Administrative Decisions (Judicial Review) Act 1977 (Cth)

Broadcasting Act 1942 (Cth) - ss.4(16), 89DAA, 89DAB, 89DAE, 89DAH, 89DAL, 89DAP

Counsel for the applicant: Mr J.J. Spigelman QC and Mr R. Dubler

Solicitor for the respondent: Australian Government Solicitor

The parties bring in short minutes within 14 days setting out the form of order and dealing with the costs of the application.

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

This application seeks orders of review under the Administrative Decisions (Judicial Review) Act 1977 (Cth)("the ADJR Act") in respect of decisions, or perhaps conduct leading to the making of decisions, constituted by amendments published in the Commonwealth of Australia Gazette of 14 February 1990 and of 21 February 1990 to an invitation to tender issued by the Minister under s.89DAB of the Broadcasting Act 1942 (Cth)("the Act") and published in the Gazette on 18 April 1989. The applicant, Wesgo Communications Pty Limited ("Wesgo") is the holder of a licence to operate an AM radio station transmitting from Penrith in the western suburbs of Sydney. Wesgo alleged that it was adversely affected by the content of the amendments of 14 February and 21 February 1990.

2. The issue concerns the effect of the provisions introduced into the Act by the Broadcasting (National Metropolitan Radio Plan) Act 1988 (Cth), which provisions were concerned to authorise the conversion of some AM radio licences to FM radio licences. The issue appears to be whether the amendments introduced in 1988 should be interpreted and applied having regard to the words used by the statute or whether, on the other hand, they should be interpreted and applied in the light of concepts which were introduced into, or reinforced in, the Act in 1985 by the Broadcasting and Television Amendment Act 1985 (Cth).

3. Objectives of the amendments introduced in 1988 are stated as follows:-

(a) to convert to FM 2 AM commercial radio

licences in each large city or town;

(b) to allow the determination of which

licences are to be converted to be

made on the basis of competitive

bids;

..."

It is provided that the Minister may publish a notice inviting AM licensees in a particular large city or town to tender for the conversion of their licences to FM.

"89DAB.(1) The Minister may publish a notice

in the Gazette that invites licensees who hold

AM commercial radio licences in a particular

large city or town to lodge applications with

the Tender Board for conversion of their

licences to FM.

(2) The notice shall:

(a) specify whether one FM frequency or 2

FM frequencies are to be allocated

pursuant to the notice;

(b) set out an outline of the new

technical conditions proposed for that

frequency or each of those

frequencies;"

On 18 April 1989 such a notice was published in the Gazette. For the City of Sydney, two FM frequencies were to be allocated.

5. Sections 4(16) defines the holder of an AM licence in a particular large city or town in these terms:-

"(16) For the purposes of this Act, an AM

commercial radio licence is in a large city or

town if:

(a) the service area of the licence includes

the general post office or main post

office of a large city or town; or

(b) the following conditions are satisfied:

(i) the licence (in this paragraph

called the 'first licence') is

specified in a declaration under

subsection 89T(2) as having a

substantial market in common with

another AM commercial radio

licence (in this paragraph called

the 'second licence');

(ii) the service area of the second

licence includes the general post

office or main post office of a

large city or town;

(iii) at the time when the declaration

under subsection 89T(2) was made,

the Minister was satisfied that

more than 30% of the population

of the service area of the second

licence was also within the

service area of the first

licence."

It is agreed that Wesgo at all relevant times satisfied the requirements of s.4(16)(b). Accordingly, it was entitled to tender.

6. This entitlement was given by s.89DAE which provides inter alia:-

"89DAE. (1) Where the Minister publishes a

section 89DAB notice in relation to a city or

town, a licensee who holds an AM commercial

radio licence in that city or town may lodge

with the Tender Board an application for

conversion of the licensee's licence to FM.

(2) An application must:

...

(c) be accompanied by a sealed envelope that

contains a written statement of the

amount of the licensee's bid for

conversion of the licensee's licence to

FM;

(d) be accompanied by either:

(i) a written statement by the

Secretary approving the technical

adequacy of the transmission

equipment that the licensee

proposes to transfer to the

Commonwealth in part satisfaction

of the licensee's bid, if

successful; or

(ii) a written statement by the

Secretary approving the technical

adequacy of that equipment subject

to the licensee making the

improvements specified in the

statement;"

7. Once the bids have been lodged, the Tender Board is to reject applications which do not meet criteria laid down by the Act. It is then to report on the bids and the amount of the bids. Section 89DAH provides inter alia:-

"(4) The Tender Board shall then prepare a

list that sets out the names of the remaining

licensees and the amounts of their bids in

descending order according to the amounts of

their bids.

(5) Where the bids of 2 or more licensees are

the same, the order in which the licensee's

names are to be set on the list shall be

determined by lot in accordance with the

regulations.

(6) The Chairperson of the Tender Board shall

give the Minister the list prepared under

subsection (4)."

8. The Minister is then required to offer FM conversion to licensees strictly in accordance with this tender list. Section 89 DAL provides:-

"89DAL. (1) Where the Minister receives a

tender list under subsection 89DAH(6), the

Minister shall, subject to section 89DAN, make

an offer or offers of FM conversion in

accordance with this section and section

89DAM.

(2) If there is only one licensee on the

tender list, the Minister shall offer FM

conversion to that licensee.

...

(4) If:

(a) there are 2 or more licensees on the

tender list; and

(b) 2 FM frequencies are to be allocated

pursuant to the section 89DAB notice;

the Minister shall offer FM conversion to the

licensees who are highest and second highest

on the tender list."

9. The Minister's discretion is a limited one as may be seen from s.89DAP which provides:-

"89DAP. (1) Where:

(a) a licensee is offered FM conversion

pursuant to section 89DAB notice; and

(b) the licensee meets the necessary

preconditions for conversion before the

end of the period specified in the notice

that contains the offer;

the Minister shall convert the licensee's

licence to FM accordingly.

(2) Where 2 FM frequencies are to be

allocated pursuant to the section 89DAB

notice, the Minister shall, in converting a

licence or licences to FM pursuant to the

notice, have regard to the desirability,

subject to planning considerations, of the

licensee who is alone on the tender list, or

highest on the tender list, having the

licensee's licence converted to whichever of

those frequencies the licensee prefers."

10. Wesgo, which operates the AM commercial radio station 2WS, holds a licence, terms of which are that it should operate a studio at 2 Leabons Lane, Seven Hills and transmit from a site at Church Lane, Prospect, in the Penrith area. Wesgo' s service area, defined in s.4(1) of the Act as "the area to be served pursuant to the licence" is specified in terms of certain areas which comprise most of the western suburbs of Sydney. In broadcasting to these areas, Wesgo also broadcasts to many areas outside its service area. It appears that the technical specifications attached to the licence do not have the effect of limiting Wesgo's broadcasts strictly to its service area.

11. All other AM commercial radio stations in Sydney have service areas which encompass the General Post Office in Sydney. Accordingly, their licences fall within paragraph (a) of the definition of "licence ... in a large city or town" in s.4(16) of the Act whereas Wesgo, whose service area is in the western suburbs, falls within paragraph (b) of the definition. One result of the difference in the service areas is that Wesgo has a service area whose population is only one-third of the population of the service areas of the other Sydney AM commercial radio stations.

12. The original invitation to tender, published under s.89DAB of the Act, met the terms of s.89DAB insofar as it specified that, for Sydney, a large city or town, there would be two frequencies - 100.1 MHz and 101.7 MHz - and specified appropriate technical conditions including a transmitter site in Willoughby. Presumably as FM radio, unlike AM radio, requires the use of transmission towers like those used by television stations, it was intended that one of the three towers at Artarmon would be used.

13. The notice published on 18 April 1989, however, did not meet the provisions of s.89DAB insofar as it said:-

"The above site and technical characteristics

are applicable only to those tenderers whose

existing AM service areas include the Sydney

GPO. Other tenderers must, if successful,

negotiate with the Department for approval for

alternative FM transmitter sites and technical

conditions which maintain their existing AM

service areas."

If for no other reason, this provision did not specify the technical conditions proposed for each of two frequencies but left the matter for negotiation.

14. The amending notice of 14 February 1990 deleted this provision and provided for an additional frequency of 99.3 MHz of which the transmitter site was to be Prospect Hill, Penrith and of which the notice said:-

"The above site and technical characteristics

are applicable only to those Licensees in

Sydney who satisfy the conditions stipulated

in s.4(16)(b) of the Broadcasting Act 1942."

It is that matter set out in the notice of 14 February 1990 which is principally the subject of this dispute.

15. The effect of the amendment made by a notice published in the Government Gazette of 13 September 1989 and the notice in the Gazette of 21 February 1990 was to substitute for the two frequencies previously mentioned the frequencies of 106.5 MHz and 101.7 MHz. The application for review challenged the notice of 21 February 1990 but did so at a time when the existence of the notice of 13 September 1989 was not known or had been overlooked. That challenge has not been proceeded with and the only matter that now remains in respect of it is the question of costs.

16. The intent of the amendment made by the notice of 14 February 1990 was to limit Wesgo to bidding for an FM licence the technical conditions of which would limit it more or less strictly to broadcasting in its service area. Apparently the specifications for an FM licence can limit the range of broadcasting rather more precisely than can the specifications of an AM licence. Whether or not that be so, it is common ground between the parties that the intent of the amendment was to impose upon Wesgo terms and conditions which were thought to be appropriate having regard to its service area, and therefore to require it, if successful in its tender, to transmit from a transmitter within its service area in accordance with specifications which would limit the range of its broadcast. Were Wesgo to be permitted to broadcast from a transmitter site at Willoughby in the 106.5 MHz or 101.7 MHz frequencies and in accordance with the technical conditions attached to those frequencies, Wesgo would have a range similar to that of any other successful tenderer.

17. Mr J. Spigelman, QC, with whom Mr R. Dubler of counsel appeared for Wesgo, submitted that the Act gave the Minister no power to differentiate between licensees falling under paragraph (a) of the definition in s.4(16) and those falling under paragraph (b) thereof; nor to specify more than two frequencies and the conditions thereof; nor to take planning considerations into account save to the limited extent permitted by s.89DAP, namely, to have regard to planning considerations in determining which of the two specified frequencies should be allocated to the highest tenderer.

18. Mr Spigelman submitted that the Minister's action had been intended to preclude Wesgo from tendering for an FM radio licence in one of the two frequencies nominated, 106.5 MHz and 101.7 MHz, and the technical conditions attached thereto. Mr Spigelman submitted that Wesgo had not been given the opportunity of tendering for a licence in the frequencies and conditions offered to other tenderers nor were the other tenderers given an opportunity to tender for a licence having the frequency and conditions which were specified for Wesgo.

19. Mr Spigelman submitted that this was contrary to the intent of the Act which requires that no more than two frequencies will be specified, that their technical conditions will be stated and that the matter will then be determined purely on a competitive basis, the two highest bidders being the successful applicants and the highest tenderer having the choice of frequencies offered, subject to the Minister's right to select otherwise if planning considerations so demanded.

20. The answer put by Mr A. Robertson, counsel for the Minister, was that such an approach to the Act overlooked the importance of a service area. Mr Robertson referred at some length to the 2nd Reading Speech of the Broadcasting and Television Amendment Bill on 15 May 1985. The Minister said, for example:-

"The cornerstone of the service-based concept

for planning and licensing is the service area

for a licence; that is, the area containing

communities which the licensee is authorised

to serve."

Mr Robertson submitted that, unless technical conditions were formulated which would limit a broadcaster to its service area, the effect of the change from AM to FM would be to change the service area of the licence in Wesgo's case, for there would be no limit to the extent to which Wesgo, if successful, would be able to broadcast in the Sydney region. Mr Robertson submitted that the Act made a clear distinction between technical conditions and service area conditions. He submitted that, while the Act dealt with technical conditions, it intended that the limitations upon the service area of a licence would remain. Mr Robertson submitted that what was converted to an FM licence was a commercial broadcasting licence whose service area was specified in the AM licence.

21. These are powerful arguments. However, the Act is clear. The Minister is empowered to invite licensees to tender for two FM licences of which the frequencies and technical conditions are specified by the Minister. The Minister is not able to discriminate amongst licensees by reference to their service area or otherwise. The relevant geographical area is not a particular licensee's service area but the city or town specified, in this case Sydney. Any licensee who meets the qualifications of s.4(16) for the holder of a licence in the particular large city or town is entitled to tender on an equal basis with every other such tenderer for the two licences which are offered. Subject to s.89DAP(2), the successful tenderers are to be determined, not by planning considerations or by service area, but solely by reference to the competitiveness of their bids. The conversion of a licensee from AM to FM will therefore necessarily incorporate the technical conditions specified by the Minister for the FM frequency which is allocated.

22. For these reasons, the Minister's approach, as exemplified in the amendment of 14 February 1990, was in error and an order of review should be granted.

23. I shall direct that, within 14 days, the parties bring in short minutes setting out the form of order proposed and dealing with the costs of the application.