Narrowcasters triumph in radio licence auction

While most people in Australia have been focused on the political hyper-activity in Canberra over the past week or so, in the wake on an historic election result, most would have been unaware of another contest that was played out in Canberra. The stakes are not nearly as great, but it is a race worthy of note nonetheless.

The Australian Communications and Media Authority held a radio licence auction recently to add some new High-Power Open Narrowcast (HPON) (PDF 1.14MB) licences that were released this year after a public consultation process. These five new licences and the groups who won them at the auction are listed below. (See media release.)

• FM 104.9 Network Pty Ltd - Chinese Radio International (CRI Beijing) allied organisation based in Perth, where they currently use an HPON on 104.9 MHz FM with 50W power on a leased basis.
• Tasradio Pty Ltd - Racing Radio (Tote Sport Radio) operate commercial broadcast stations in Tasmania, as well as more than a dozen LPONs and a couple of HPONs across the state. 7EXX is the callsign for Launceston on 90.1 MHz FM. They also own an 87.6 FM LPON in Launceston.
• Gumnut Nominees Pty Ltd - This company broadcasts under the name of the Melbourne-based groupe “Rete Italia”, a division of Italian Media Australia. Rete Italia own HPONs (all AM-band) in many capital cities, and dozens of Medium Frequency Narrowband Area Service (MF-NAS) licences between 1611 kHz and 1629 kHz in significant markets across Australia.
• Racing and Wagering WA (RWWA) - Racing Radio in WA is NOT a commercial broadcaster, unlike its counterparts such as Tasradio in Tasmania, 2KY in New South Wales and 3UZ in Victoria. RWWA only own and operate on narrowcast licences, including an HPON in Perth (1206 kHz) and several other HPONs and LPONs across the state. They currently own an 88 FM LPON in Kalgoorlie and nothing in Kambalda.

Narrowcasting is, as the name implies, the opposite of broadcasting, a term with which everyone is familiar. Broadcasters can, within a few essential rules, transmit anything they like, and make money out of selling advertising. Narrowcasters have much tighter rules governing a station’s format and style. But within those narrow definitions, a licence holder can transmit a signal freely and still sell commercial advertising on a frequency that is open to any normal consumer-grade radio.

Open narrowcasting is best defined as “niche” broadcasting. A narrowcast format is one which is limited in some way. The most commonly understood narrowcast formats are those that “narrowcast” in a language other than English, usually a single language like Italian or Greek or Chinese or Arabic. Another format is religion (Christian, Muslim etc). Racing Radio is considered narrowcasting, despite some racing radio services being broadcast on commercial radio stations. Some music formats are classed as narrowcasting within strict limits. Dance-trance club music, smooth jazz, and country music are often found being transmitted on narrowcast licences, both low-power (one watt) and high power (5 to 50,000 watts).

In this round of allocations, the genuine narrowcasters won the day, outbidding commercial broadcasters in every race. This is a welcome surprise. Commercial broadcasters with deep pockets were entered in every race and the prices did go high partly as a consequence of their participation.

Commercial radio station owners often fear the appearance of powerful HPON licences in their markets. They will often fight to secure these assets as a defensive measure, and in a sense neutralise the supposed threat to their market dominance. They cannot sit on an HPON licence (i.e. hoard the licence by not activating it): it must be activated within six months of being issued (although some do hoard LPONs, which is contrary to the rules). But in controlling the licence, they determine what format it will be, and they can derive some revenue from that.

However, as country music has developed as a viable commercial narrowcast format, commercial broadcasters are increasingly interested in securing HPONs in order to expand their own narrowcast networks and cash in on the popularity of this niche in the radio landscape.

Perth

The Chinese defeated the Italians, the Lebanese (Arabic - Radio 2Moro 1620) and Radio Perth 6iX and two other applicants in the contest for the Perth HPON. The Chinese will continue to use their 50W HPON until their new one is fully installed. Perhaps losing applicant Firebird Park Pty Ltd, also known previously as "Hype FM", will find an opportunity to lease this 104.9 MHz frequency in Perth when it becomes available. Perth now has five HPONs - more than any other capital city in the country!

The HPON licence offered for Perth has been permitted to operate at 5000 watts maximum power in a directional radiation pattern. With these parameters, the 90.5 MHz FM signal, broadcasting from a nominal site in Gosnells, has the potential to cover the metro area from Rockingham to Joondalup and east to Midland. This is a massively powerful city-wide narrowcast radio licence, arguably the most impressive configuration even offered for an HPON class licence in any Australian capital city to date.

Both of the linguistically-based narrowcasters aspired to get this licence in order to improve their coverage and audience in Perth. The 50W station currently being used by the Chinese group does not offer adequate coverage across Perth. And Rete Italia are probably responding to demographic changes in their Italian support base, attempting to transition from being an AM narrowcaster to an FM narrowcaster, and thereby attract and hold a younger audience who generally don’t listen to AM radio.