT may:
· affirm the ACCC's decision (paragraph 118PF(1)(a));
· in the case of an ACCC decision to accept an undertaking, set aside the
ACCC's decision (paragraph 118PF(1)(b));
· in the case of an ACCC decision to reject an undertaking, set aside the
ACCC's decision and accept the undertaking (paragraph 118PF(1)(c)); or
· in the case of an ACCC decision to reject an undertaking and determine an
undertaking in its stead, set aside the decision, or set aside the decision and
make a new determination (paragraphs 118PF(1)(d) and (e)).
In the case of a variation to an undertaking, the ACT may:
· in the case of an ACCC decision to accept a variation, set aside the ACCC's
decision (paragraph 118PF(1)(f)); or
· in the case of an ACCC decision to reject a variation, set aside the ACCC's
decision and accept the variation (paragraph 118PF(1)(g)); or
· in the case of an ACCC decision to determine a variation to an undertaking,
set aside the decision, or set aside the decision and make a new determination
(paragraph 118PF(1)(h) and (i)).
In a review process, the ACT may require the ACCC to give relevant information and
other assistance to the ACT (subsection 118PF(3)). The ACT may only have regard
to certain information (subsection 118PF(4)).
If, within 6 months of receiving an application for review, the ACT has not made a
decision, the ACT is taken to have set aside the ACCC's decisions, and where the
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ACCC's decision was to reject the undertaking of variation, the ACT is taken to have
accepted the undertaking or variation (subsection 118PF(5)).
However, the ACT may, by notice to the applicant, extend the 6 month review period
for a further 3 months. The notice must be accompanied by a statement explaining the
reasons why the ACT has been unable to make a decision within the 6 months
(subsection 118PF(6)).
Subdivision G `Injunctions'
The ACCC will be able to apply to the Federal Court for an injunction where a digital
radio multiplex transmitter licensee is engaging, or proposing to engage in any
conduct in contravention of the access regime or otherwise will not comply with the
regime under Division 4B. The Federal Court may grant injunctions restraining a
person from engaging in conduct, or if it considers it desirable to do so, requiring
certain actions (new section 118PI).
The Federal Court will also be able to grant interim injunctions and may vary or
discharge an injunction (sections 118PJ and 118PK).
New section118PL clarifies circumstances in which the Federal Court may issue
restraining or performance injunctions in relation to this Division.
Subdivision H Miscellaneous
New section 118PN Annual reports
The digital radio multiplex transmitter licensee is required, within 60 days of the end
of the financial year, to give the ACCC a report about matters as specified in the
procedural rules and which relate to compliance with the:
· access undertaking;
· standard, excess-capacity and distributed-capacity access obligations; or
· obligations not to discriminate between content service providers as to the
quality of services supplied
during that financial year (section 118PN).
New section 118PQ Procedural Rules
The Bill provides the ACCC with the capacity to make rules, by legislative
instrument, in relation to the practice and procedure to be followed by the by the
Commission in performing its functions or exercising powers under the access regime
(section 118PQ).
These rules may relate to: the confidentiality of information given to the ACCC; the
form and content of access undertakings, variations or other documents; the giving of
information by the ACCC to ACMA; or the giving of information by ACMA to the
ACCC (subsection 118PQ(3)). The rules may also make provision for ACCC to
make decisions of an administrative character (118PQ(4)).
These rules may also provide for the ACCC to refuse to consider an undertaking if the
Commission is satisfied that it is frivolous, vexatious or was not given in good faith,
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or was given for the purpose of frustrating or undermining the effective administration
of this Division (subsection 118PQ(5)).
New section 118PP Constitutional safety net
This provision is a constitutional safeguard which ensures that if the access regime
results in the acquisition of property other than on just terms the Commonwealth is
liable for compensation. This can be pursued through the Federal Court where the
Commonwealth and affected parties cannot agree.
Division 4C Access to broadcasting transmission towers etc. by digital radio
multiplex transmitter licensees and authorised persons
Division 4C introduces an access regime for access to infrastructure modelled on the
transmitter access regime in Part 5 of Schedule 4 to the BSA.
The owner or operator of broadcasting transmitter infrastructure including towers
(section118QD), designated associated facilities (section118QE) and the site of the
tower (section118QF) must provide digital radio multiplex transmitter licensees or
persons authorised by the licensee under section 114 with access to that infrastructure.
(A designated associated facility is an antenna, combiner, feeder system or facility
specified in the regulations which is associated with a transmitter and where the
facility is able to be used to transmit a digital commercial, community or national
radio broadcasting service or a restricted datacasting service (section 118QB).
This access is to be granted to:
· allow the access seeker to install or maintain a multiplex transmitter or
associated facilities; or
· to use designated associated facilities or services provided by them.
The access seeker must give reasonable notice and the access transmitter or facilitates
are to be used in connection with transmission of designated content services
(subsections 118QD(2), 118QE(2) and 118QF(2)). Access is not required to give
access if this is not technically feasible and ACMA may have regard to specified
factors in determining whether access is technically feasible (subsections118QD(3) to
(5), 118QE(3) to (5) and 118QF(3) to(5)). Regulations can be made in relation to
access to designated associated facilities (subsections 118QE(7) and (8)).
Access to transmission tower sites is conditional on the owner of the tower having
rights to use the site (paragraph 118QF(1)(d)).
Terms and conditions of access are to be agreed between the owner/operator of the
infrastructure and the access seeker. Where agreement cannot be reached, terms and
conditions should be determined by an arbitrator appointed by the parties. The ACCC
will arbitrate where parties cannot jointly agree to an arbitrator. Owners and
operators of towers and facilities must abide by these terms and conditions.
Regulations may be made in relation to the conduct of arbitration (section 118QG).
The ACCC may, by legislative instrument, make a binding code setting out conditions
relating to the provision of access to infrastructure. This must be done in consultation
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with digital radio multiplex transmitter licensees, owners and operators of
broadcasting towers and owners and operators of designated associated facilities.
Access seekers and owners and operators of towers and facilities must comply with
the code (section118QH).
New section 118QI is a constitutional safeguard provision which provides that a
provision in Division 4C that authorises the conduct of an arbitration has no effect to
the extent that it would be invalid because of paragraph 51(xxxi) of the Constitution.
New section 118QJ excludes an access seeker who is seeking access to a
broadcasting transmission tower or a site from the operation of Part 3 of the National
Transmission Network Sale Act 1998.
Item 173 makes a consequential amendment to section 129(1), which extends the
application of that section to non-foundation digital radio multiplex transmitter
licences. This means that non-foundation digital radio multiplex transmitter licensees
are not able to apply for licence renewal and their duration is limited to 15 years.
Item 174 makes a consequential amendment to subsection 131(1).
Item 175 inserts new subsections into 131AA which set out the circumstances in
which digital radio multiplex transmitter licences can be transferred. Category 1 and 2
digital radio multiplex transmitter licences can only be transferred to a person who is
a qualified company and where an access undertaking is in force under Division 4B of
the RCA. A category 3 digital radio multiplex transmitter licence can only be
transferred to a person who is a qualified company and where each national
broadcaster beneficially owns shares in the company, or where one national
broadcaster beneficially owns shares in the company and the other national
broadcaster has consented. A foundation digital radio multiplex transmitter licence
issued otherwise than in accordance with a price-based allocation system determined
under section 106 must not be transferred to a person unless the digital radio
moratorium period for the designated BSA radio area concerned has ended (new
subsections 131AA(5)-(8)).
Item 176 makes a consequential amendment to paragraph 285(f) of the Radcomms
Act, to provide that licence conditions made by ACMA under paragraph 109B(t) are
administrative decisions subject to internal review and to review by the AAT.
Item 177 inserts section 313B. This section and new section 215B of the BSA
provide for review by the Minister of the digital radio regulatory regime.
Under new section 313B, the Minister is required to cause to be conducted, before 1
January 2014, a review of the matters relating to the digital radio framework,
including:
· the use of spectrum for the transmission of digital radio broadcasting services
and restricted datacasting services (paragraph 313B(1)(a));
· the availability of additional frequency channels for the transmission of digital
radio and restricted datacasting services (paragraph 313B(1)(b));
- 88 -
· the operation of the Radcomms Act in relation to digital radio (paragraph
313B(1)(c));
· the operation of the access regimes in Division 4A and 4B of the Radcomms
Act, and whether either of these division should be repealed (paragraph
313B(1)(e)).
The Minister must cause a report of the review to be tabled in each House of
Parliament within 15 sitting days after the completion of the report (subsections
313B(2) and (3)).
Items 178 182 amend section 155 of the Trade Practices Act 1974 (TPA)
Section 155 of the TPA relates to the ACCC's powers to obtain information,
documents and evidence. Item 86 amends subsection 155(1) to extend the operation
of section 155 to enable the ACCC to obtain information relating to a contravention of
Division 4A or 4B of the Radcomms Act.
Item 87 amends subsection 155(1), replacing `telecommunications' with
`communications', to enable the ACCC to obtain information relevant to a
`designated communications matter'.
Item 87A amends paragraph 155(7)(b). Subsection 155(7) overrides the privilege
against self incrimination in relation to the furnishing of documents by a person to the
ACCC under section 155(1). Therefore, a person will not be able to rely on the
privilege against self incrimination if requested to provide to the ACCC documents
relating to a contravention of Division 4A and 4B or information relevant to a
`designated communications matter'. Subsection 155(7) prescribes circumstances in
which the information provided to the ACCC under section 155 is not admissible in
evidence against the person providing the information. New paragraph 155(7)(b)
extends these circumstances, in the case of a body corporate, to include proceedings
under section 113 of the Radcomms Act that relate to a condition set out in paragraph
109A(1)(ij) or 109C(1)(a),(b) or (c) of that Act.
Item 88 amends subsection 155(9), to replace `designated telecommunications matter'
with `designated communications matter'.
Item 89 inserts new paragraph 155(9)(d) into the definition of `designated
communications matter' in subsection 155(9). The new paragraph provides that
Division 4A and Division 4B of the Radcomms Act are `designated communications
matters' for the purposes of section 155.
Part 2 Transitional provisions
Item 183 Frequency allotment plan prepared under section 25 of the
Broadcasting Services Act 1992
The provision clarifies that the amendments made by Schedule 1 of this Act to
section 25 of the BSA and section 31 of the Radcomms Act do not affect the
continuity of the frequency allotment plan.
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Item 184 Instrument made under subsection 31(1) of the Radiocommunications
Act 1992
The provision clarifies that the amendments made by Schedule 1 of this Act to
section 25 of the BSA and section 31 of the Radcomms Act do not affect the
continuity of an instrument that was made under subsection 31(1) of the Radcomms
Act that was in force immediately before the commencement of Schedule 1 of the
Act.
Item 185 Modification of Ministerial direction given under repealed section 162
of the Broadcasting Services Act 1992
This transitional provision confines the operation of The Australian Broadcasting
Authority (Revisiting Radio LAPs) Direction No. 1 of 2003. After the commencement
of Schedule 1 of this Act, the Direction will be confined in its operation to analog
commercial radio services.
This Direction was made to allow for the issuing of a new commercial radio
broadcasting licence by the regulator in circumstances where a change of ownership
results in a reduction in the number of radio services of general appeal in the market.
The Bill provides that the current Direction is an analog instrument and will continue
to apply to analog radio broadcasting services, irrespective of the introduction of
digital radio. As analog audiences will, for the foreseeable future, be the major
audience, this means the Direction will continue to be effective regardless of its being
confined to analog.
The application of the Direction to digital would have given rise to a number of
concerns. For example, practical difficulties would have arisen in allocating new
digital radio licences when all capacity on a digital radio multiplex transmitter had
been allocated and utilised.
Item 186 Pre-commencement transmitter licences issued under the
Radiocommunications Act 1992
This is a grandfathering provision which ensures that transmitter licences in force
before the commencement of Schedule 1 of the Bill that are authorised to operate
using spectrum which, after the commencement of the Act is designated under
subsection 31(1A) of the Radcomms Act, will not be affected by any subsection
31(1A) designation. In particular, a subsection 31(1A) designation will not affect the
continuity of the licence, operations authorised by the licence or the renewal of the
licence.
This provision is intended to safeguard the operation of licences already authorised to
operate in spectrum that may be designated as BSB for digital radio purposes.
Schedule 2 Other Amendments
Item 3 of Schedule 2 amends the Trade Practices Act 1992 to insert sections 118NE
and 118NI into the definition of protected information under proposed section
155AAA of the TPA. This proposed amendment is consequential to changes
proposed in the Corporations (NZ Closer Economic Relations) and Other Legislation
- 90 -
Amendment Bill 2007 which includes proposed new s 155AAA of the Trade Practices
Act 1974, which would provide information-sharing arrangements between ACMA
and the ACCC including in relation to digital radio multiplex transmitter licence
access undertakings. If the Corporations (NZ Closer Economic Relations) and Other
Legislation Amendment Bill 2007 is passed, the information sharing provisions in it
would replace the provisions in the Bill which provide similar information sharing
arrangements. Items 1 and 2 of Schedule 2 remove these matters from the Radcomms
Act.
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RADIO LICENCE FEES AMENDMENT
BILL 2007
Clause 1 Short title
Clause 1 provides for the citation of the Radio Licence Fees Amendment Act 2007 (the
Amendment Act).
Clause 2 Commencement
Clause 2 provides that the Amendment Act would commence on Royal Assent.
Clause 3 Schedule(s)
By virtue of this clause, a provision of the Radio Licence Fees Act 1964 (the Act) is
amended as set out in Schedule 1 to the Bill.
Schedule 1 Amendment
Radio Licence Fees Act 1964
Item 1 Subsection 4(1) (definition of gross earnings)
Item 1 amends the definition of `gross earnings' in subsection 4(1) of the Act to relate
to one or more services provided under a commercial radio broadcasting licence.
Item 1 is related to the amendments to be made in the Broadcasting Legislation
Amendment (Digital Radio) Bill 2007 (the Digital Radio Bill). The Digital Radio Bill
provides that a commercial radio broadcasting licence will authorise the provision of
more than one service from `digital radio start-up day'.
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