A new approach to AM–FM conversions and in-fill transmitters for commercial radio broadcasting servicesConsultation paperNOVEMBER 2016

CanberraRed Building Benjamin OfficesChan Street Belconnen ACT

PO Box 78Belconnen ACT 2616

T +61 2 6219 5555F +61 2 6219 5353

MelbourneLevel 32 Melbourne Central Tower360 Elizabeth Street Melbourne VIC

PO Box 13112Law Courts Melbourne VIC 8010

T +61 3 9963 6800F +61 3 9963 6899

SydneyLevel 5 The Bay Centre65 Pirrama Road Pyrmont NSW

PO Box Q500Queen Victoria Building NSW 1230

T +61 2 9334 7700 or 1800 226 667F +61 2 9334 7799

Copyright notice

http://creativecommons.org/licenses/by/3.0/au/

With the exception of coats of arms, logos, emblems, images, other third-party material or devices protected by a trademark, this content is licensed under the Creative Commons Australia Attribution 3.0 Licence.

We request attribution as © Commonwealth of Australia (Australian Communications and Media Authority) 2016.

All other rights are reserved.

The Australian Communications and Media Authority has undertaken reasonable enquiries to identify material owned by third parties and secure permission for its reproduction. Permission may need to be obtained from third parties to re-use their material.

Written enquiries may be sent to:

Manager, Editorial and DesignPO Box 13112Law CourtsMelbourne VIC 8010Email: candinfo@acma.gov.au

Contents

Executive summary

Issues for comment

Introduction

BackgroundRadio broadcasting transmission modes 5AM mode 5FM mode 6

AM–FM conversion—historical context 6Drivers for conversion 6Legacy approach to conversions 6

Regulatory context 8

Recent developmentsChange of approach 9Assessing requests for AM–FM conversions 10Eligibility assessment 10Detailed assessment of conversion request 11

In-fill transmitters 15Implementation of AM–FM conversions 15

Invitation to commentMaking a submission 17

Appendix A—List of regional AM single-licensee licence areas

acma | iii

Executive summary

The Australian Communications and Media Authority (the ACMA) is seeking comment on:> a revised approach to considering requests for AM–FM conversion for commercial

radio broadcasting services in single licensee regional licence areas (solus markets)

> requests from commercial radio broadcasting licensees to provide FM coverage ‘in-fill’ transmitters to augment the coverage of an AM or FM main transmitter.

The ACMA and its predecessors have only considered AM–FM conversion of commercial radio broadcasting services in very exceptional circumstances. The ACMA is now proposing to consider requests from commercial radio licensees for AM–FM conversion in regional solus markets outside of these exceptional circumstances.

The new guidance on the ACMA’s approach, if adopted, will replace the document AM to FM conversion and requests for FM in-fill translators, published in 2010.

This paper examines the ACMA’s long-standing approach to AM–FM conversions and the drivers for change. After examining the pros and cons of AM and FM transmission modes, the ACMA now considers that while there is still a place for AM transmitters in Australia, for example, for the provision of wide coverage services, FM radio has the potential to deliver a range of benefits including improved audio quality, reduced signal interference and lower costs.

The conversion of a commercial radio broadcasting service from AM–FM arguably delivers an advantage to the AM licence-owner over any competitors who may have acquired their FM services from the ACMA in a price-based allocation. However, this is not a consideration in the many small ‘solus’ radio licence areas in regional Australia, where the commercial radio broadcasting licences are held by the one entity (licensee).

The ACMA’s proposed revised approach has regard to the statutory, regulatory and technical requirements of such a request for AM–FM conversion including:> the relevant objects of the Broadcasting Services Act 1992 (the Act)> the relevant statutory planning considerations under Part 3 of the Act > the availability of a suitable frequency> mitigating any coverage loss resulting from AM–FM conversions> the Minister for Communications’ request that the ACMA give priority to

undertaking the planning work necessary to convert AM commercial radio licences to FM in solus markets (subject to certain caveats and the above-mentioned statutory requirements).

In short, the caveats seek to ensure that any proposed AM–FM conversion will result in no detriment to other incumbent FM radio licensees, and that the existing audience of the AM services are able to continue to receive the service if it converts to FM.

acma | 1

The ACMA’s proposed approach to FM in-fill transmitters is consistent with the ACMA’s current guidance on this matter. That is, the ACMA has planned for FM in-fills to the extent it is necessary to remediate deficiencies in coverage of the main (AM) transmitter for the commercial radio broadcasting service and the same planning will be extended to radio broadcasting services in the future.

The ACMA is consulting on the revised approach to AM–FM conversions and in-fill transmitters in conjunction with consultation on specific draft proposals to vary licence area plans (LAPs) to facilitate AM conversions in Remote Western Australia, Karratha, Port Hedland and Broken Hill. These are markets where licensees wish to convert, where available FM frequencies for conversion were the easiest to identify, and where stakeholder concerns about conversion are considered unlikely. In preparing these draft proposals to vary LAPs, the ACMA has applied the approach to AM—FM conversion proposed in this paper to illustrate the particular application of the new approach and to expedite conversion in these markets. If the ACMA adopts the approach proposed in this paper, conversions in the ‘harder’ licence areas (where finding a frequency will be more difficult) will follow. The ACMA will work with industry to develop a timetable for the completion of relevant planning. Licence areas in the same geographical region will be considered as a group for the purpose of conversion planning.

2 | acma

Issues for commentThe ACMA welcomes comment on the issues raised in this consultation paper, including the two matters raised below, or any other issues relevant to the ACMA’s proposed guidance about requests from commercial radio broadcasting licensees for AM–FM conversion and in-fill transmitters.

The ACMA has received applications from several AM licensees requesting LAP variations for AM–FM conversion in licence areas where the population of the legally defined overlap exceeds 30 per cent of the population of either of the two affected licence areas. As discussed further under Assessing requests for AM–FM conversions —Eligibility assessment, the ACMA is proposing, at this stage, to restrict the revised approach to AM-FM conversion to markets that are non-competing, that is, where the population of the legally defined overlap is 30 per cent or less of the population of either of the two affected licence areas. However, the ACMA is interested in submissions on whether, and in what circumstances, the revised approach to AM–FM conversions might be extended to markets where the legally defined overlap exceeds 30 per cent and what principles or considerations the ACMA should bring to bear in considering such applications.

It will be important to avoid or minimise coverage loss when converting from AM to FM. Approximating AM coverage may require FM in-fill translators as well as a main transmitter. The ACMA, when considering whether FM conversion of a licence is in the public interest, may need to form a view about the likelihood (or certainty) that in-fill translators will be deployed and maintained. Under Assessing requests for AM–FM conversions— Detailed assessment of conversion request , the paper includes a proposed approach for securing certainty around deployment of in-fill transmitters. In consulting on the revised approach, however, the ACMA is open to considering further options for ensuring planned-for FM in-fill transmitters are implemented. The ACMA invites comment on an appropriate mechanism to ensure FM coverage achieves equivalent coverage to the existing AM transmission.

Details on making a submission can be found at Invitation to comment at the end of this document.

acma | 3

IntroductionHistorically, the ACMA has not agreed to requests for AM–FM conversions for commercial radio broadcasting service transmitters except in exceptional circumstances. Consistent with this policy, the ACMA, in considering requests for FM in-fill augmentation of an AM transmitter, assessed the extent to which the FM signal would duplicate the AM signal coverage to ensure that such requests did not amount to AM–FM conversion ‘by stealth’.

The approach proposed in this paper has been developed in response to an approach to government by the peak commercial radio industry body, Commercial Radio Australia (CRA). CRA has requested that AM–FM conversions be allowed in single licensee (solus) regional licence areas. The Minister for Communications agreed in principle, subject to certain caveats. The Minister subsequently requested that the ACMA give priority to undertaking the planning work necessary to convert these AM commercial radio licences to FM, subject to the ACMA’s statutory broadcast planning considerations under Part 3 of the Broadcasting Services Act 1992 (the Act).

This paper provides contextual background on the differences between AM and FM transmission modes and describes how certain advantages of FM over AM have encouraged some AM licensees to seek conversion to FM. The paper examines the legacy approach to conversions and FM in-fills, and draws out the key issues that the ACMA may need to consider when exercising its planning powers under the Act.

Once adopted, the new guidance on the ACMA’s approach will replace the existing guidance document, AM to FM conversion and requests for FM in-fill translators, published in 2010.

This paper represents the initial step in the ACMA’s public consultation on the regulatory and planning process for AM–FM conversions. The ACMA will also consult on specific proposals for AM–FM conversions. Its preliminary view on specific AM–FM conversion proposals will take into account the matters set out in this draft approach. The ACMA may need to revisit the specific proposals if the draft approach is modified following public consultation.

The approach described in this paper does not apply to requests for AM–FM conversion or in-fill transmitters from licensees of community radio broadcasting services. These requests would be considered on a case-by-case basis, having regard to the General Approach to Analog Planning1 (the general approach) available from the ACMA website. The ACMA will have regard to previous decisions of the ACMA and its predecessors when considering any proposed conversions for AM community radio broadcasting services.

1 The ABA’s General Approach to Analog Planning, Australian Broadcasting Authority, September 2003. This document from the ACMA’s predecessor sets out a general approach that is still relevant to analog broadcast planning. The general approach forms part of the ACMA’s Broadcasting Planning Manual (BPM). The general approach together with other documents in the BPM is available for download on the ACMA website.

4 | acma

BackgroundRadio is a key source of information and entertainment for audiences in Australia. Recent ACMA research found that nine in 10 Australians have listened to radio in the past six months, and 80 per cent in the past seven days.2

Radio broadcasting transmission modesTerrestrial radio broadcasting in Australia features services operating across three transmission modes—Amplitude Modulation (AM), Frequency Modulation (FM) and DAB+ digital radio. In the longer term, industry intends to roll out digital radio into regional areas where it is economically feasible to do so. However, at this time, analog AM and FM radio remain the most important transmission technologies for radio services in Australia and this is particularly so in regional areas.

AM modeIn Australia, AM radio transmissions operate in the broadcast services bands within the medium frequency (MF) band in the frequency range 526.5–1606.5 kHz.

AM transmitter sites typically occupy relatively large areas of ground.3 In addition to the transmitter and its land and building, the necessary AM transmission infrastructure includes a tall guyed antenna and a large metallic ‘ground-plane’ usually buried under the land containing this mast. Antennas, masts and the ground-plane have a limited life. Without re-investment in the infrastructure, AM stations face a degradation in the coverage area over time, due to factors such as corrosion of the ground-plane. In certain locations, AM transmitter sites may have significant real estate value compared to FM transmitter sites, which typically occupy much smaller land areas.

AM broadcasting is firmly established in Australia and the services transmitted using this technology continue to contribute to the diversity of broadcasting services. Nonetheless, the technical limitations of AM radio broadcasting are well known—low fidelity audio reproduction, susceptibility to radiofrequency interference from artificial and natural sources, and variable propagation, particularly at night.

The main advantage of AM radio technology is that it can be transmitted over long distances, rendering it the technology of choice for wide coverage services in sparsely populated areas. This is because frequencies in the MF band propagate along the ground, rather than through the air as line-of-sight signals. MF signals can more easily propagate around natural and artificial barriers than very high frequency (VHF) signals. The potential for AM to cover wide areas has arguably been of greater significance to the national broadcasters (especially the ABC) than it has been to commercial radio broadcasting licensees.

2 2016 Annual consumer telecommunications and media surveys. ACMA, June 2016.3 This may be larger where directional antenna arrays are necessary. AM directional antenna arrays can

consist of additional masts acting in combination with the main mast to produce a directional radiation pattern.

acma | 5

FM modeIn Australia, FM radio services operate in the broadcast services bands within the VHF band in the frequency range 87.5–108 MHz.4

FM transmitters typically require a high site such as a hill or mountain, so that a line-of-sight between transmitter and receivers can be established. FM antennas require little land, and are often co-located on existing communications facilities.

FM is less prone than AM to man-made noise from sources such as power lines, electric lighting and electric motors. FM radio, with its better audio signal to noise ratio, greater frequency response and dynamic range compared to AM technology, produces better quality sound, which is considered particularly important for music-based program formats.

AM–FM conversion—historical contextDrivers for conversionIn 2006, the ACMA published findings on the technical, planning and site issues affecting the provision of AM radio, and the impact of these issues on the business model of AM radio.5

Whilst some metropolitan AM services (notably talkback formats) continue to attract large audiences and are therefore still potentially able to generate revenues comparable to the most successful FM services, FM radio, because of its better sound quality, has become the preferred medium for transmission of music by radio broadcasters, particularly to younger audiences.

The higher infrastructure costs, limited audio quality and interference susceptibility of AM transmission has motivated a number of licensees over the years to seek to convert their transmission mode from AM to FM. The operating mode and frequency band for a particular transmitter operated in accordance with a commercial radio broadcasting licence is set by the ACMA in technical specifications set out in a radio LAP.6

Legacy approach to conversionsThe legislation provides that new commercial radio broadcasting licences are to be price-based allocated. An exception was the allocation of supplementary licences issued to AM licensees in solus markets for a fixed price, which allowed these licensees to commence a second FM-only service, while the legacy service remained in AM mode.7

For the reasons stated earlier in this paper, the ACMA considers spectrum for FM radio to be of higher value than spectrum for AM services and, historically, it has been offered to commercial licensees only via a statutory price-based allocation process, rather than ‘for free’ by varying the technical specifications for the transmitter in a LAP.

4 Low power open narrowcasting services (LPONs) operate in the ‘sub band’ 87.5–88 MHz. Commercial, community, national and high power open narrowcasting FM radio services operate from 88–108 MHz.

5 ACMA, AM radio issues: an examination of technical and engineering issues, their impact on the AM radio business model and digitalisation, 2006. This report examined technical and transmitter site issues, as well as audience, profitability and ownership issues that affect the delivery of AM radio services in Australia.

6 The ACMA can prepare a LAP in accordance with subsection 26(1) of the Act. The LAP sets out the number and characteristics of broadcasting services available in an area.

7 In almost all cases, the solus commercial licensee in a regional licence area holds two licences; the legacy AM licence and an additional FM licence issued in the 1990s under section 39 of the Act for a flat fee of $10,000.

6 | acma

The proposed revised approach would see AM–FM conversions effected by such LAP variations.

The ACMA may change the authorised operating mode and frequency of a commercial radio broadcasting transmitter by varying the LAP and issuing a new transmitter licence (or varying the existing transmitter licence), in accordance with the revised LAP specifications. The process of AM–FM conversion is carried out as a request to vary a LAP’s technical specifications and the FM frequency is included in a transmitter licence held by the licensee. This is in contrast to the situation where a licensee purchases an FM transmitter licence via a price-based allocative process at a substantially greater cost to the licensee.

Because a perceived benefit to a licensee arises from a conversion of AM transmitters to FM, the ACMA’s disposition since 2005 (as set out in its current guidance document) has been to consider conversions only in exceptional cases where perceived ‘equity’ issues do not arise. This position also took account of the strong concerns of the FM licensees, who acquired their licence under a price-based allocation process, about the equity considerations of a ‘free’ over-the-counter conversion. In the current guidance document, it was noted that FM licensees considered:> FM radio services are generally considered more profitable because of the inherent

reception quality> FM radio licensees may have paid a premium in order to obtain the benefits of FM

radio reception.

These equity considerations particularly arise in competitive markets where one competitor may seek an over-the-counter conversion, while another licensee has already paid the FM ‘premium’ at auction.8 Moreover, existing AM commercial radio broadcasting licensees were not barred from bidding for FM licences at the time, subject to any ownership and control limitations such as those in Part 5 of the Act.

Conversion of AM–FM commercial radio services raises other concerns of a policy nature, including but not limited to:> spectrum congestion> issues of differential coverage between the former AM and new FM transmissions> the impact on other radio services in the same or nearby areas, for example, where

conversion would require changes in other radio technical specifications, potential retuning and compensation issues.

Over the years, the ACMA has recognised some exceptions to its general disposition on AM–FM conversion.

The ACMA recognises that using FM transmitters is a cost-effective and practical solution to solve coverage problems where AM options are not available or are regarded as impractical. In the past, the ACMA has licensed FM transmitters as FM in-fills to alleviate coverage deficiencies of AM services. In doing so, the ACMA has taken care to avoid ‘FM conversion by stealth,’ by taking care that the FM in-fills agreed to do not substantially match the existing AM coverage.

8 The process of AM–FM conversion is carried out as a request to vary a LAP’s technical specifications so there is very little cost involved for the licensee in obtaining the FM frequency for the FM transmitter from the ACMA. These costs are considerably less in comparison to those where a licensee purchases an FM transmitter licence via a price-based allocative process. For example, in June 2000, an FM radio licence in Sydney was allocated after being auctioned for $155 million.

acma | 7

On a single occasion, the regulator has also found that exceptional circumstances existed, such that AM–FM conversion of commercial services was in the public interest. The city of Launceston had been served by two competing (separately owned) AM commercial radio broadcasting services. The ACMA concluded that AM–FM conversion for both services in that city was, on balance, in the public interest as it would provide listeners with the advantages of FM without posing any equity issues because there were no existing FM licensees.

Regulatory contextRequests for AM–FM conversion and requests for FM in-fills to supplement existing main transmitters require the ACMA to vary existing or insert new technical specifications in the relevant LAP. The ACMA prepares LAPs under subsection 26(1) of the Act. LAPs determine the number and characteristics, including technical specifications, of broadcasting services in particular areas of Australia with the use of the broadcasting services bands. The ACMA may vary LAPs under subsection 26(2) of the Act.

The ACMA is required to perform its functions in a way that promotes the objects of the Act, including the economic and efficient use of the radiofrequency spectrum.9 In considering the exercise of its powers to vary a LAP, the ACMA is to have regard to the criteria set out in section 23 of the Act.

The general approach illustrates how the ACMA has regard to the section 23 criteria in promoting the objects of the Act when it considers a decision to make or vary a LAP.

When the ACMA amends the technical specifications for a transmitter to implement an AM–FM conversion, most technical parameters will need to change, including frequency, power, and potentially, transmitter location and antenna radiation pattern.

9 Section 23 of the Act states that in performing the functions under Part 3, the ACMA must promote the objects of the Act including the economic and efficient use of the radiofrequency spectrum and is to have regard to the planning criteria set out in paragraphs 23(a)-(g).

8 | acma

Recent developmentsIn January 2015, CRA proposed to the Minister for Communications that commercial radio broadcasting licensees in certain regional areas should be able to convert from AM–FM. CRA proposed that the conversions should be made available to commercial radio broadcasting licensees in regional licence areas in which one licensee holds both of the two commercial licences, and where there is no more than 30 per cent population overlap with another licence area.10 Put simply, CRA proposed that conversions should be restricted to licence areas where there is effectively no competition between commercial radio broadcaster licensees.

After consideration of CRA’s proposal, the Minister has asked the ACMA to give priority to undertaking the planning and licensing work necessary to facilitate AM–FM conversion requests in those markets, in accordance with the ACMA’s statutory obligations under the Act.

The Minister has asked that conversions be subject to the following requirements:> FM conversion does not result in any existing FM radio services being adversely

impacted in terms of their use of spectrum and the technical parameters of their radio transmissions. In other words, other existing radio services are not required to be re-tuned, re-planned or cancelled unless a solution can be found that mitigates these impacts without imposing any costs on the affected parties.

> FM conversion does not result in any significant coverage differences for radio listeners within the affected licence areas so that the vast majority of radio listeners who were able to receive services in AM can continue to do so following conversion to FM.

Change of approachIn response to the Minister’s request, the ACMA has reconsidered its long-standing predisposition against AM–FM conversion requests. The ACMA acknowledges the economic, societal and technological dynamics that are motivating small regional commercial radio broadcasting licensees to seek AM–FM conversions. In many cases, a conversion from AM–FM should provide substantially the same coverage as the AM coverage. Allowing some licensees to use FM technology, with its superior audio quality and immunity from electrical interference, may promote the objects of the Act and may provide a net benefit for both the licensee and listeners.

By limiting conversions to solus licence areas, the ACMA’s main historic objection to conversion—perceived equity—is addressed.

An object of the Act is to promote the availability to audiences throughout Australia of a diverse range of radio (and television) services.11 An AM–FM conversion that maintains coverage equivalence, while providing improved audio quality and reception quality for listeners in regional areas, is likely to improve the effective availability of existing services.

Confining conversions to solus licence areas will address the equity issues described in the Background section of this paper. The proposed approach will further the object of the Act ‘… to provide a regulatory environment that will facilitate the development of

10 Under section 51 of the Act, two licence areas that overlap are treated as one for the purpose of Part 5 of the Act, where the population in the overlap area is more than 30 per cent of the total population of either of those licence areas.

11 Paragraph 3(1)(a) of the Act.

acma | 9

a broadcasting industry in Australia that is efficient, competitive and response to audience needs …’12

The ACMA proposes to consider requests for variations to LAPs to enable AM–FM conversion of existing AM commercial radio broadcasting services when the request is from a licensee in a solus regional licence area and where suitable spectrum is available. Requests for AM–FM conversion are proposed to be considered in the manner set out in this paper.

Assessing requests for AM–FM conversions Eligibility assessmentUnder the proposed revised approach, requests for conversion from a licensee in a regional solus licence area with no overlap with any other licence area will be considered eligible for conversion and move to the detailed assessment phase.

The existence of overlapping licence areas means that some licensees vie for audiences despite the licence area being a solus market. This is recognised in Part 5 of the BSA, which provides that when one licence area overlaps another, if the population of the overlap is more than 30 per cent of the population of either of the two overlapping licence areas, the two licence areas are treated as one for the media ownership and control provisions. This provides a useful threshold when considering whether authorisation of an AM–FM conversion may be inequitable. The ACMA proposes to consider that, prima facie, no equity issues will be taken to exist if any licence area overlap is 30 per cent or less. In the case where the population of an overlap exceeds 30 per cent of the population of either of the two licence areas, the ACMA will assume that the licensees are in contention for audiences. In these markets an AM–FM conversion may give rise to equity issues such as:> a licensee in the overlapping licence area has already paid a premium for FM> the overlapping licence area includes an AM licensee that is ineligible for

conversion because its licence areas is not a solus market.

12 Paragraph 3(1)(b) of the Act.

10 | acma

Appendix A lists the regional AM solus markets, and notes whether an application has been received and whether the population of any overlap with another licence area exceeds 30 per cent in either licence area.

The ACMA has received applications from several AM licensees requesting AM–FM conversion in licence areas where the population of the legally defined overlap exceeds 30 per cent of the population of either of the two affected licence areas. As set out above, the ACMA has assumed that the licensees in those circumstances are in contention for audiences and unlikely to be eligible for an AM–FM conversion under the ACMA’s revised approach. Nonetheless, noting that a greater than 30 per cent overlap is only an indicator and not a guarantee that competition exists, the ACMA is seeking comment from interested parties as to how the ACMA might consider these applications.

Given the Minister’s request that the ACMA give priority to planning AM–FM conversion in solus markets (with no more than 30 per cent population overlap with an adjacent licence area) any consideration of applications from licensees in markets that do not meet this threshold criteria, will be deferred pending further consideration of this issue. The ACMA welcomes comments on this issue. In the interests of speed it will meanwhile prioritise consideration of applications for AM–FM conversions from licensees in non-competitive solus markets (as listed in Appendix A). The relevant applications for AM–FM conversions, that are subject to deferral, have been flagged as not consistent the ACMA’s proposed approach to AM–FM conversion in Appendix A. If, after considering submissions, the ACMA further revises its general policy approach to AM–FM conversions, the ACMA may consult further with the government and industry, as appropriate.

The ACMA would welcome submissions on the circumstances, if any, in which the present proposed policy might apply to AM licensees in licence areas with a greater than 30 per cent population overlap, and, if extension of the policy is supported, any underlying principles or considerations to which the ACMA should have regard when considering requests from these markets for AM-FM conversion.

Detailed assessment of conversion requestUnder the proposed revised approach, the ACMA now considers that in general, AM–FM conversions in solus markets will promote the objects of the Act. Nevertheless, the ACMA needs to consider in detail whether a specific request for an AM–FM conversion is technically feasible, and whether (in all the circumstances) the conversion would promote the objects of the Act. The ACMA assesses such considerations for all LAP variation requests it receives. These considerations require a detailed engineering and policy assessment to be conducted. The ACMA intends to utilise the assistance of a consultant engineer, made available by CRA, to perform the engineering work for most applications. This work will be conducted in accordance with the ACMA’s Broadcast Planning Manual.13 The manual includes guidance on how frequencies are to be selected for new services without compromising existing services through interference. Once the consultant’s work is complete ACMA staff will assess the engineering work before making a recommendation to the Authority.

The FM frequency band in many of the eligible licence areas is already congested. It may not be technically possible to find a suitable frequency to fulfil all conversion requests. In addition, there may be cases where the ACMA has one or more other LAP variation requests on hand that would compete for an available frequency. In

13 Available on the ACMA’s website at: www.acma.gov.au/Industry/Broadcast/Spectrum-for-broadcasting/Spectrum-radio-broadcasting/broadcasting-planning-manual-spectrum-for-broadcasting-acma.

acma | 11

such cases, the ACMA will need to consider which use of the spectrum best promotes the objects of the Act. The ACMA will consult on pre-existing requests for LAP variations that may be affected by AM–FM conversions, or may affect such conversions, at the same time as the relevant conversions are considered to ensure the decision-making process is transparent to affected licensees.

In performing its functions in varying a LAP to facilitate a conversion, the ACMA may have regard to such other matters as it considers relevant.14 In this context, the ACMA proposes to have regard to the two caveats mentioned in the Minister’s request. Taking these in turn:

1. FM conversion does not result in any existing radio services being adversely impacted in terms of their use of spectrum and the technical parameters of their radio transmissions.

This reflects the ACMA’s customary approach to broadcast planning. The ACMA does not plan specifications for new transmitters that would cause interference to the reception of existing services within the service area (it should be noted, however, that some services are planned on an interference-limited basis, which may reduce the usual coverage area). Therefore, the Minister’s caveat does not represent a departure from the ACMA’s normal practice. However, in exceptional cases, the ACMA has required existing licensees to change specifications (for example, to move to a new frequency) to allow for a new service to be planned. The Minister has asked the ACMA not to exercise these powers to re-plan existing services to make way for conversions unless there is an agreement between the converting licensee and the affected licensee over mitigation of the latter’s costs.

The ACMA considers that this approach supports the objects of the Act. In exceptional cases, the objects of the Act may have been best served by requiring a licensee to change its technical specifications to make way for another service. However, for AM–FM conversions, the ACMA considers that the benefits of conversions described in this paper to the licensee and to the audience will not usually be sufficient to warrant imposing costs on other licensees.

An example of a case where the AM–FM conversion may have an effect on an existing service is a scenario where a community broadcasting licensee is using a frequency for its low-power service. This frequency (alone in the area) may also be suited to a high-power service that would enable AM–FM conversion of a commercial service. Another frequency may be available and suitable for the low power community broadcasting service, if it were able to migrate. Migration of frequencies is no small matter for any radio service. As well as the costs of retuning or replacing transmission equipment, there will be costs for informing listeners of the new frequency and remaking promotional material. However, the commercial licensee may be able to offer suitable incentives and assistance to the other station to change frequency.

The ACMA may facilitate options such as swapping an AM frequency for an FM frequency between a licensee seeking conversion and other licensees if the converting licensee could present a written agreement with the other licensees. However, prior to facilitating such an arrangement, the ACMA would need to form its own view about whether such an arrangement would support the objectives and broadcasting planning criteria under the Act.

It should be noted that the general approach assumes that reception of services outside of the planned service area is fortuitous, and the ACMA will not protect fortuitous reception of existing transmitters when planning specifications for new transmitters.

14 Paragraph 23(g).

12 | acma

Consideration of existing services in adjacent licence areas and those of national broadcasters are relevant because they may constrain the availability of frequencies in the area being planned. In addition, the ACMA proposes to take into consideration any impact the conversion may have on future planning options for other radio services. Consideration could include the impact upon services in circumstances where:> a request for a variation to a LAP has already been made (in the relevant licence

area or adjacent licence), for example, proposals to expand or increase coverage of existing FM services through additional transmitters or increased power

> potential services are planned in a LAP (or adjacent LAPs) but not yet commenced> the planning flexibility remaining to existing FM radio services is potentially limited.

In these instances, the ACMA will have to give careful consideration to the competing uses of broadcasting spectrum on a case-by-case basis to achieve the optimal planning outcome. Such consideration will be undertaken with regard to the planning criteria in section 23 of the Act.

Consideration may be given to allocating spectrum previously reserved for national broadcasting services. This would be weighed against the impact on future options for national broadcasting services. However, as spectrum is no longer reserved for national broadcasting by the Minster, the ACMA may plan other uses for the spectrum previously reserved for national broadcasters as sequestered.15

2. FM conversion does not result in any significant coverage differences for radio listeners within the affected licence areas so that the vast majority of radio listeners who were able to receive services in AM can continue to do so following FM conversion.

As discussed in Background, the line-of-sight nature of FM signal propagation means that an FM transmitter generally will have a smaller service area than an AM transmitter. It is obvious that the benefits of AM–FM conversion to audiences cannot be realised by those who cannot receive the new FM transmission. It therefore supports objects of the Act for the ACMA to plan conversions to minimise loss of service.16

Under the proposed revised approach, in undertaking the technical planning for the conversion, the ACMA will assess the proportion of the population likely to be covered by the new FM transmission in comparison to the population coverage of the current AM transmitter.

The ACMA’s methodology for coverage planning under the proposed revised approach is first to determine a power for the main FM transmitter that will match the coverage for the FM service planned for the licensee in the area served, provided under a licence allocated under section 39 of the Act.17 The ACMA will then examine the extent of any service loss and may revise technical specifications, based on the transmitter for the section 39 licence, to mitigate this. If this is not predicted to resolve coverage loss, it may be necessary for the licensee to agree to deploy additional FM in-fill transmitters to achieve equivalent coverage of the current AM transmission. In

15 On 1 October 2015, the Notice for National Radio Broadcasting Services (No 1) 2005 (the Reservation Notice) expired (by sunsetting). Although the Reservation Notice has sunsetted, frequencies to satisfy the reservations in that notice were previously planned in LAPs.

16 In particular, paragraph 3(1)(a) on the basis that this caveat maintains the availability of an FM transmission to the audience that received the (pre-conversion) AM transmission insofar as practicable.

17 In almost all cases, the solus commercial licensee in a regional licence area holds two commercial radio broadcasting licences; the legacy AM licence and an additional FM licence allocated in the 1990s under section 39 of the Act for a flat fee of $10,000 by the ABA. The section 39 FM licence was allocated where the licence area for the ‘parent’ licence did not have an excessive overlap area. An ‘excessive overlap area’ is defined under subsection 39(5).

acma | 13

forming its preliminary view about the proposed conversion, the ACMA may, in accepting the licensee’s agreement to implement planned-for FM in-fill transmitters, take into account whether or not the licensee has commenced operation of similar FM in-fill transmitters already planned in the LAP for the FM service provided under the section 39 licence in the same licence area.

Further, consistent with the Minister’s caveat that the vast majority of listeners that can receive the AM service should be able to receive the service in FM following conversion, the ACMA expects that any planned-for in-fill transmitters will be implemented. To this end the ACMA proposes to place a condition on the availability of the technical specification of the main FM transmitter, effectively requiring that a service must not commence using that technical specification unless any in-fill transmitters, planned to avoid coverage loss, commence transmission at the same time as the main FM transmitter.

In consulting on the revised approach, the ACMA is open to considering further options for ensuring planned-for FM in-fill transmitters are implemented. The ACMA invites comment on an appropriate mechanism to ensure FM coverage achieves equivalent coverage to the existing AM transmission.

In considering whether the ‘vast majority’ of listeners can still receive a service, the ACMA will have regard to several of the section 23 planning criteria, including but not limited to:> Demographics18—the proportion of the population within the licence area who

receive the AM service that is no longer predicted to receive a service, and the distribution of that population. The ACMA will also have regard to the assumption in the general approach that, when planning the technical characteristics of services, communities with a population of 200 people or more are entitled to expect a service from a broadcaster that is licensed to provide one.19

> The number of existing broadcasting services within the licence area20—the extent of alternative services available to listeners may be a consideration as will any available information on listening habits in the area.

> The technical constraints relating to the delivery or reception of broadcasting services.21

> Such other matters as the ACMA considers relevant.22

As a general rule, the ACMA does not protect fortuitous reception.23 However, the AMCA cannot rule out that there may be circumstances where it may take account of the fortuitous coverage, for example, the hypothetical scenario where a conversion would result in a listening audience losing the fortuitous reception of the AM service (being the only service it can receive), and would be unable to receive the service fortuitously once converted to FM.

Further, when considering the extent and implications of coverage loss in a licence area that may arise from a conversion, the ACMA will take into account relevant responses during consultation. If the ACMA forms a preliminary view that the coverage

18 Paragraph 23(a) of the Act.19 This assumption is relevant only when planning the technical characteristics of service (transmitters). The

ACMA will ensure, as far as possible, that the technical characteristics of the transmitter would enable the service provider to provide a service to communities within the licence area with a population of 200 or more.

20 Paragraph 23(c) of the Act.21 Paragraph 23(e) of the Act.22 Paragraph 23(g) of the Act.23 See p. 35 of the general approach to Analog Planning.

14 | acma

loss resulting from conversion to FM is significant and there are no practical remedial measures available, the ACMA is likely to refuse such a conversion request.

In-fill transmittersIn-fill transmitters are planned by the ACMA in LAPs in order to allow a licensee to address a deficiency in the coverage from its main transmitter. An in-fill transmitter is essentially a transmitter that may be deployed to supplement an AM or (possibly) an FM service. Most, but not all, in-fill transmitters are planned for the FM band. In-fill transmitters are planned to augment but not to replace or duplicate the coverage of the main transmitter.

The proposals in this paper are intended to leave the ACMA’s guidance on requests for FM in-fill transmitters as largely unchanged. In cases where no viable AM option exists, the ACMA may allow FM ‘in-fill’ services to address AM coverage deficiencies, but not to replace the AM service.

The ACMA would generally be disposed to agree to an FM in-fill to augment AM or FM services where:> the required spectrum is available> the existing coverage is deficient in some way> it is not practical to modify the technical characteristic of the main transmitter to

resolve the coverage deficiency> where one or more FM in-fills is considered to be the best option for augmenting

the coverage of the main transmitter, having regard to the economic and efficient use of spectrum and the objects of the Act.

In circumstances where issues of equity with other FM licensees may arise, regard will be had to the extent to which a requested FM in-fill transmitter duplicates coverage in areas receiving adequate AM coverage.

Where a licensee is not in a licence area that is eligible for an AM–FM conversion, the ACMA will continue its current approach of carefully assessing any proposal for in-fill transmitters to ensure that the proposal does not, in effect, provide an AM–FM conversion.

Implementation of AM–FM conversions In requesting the ACMA give priority to AM–FM conversions in regional solus licence areas, the Minister has asked the ACMA to consider LAP variation requests for AM–FM conversion in a manner that is consistent with the exercise of its obligations in relation to broadcasting planning pursuant to Part 3 of the Act. The ACMA will also take the opportunity to deal with non-conversion-related variation requests already made in relation to the relevant LAP, wherever this is feasible, and will not unduly delay the LAP variation process for AM–FM conversion.

Licensees requesting AM–FM conversion may seek a simulcasting period of the AM and FM transmitters in order to transition listeners to the FM transmission. The ACMA is proposing in general to require a 28-day simulcast period as a minimum requirement.24 The ACMA may permit simulcasting for a longer period if the circumstances warrant a longer simulcast period. Transmission on the AM transmitter must cease at the end of the simulcast period.

24 CRA also proposed that converting transmitters would have a 28-day simulcast period in which a service would be provided by both AM and FM transmitters, after which the AM transmitter would be permanently switched off.

acma | 15

In the absence of good reasons to the contrary, the ACMA will not normally permit coverage duplication for an indefinite period, that is, where there are AM and FM transmitters broadcasting the same programming within the same licence area (or overlapping licence areas) and the FM coverage closely approximates the AM coverage.

Consultation on the revised approach to AM–FM conversions and in-fill transmitters is being conducted in conjunction with consultation on specific proposals for LAP variations to permit AM–FM conversions in remote Western Australia, Karratha, Port Hedland and Broken Hill. These licence areas have all been assessed by the ACMA as ‘easy’ markets for conversion, as frequencies were readily available.

Based on a technical assessment by ACMA engineering staff, the degree of difficulty of the conversions was graded from ‘easy’ to ‘hard’, with ‘easiest’ markets attracting the highest priority. The degree of difficulty was assessed on the basis of spectrum availability within the licence area.

As the ACMA is utilising the assistance of a consultant engineer made available by CRA to perform the engineering work for most applications, the progress and timing of AM–FM conversions is dependent on industry’s sponsored work program. The ACMA’s consideration of the various factors outlined in this paper may also affect the timing and prioritisation of conversion of particular services. The ACMA’s consideration of responses to consultation on the proposed revised approach, and its consideration of whether to adopt the proposed revised approach, may also affect the timing of conversion of services.

Concurrently with the ACMA’s consideration of the easy markets, the ACMA has asked the industry’s consultant engineer to commence pilot studies in Bathurst NSW and Tasmania that will validate the methodology and to provide a useful template for identifying and resolving issues in the other ‘harder’ markets.

The ACMA proposes that draft LAP variations for the applications in the pilot areas that are compliant with the approach outlined in this paper would follow the easy markets.

For more general information on the ACMA’s approach to prioritising radio LAP variations, please refer to Assessing and prioritising requests to vary radio licence Area Plans (LAPs.

16 | acma

Invitation to commentMaking a submissionThe ACMA invites comments on the issues set out in this consultation paper or any other issues relevant to the ACMA’s proposed approach to consideration of requests from commercial radio broadcasting licensees for AM–FM conversion and in-fill transmitters. > Online submissions —submissions can be made via the comment function or by

uploading a document. The online consultation page provides details.> Submissions by post—can be sent to:

The ManagerBroadcasting Carriage Policy SectionSpectrum Management Policy BranchAustralian Communications and Media AuthorityPO Box 78Belconnen ACT 2616

The closing date for submissions is COB, Friday 2 December 2016.

Electronic submissions in Microsoft Word or Rich Text Format are preferred.

Enquiries> Consultation enquiries can be emailed to laprequests@acma.gov.au.> Media enquiries can be directed to Emma Rossi on 02 9334 7719 or by email to

media@acma.gov.au.

Effective consultation The ACMA is working to enhance the effectiveness of its stakeholder consultation processes, which are an important source of evidence for its regulatory development activities. To assist stakeholders in formulating submissions to its formal, written consultation processes, it has developed Effective consultation—a guide to making a submission. This guide provides information about the ACMA’s formal written public consultation processes and practical guidance on how to make a submission.

Publication of submissionsIn general, the ACMA publishes all submissions it receives. The ACMA prefers to receive submissions that are not claimed to be confidential. However, the ACMA accepts that a submitter may sometimes wish to provide information in confidence. In these circumstances, submitters are asked to identify the material over which confidentiality is claimed and provide a written explanation for the claim.

The ACMA will consider each confidentiality claim on a case-by-case basis. If the ACMA accepts a claim, it will not publish the confidential information unless authorised or required by law to do so.

Release of submissions where authorised or required by lawAny submissions provided to the ACMA may be released under the Freedom of Information Act 1982 (unless an exemption applies) or shared with various other government agencies and certain other parties under Part 7A of the Australian Communications and Media Authority Act 2005. The ACMA may also be required to release submissions for other reasons including for the purpose of parliamentary processes or where otherwise required by law (for example, under a court subpoena). While the ACMA seeks to consult submitters of confidential information before that

acma | 17

information is provided to another party, the ACMA cannot guarantee that confidential information will not be released through these or other legal means.

PrivacyThe Privacy Act 1988 imposes obligations on the ACMA in relation to the collection, security, quality, access, use and disclosure of personal information. These obligations are detailed in the Australian Privacy Principles.

The ACMA may only collect personal information if it is reasonably necessary for, or directly related to, one or more of its functions or activities.

The purposes for which personal information is being collected (such as the names and contact details of submitters) are to:> contribute to the transparency of the consultation process by clarifying, where

appropriate, whose views are represented by a submission > enable the ACMA to contact submitters where follow-up is required or to notify

them of related matters (except where submitters indicate they do not wish to be notified of such matters).

The ACMA will not use the personal information collected for any other purpose, unless the submitter has provided their consent or the ACMA is otherwise permitted to do so under the Privacy Act.

Submissions in response to this paper are voluntary. As mentioned above, the ACMA generally publishes all submissions it receives, including any personal information in the submissions. If a submitter has made a confidentiality claim over personal information that the ACMA has accepted, the submission will be published without that information. The ACMA will not release the personal information unless authorised or required by law to do so.

If a submitter wishes to make a submission anonymously or use a pseudonym, they are asked to contact the ACMA to see whether it is practicable to do so in light of the subject matter of the consultation. If it is practicable, the ACMA will notify the submitter of any procedures that need to be followed and whether there are any other consequences of making a submission in that way.

Further information on the Privacy Act and the ACMA’s privacy policy is available at www.acma.gov.au/privacypolicy. The privacy policy contains details about how an individual may access personal information about them that is held by the ACMA, and seek the correction of such information. It also explains how an individual may complain about a breach of the Privacy Act and how the ACMA will deal with such a complaint.

18 | acma

Appendix A—List of regional AM single-licensee licence areasTable 1: List of regional AM single-licensee licence areas

Licence area More than 30% overlap25

AM–FM conversion applications

received

Geographic groups for AM–FM

conversions26

Consistent with the ACMA’s proposed

approach to AM–FM conversions27

Albany Yes F Yes

Alice Springs - - Yes

Armidale Yes A Yes

Bathurst Yes Pilot 1 Yes

Bega Yes C Yes

Bridgetown - - N/a

Broken Hill Yes Easy Yes

Burnie Yes Yes Pilot 2 No

Carnarvon - - –

Charleville - - –

Charters Towers - - –

Colac - - –

Cooma Yes C Yes

Darwin - - –

Deniliquin Yes Yes D No

Devonport Yes Yes Pilot 2 No

Esperance - –

Goulburn Yes C Yes

Grafton Yes B Yes

25 These licence areas overlap with the licence area of another commercial radio broadcasting licensee and the population of the overlap areas is more than 30 per cent of the population of one or both of the overlapping licence areas. Applications for conversions in these licence areas will need to be considered in accordance with the threshold eligibility requirements proposed in this paper.

26 Note: The geographic groups, listed as A-F, represent adjacent licence areas that will be considered at the same time for planning purposes. The geographic grouping of applications will facilitate planning for ‘harder’ conversions in technically-interrelated markets. The letter assigned to each group does not indicate the order in which the conversions will be planned. The purpose of the pilots is to ensure that the ACMA’s criteria for the consideration of an AM–FM conversion is addressed by the consultant’s engineering reports.

27 – denotes that an application has not been received.

acma | 19

Griffith - - –

Gunnedah Yes A Yes

Hamilton - - –

Horsham - - –

Innisfail - - –

Inverell Yes A Yes

Kalgoorlie - - –

Karratha Yes Easy Yes

Katanning - - –

Lismore Yes B Yes

Lithgow Yes Yes D No

Longreach - - –

Mandurah Yes F Yes

Maryborough (Vic.)

Yes - - –

Merredin - - –

Moree Yes A Yes

Mt Gambier - - –

Mudgee - - –

Murray Bridge Yes E Yes

Murwillumbah Yes - - –

Muswellbrook Yes - - –

Narrogin - - –

Northam - - –

Nowra Yes C Yes

Parkes Yes D Yes

Port Hedland Yes Easy Yes

Port Lincoln Yes E Yes

Queenstown Yes Pilot 2 Yes

Remote WA Yes Easy Yes

Riverland Yes E Yes

Sale Yes - - -

Scottsdale Yes Pilot 2 Yes

20 | acma

Spencer Gulf North

Yes E Yes

Swan Hill -

Tamworth Yes A Yes

Taree Yes B Yes

Wagga Wagga -

Wangaratta Yes H Yes

Warrnambool Application anticipated

G Yes

Young Yes D Yes

acma | 21