Triple a FM Pty Ltd v Australia Broadcasting Tribunal
[1987] FCA 93
•23 FEBRUARY 1987
Re: TRIPLE A FM PTY. LIMITED
And: AUSTRALIAN BROADCASTING TRIBUNAL and ORS.
No. G542 of 1986
Broadcasting and Television
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Sheppard J.
CATCHWORDS
Broadcasting and Television - applications for supplementary FM broadcasting licences by existing operators of two AM stations in Canberra - Broadcasting Tribunal obliged to consider whether it was in the public interest that applications for a licence for an additional commercial broadcasting station should be invited - matters Tribunal entitled to take into account in determining that question - whether Tribunal empowered to deal contemporaneously with two applications - whether Tribunal asked itself the correct question.
Broadcasting and Television Act 1942, ss. 81, 82, 82A, 83.
HEARING
SYDNEY
#DATE 23:2:1987
Counsel for the Applicant: W.H. Nicholas, Q.C. with D. Catterns and R.C. Refshauge
Solicitors for the Applicant: Macphillamy Cummins & Gibson
Solicitor for the First Respondent: R. Orr, Australian Government Solicitors Office.
Counsel for the Second Respondent: J.J. Spigelman, Q.C. with K.V. Taylor
Solicitors for the Second Respondent: Boyd House & Partners
Counsel for the Third Respondent: A. Hewitt
Solicitors for the Third respondent: Stephen Jaques Stone James
ORDER
The application be dismissed.
The applicant pay the respondents' costs thereof.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an application to review the decisions of the Australian Broadcasting Tribunal to grant supplementary broadcasting licences to the second and third respondents. Capital City Broadcasters Pty. Limited and Macquarie Broadcasting Holdings Limited. I shall hereafter refer to these respondents as 2CC and 2CA respectively, those being the station identification signs by which radio stations operated by them in Canberra are known.
It is first necessary to refer to the provisions of the Broadcasting and Television Act 1942 ("the Act") pursuant to which the applications for the supplementary licences were made and the decisions to grant them arrived at. Part IIIB of the Act deals with licences. Sub-section 81(1) provides that, subject to the Act, the Tribunal may grant or renew a licence upon such conditions, and in accordance with such form, as the Tribunal determines. By sub-section 81(2), in determining the conditions upon which, or the form in accordance with which, a licence is to be granted or renewed, the Tribunal shall have due regard to the need for the commercial viability of the broadcasting and television stations in the areas served or to be served in pursuance of the licence. Section 82 provided for the manner in which applications are to be made and for the procedure to be followed thereon. Section 82A deals with applications for supplementary licences. So far as relevant sub-sec. 82A(1) provides that, subject to sub-sec. (3), the holder of a licence for a commercial broadcasting station may lodge with the Minister an application for the grant of a licence for a broadcasting service, being a service for the transmission of programs solely by way of frequency modulation, for the purpose of serving, by means of one broadcasting station and, if necessary, one or more broadcasting translator stations, an area the specification of which is to be determined by the Minister in accordance with sub-sec. (7). Sub-section 82A(3) does not permit an application to be lodged for a supplementary licence by the holder of a licence for a commercial broadcasting station whose programs are transmitted solely by way of frequency modulation. So far as it is relevant, sub-sec. 82A(5) provides that, where an application is lodged for a supplementary broadcasting licence, the Minister may refer the application to the Tribunal or dismiss the application for a reason relating to technical matters or to the planning or development of broadcasting and television services.
Section 83 deals with the consideration of applications by the Tribunal. It applies generally, that is to say, it applies both to applications for licences and supplementary licences. Sub-section 83(1) provides for the holding of an inquiry into the grant of the licence.
Central to the questions which arise for decision in this case are the provisions of para. 83(6)(e) of the Act which as follows:-
"(6) The Tribunal shall not refuse to grant a licence to a person unless it has held an inquiry into the grant of the licence and -
. . . . . . . . . . . . . . . . . . . . . . . .
(e) where the licence is a supplementary licence, the Tribunal, having due regard to the need for the commercial viability of the broadcasting stations and television stations in the area to be served pursuant to the licence, determines -
(i) that an additional commerical
broadcasting station or commercial television station, as the case requires, to serve that area is reasonably likely to be commercially viable during the period in which the licence, if granted, would be in force; and
(ii) that, having considered -
(A) the need for an adequate and comprehensive service to be provided pursuant to the licence for such an additional station; and
(B) whether, in its opinion, there is or would, if the
supplementary licence were
granted, be an undue
concentration of the ownership or control, direct or indirect, of the media in the area to be served pursuant to the
supplementary licence,
it is in the public interest that applications for such a licence should be invited;
. . . . . . . . . . . . . . . . . . . . . . .
Sub-section 83(6A) provides that the reference in para. (6)(e) to the media in the area to be served pursuant to the supplementary licence includes a reference to newspapers, journals and the like available in that area and to broadcasting and television stations licensed to serve that area. Sub-section 83(8) provides that, in considering the need referred to in sub-paragraph (6)(e)(ii), the Tribunal shall have regard only to:-
(a) the nature of the community to be served in pursuance of
the licence;
(b) the diversity of the interests of that community; and
(c) the nature of the broadcasting and television services of
which satisfactory reception is being obtained by that community.
By sub-sec. 83(8A), it is provided that, if the Tribunal makes a determination under para. (6)(e), it shall, as soon as practicable thereafter, inform the applicant and the Minister of the determination and the reasons therefor and make a recommendation in writing to the Minister that he invite applications for a licence for a commercial broadcasting station to serve the area that would have been served in pursuance of the supplementary licence.
2CC and 2CA lodged applications for supplementary licences with the Minister in September 1984. The Minister referred the applications to the Tribunal for inquiry in January 1985. On 27 October 1986 the Tribunal decided to grant supplementary licences to 2CC and 2CA for a period of 5 years. The licences were to be granted on a date determined by the Tribunal after technical specifications applicable to the licences had been finalized by the Minister.
The applicant is one of two companies, each independent of the other, which appeared before the Tribunal and endeavoured to persuade it to make a determination pursuant to para. 83(6)(e). Such a determination would probably have led to the calling by the Minister for applications for a commercial frequency modulation broadcasting licence in the Canberra area from independent companies. The applicant would probably have been an applicant for such a licence in the event that applications for it had been invited. The decision in question has denied it the opportunity of obtaining a licence. It is thus aggrieved by the decision which the Tribunal has made.
I should mention in passing that the other company, Canberra Stereo FM Pty. Limited, was originally an applicant for relief in this Court. However, on 12 January 1987, it discontinued the proceedings.
In the course of the hearing before the Tribunal it was established that 2CA was controlled by a group of companies described in the Tribunal's decision as "the John Fairfax group". The Tribunal found that in Canberra the group controlled 2CA and the Canberra Times which was said to be the only daily newspaper originating in Canberra. The Tribunal also said that a number of national or interstate "media" circulating in Canberra such as the Sydney Morning Herald, the Australian Financial Review, the Sun-Herald, the National Times on Sunday, the Business Review Weekly and the Age were controlled by the Fairfax group. It added that there were other newspapers which were not controlled by the Fairfax group circulating in the Canberra area.
The Tribunal said that radio station 2CC was controlled by a family known as the Albert family which controlled a number of other radio stations in Australia. However, they had no ownership or control of Canberra stations or other media except for 2CC. The Tribunal found that, if 2CC were granted a supplementary licence, there would be some increase in the concentration of control by the Albert family of Canberra media, but that such an increase ought not automatically be regarded as "undue" in terms of the Act. The Tribunal added, that if it were so regarded, the supplementary licence scheme devised by Parliament could be rendered useless, since any supplementary licences would involve at least the degree of concentration of control involved in the holding of two licences in a market.
Of the control found to exist on the part of the Fairfax group, the Tribunal said:-
"2.31 The Fairfax media control is obviously much more widespread in Canberra than the Albert control. There would be an undue
concentration of ownership and control if 2CA were granted a supplementary licence and 2CC were not. So much so that if only one supplementary licence were to be granted, it would almost certainly be granted to 2CC in preference to 2CA. 2CA argued that its talk format would equip it to serve the public better than 2CC in a supplementary combination, because the AM service could specialise more in the news/talk format with the supplementary service concentrating more on music. That is a valid point, but given the words of the Act it would probably be outweighed by the significance of the concentration of control in the service area which would be caused by granting a supplementary licence to 2CA alone".
However, the Tribunal also said:-
"2.32 There would not be an 'undue' concentration of ownership or control if 2CC and 2CA were both to receive supplementary licences in the particular circumstances of Canberra. That is because of the number of other media available and used in Canberra, which has a fairly unique character as the national capital. Apart from commercial radio, the Canberra audience has alternatives in the form of two public radio stations (the second to commence broadcasting shortly), and three ABC radio stations, one of which provides a local service of news and current affairs. There are also the separate television services of CTC-7, with a separate and substantial local news coverage, and the ABC and SBS television stations. The ABC television station provides local news also. The situation varies in the proximity of surrounding areas such as Yass.
. . . . . . . . . . . . . . . . . . . . . . . . . .
2.34 In conclusion, there is a considerable concentration of ownership and control of media in Canberra in the hands of the Fairfax interests. This is not an ideal situation, but if two supplementary licences are granted the level of concentration will not become significantly worse. It would become worse if a supplementary licence were granted to 2CA alone, because it would increase the relative degree of domination which 2CA has in relation to 2CC and other media in Canberra".
The Tribunal referred to the applicant and Canberra Stereo FM Pty. Limited as "the independents". Of the case made by them the Tribunal said:-
"2.35 The independents argued strongly for the advantages of the services which they proposed so far as ownership and control of the media are concerned. They pointed not only to the likelihood that an independent would be separate from the incumbents, but to the likelihood that it would be locally and independently controlled by Canberra business people, as 2CC was when it received its licence in 1975. They pointed out that no commercial broadcasting service in Canberra is at present locally-controlled.
. . . . . . . . . . . . . . . . . . . . . .
2.36 In summary, a likely advantage of the independent option which would continue at least for the immediate future is that it would reduce concentration of ownership and control by allowing an opportunity for a new group of local directors and shareholders to initiate the only local and independent broadcasting station in Canberra. The words 'likely' and 'opportunity' are used because the outcome of an inquiry into an independent licence could not be known until that inquiry had taken place. However, the plans and structures helpfully put forward by the independents in this supplementary licence inquiry show that there are local Canberra groups not dependent on other media who are willing to apply for an independent licence".
The emphasis is that of the Tribunal.
After stating these various matters, the Tribunal went on to consider the public need for an FM service. It concluded that there was need for such a service. It also said:-
"2.45 If there were only one application for a supplementary licence, then the need for another service and the fact that there are independent local companies ready with plans and resources to provide such a service would be great advantages of the independent option. Despite the greater dangers of parallel program formats under the independent option, it would be the option likely to be preferred. However, the Tribunal has two supplementary licence applications before it".
Earlier in its report (para. 2.2) the Tribunal had said that there were 3 main options for new Canberra radio services considered in its report. These were:-
(a) A recommendation to the Minister that he commence the
process which would lead to an inquiry into the granting of an independent licence. In order that this might be done the Tribunal would have needed to make a determination pursuant to para. 83(6)(e) of the Act.
(b) The grant of one supplementary licence either to 2CC or
2CA.
(c) The grant of both the supplementary licence applications.
Eventually the Tribunal came to the question of which of these options it should prefer. In paragraph 2.59 it commenced to consider its ultimate decision under the heading. "The most desirable option". A proper understanding of submissions made on behalf of the applicants in this Court requires all of what is said in the succeeding paragraphs, which conclude with paragraph 2.67, to be taken into account. It is impractical to quote each of these paragraphs, but I refer to what I regard as the essential statements amongst them. These are as follows:-
"2.59 The greatest advantage of an independent licence is that it would be more likely to introduce new blood and competition than would two supplementaries, and that it would be likely to somewhat reduce the concentration of media in Canberra. These advantages, which would be at least indirectly reflected in the quality of the service provided, have been carefully considered because of their importance to the public interest.
2.60 If only one extra licence to serve the public of Canberra were available, the degree of doubt about the viability of the existing stations would not overcome the advantage of creating the opportunity for an independent service. In other words, one extra service would be best provided by an independent, and not a
supplementary. It is recognised that an independent licence is the 'first and preferred option' of the supplementary licence scheme: Parliamentary Debates (vol H. of R. 134) 30 November 1983 p. 3058.
. . . . . . . . . . . . . . . . . . . . . . . .
2.62 In the circumstances of this inquiry the two-supps option is likely better to serve the public interest when all the relevant statutory criteria are considered. Its greatest advantage is that it is likely to offer a greater range and diversity of programs, and more adequate and
comprehensive services than the
independent option. There are two reasons for this. The first is that there would be an extra FM station. The second is that both of the AM-FM combinations could afford to specialise their formats, catering to complementary age-groups and formats, more than any of three
independent competitors could afford to do. This is shown by the proposals outlined in sections 7 and 8 of this report.
. . . . . . . . . . . . . . . . . . . . . . . .
2.64 Whereas refusal of the licence
applications would permanently remove the opportunity for two complementary services, grant of the licences will provide those extra services now, with a statutory requirement for the opportunity for independent services to be considered again in the future".
The submissions made on behalf of the applicant by its counsel were as follows:-
1. At least in the case of 2CA the Tribunal found each of
the matters provided for in para. 83(6)(e). It was bound, as a matter of law to determine that it was in the public interest that applications for an additional licence be invited. Its finding denied it power to grant a licence to 2CA.
In order to deal with the problem found to exist in the
case of 2CA, the Tribunal assumed the success of the 2CC application. Had it not done so, the 2CA application was bound to fail. The Tribunal's process was inextricably to bind each application and its outcome with the other. The assumed success of the applicant in one application was relied upon to defeat the interest of potential applicants for an independent licence.
Having found undue concentration of ownership or control
in 2CA, the Tribunal erred in failing to give due weight to that finding in 2CA's application. Contrary to the purpose and intention of the sub-section, it erred in making a decision, the effect of which was to entrench that concentration.
The Tribunal failed to ask itself the essential question
which arose for decision under para. 83(6)(e). It at no stage asked the question. "Is it in the public interest that applications for an additional independent licence should be invited?" Instead, and in error, it proceeded to undertake an exercise in comparison to determine what type of service or services would better serve the public interest. It was neither a relevant nor a legitimate exercise to ask whether it was in the public interest that two supplementary licences be granted or whether two such licences would be preferable to an independent licence.
I deal with these submissions as follows.
1. Effectively para. 83(6)(e) provides that the Tribunal
shall not refuse to grant a licence unless the conditions provided for in the paragraph are found to exist. In relation to 2CA the Tribunal found that they did exist. There was no contest concerning the question of commercial viability provided for in sub-para. (i). Nor was there any issue concerning the first part of sub-para. (ii) (part (A)) which required the Tribunal to consider the need for an adequate and comprehensive service to be provided pursuant to the licence. The second part of the sub-paragraph (part (B)) required it to consider whether, in its opinion, there was, or would be, if the supplementary licence were granted, an undue concentration of the ownership or control of the media in the area to be served pursuant to the licence. Having considered those matters, it was the Tribunal's obligation to determine whether it was in the public interest that applications for such a licence should be invited. The submission involves the proposition that, if, having considered the two matters mentioned in the sub-paragraph, the Tribunal finds them established, it is bound to invite applications for an independent licence. I am of opinion that the submission should be rejected. There are a number of reasons for this conclusion. They are as follows:-
(a) The opening words of para. 83(6) say that the Tribunal shall not refuse to grant a licence to a person unless it has held an inquiry into the grant of the licence and one of the matters specified in the succeeding paragraphs, of which para. (e) is one, apply. The opening words do not say positively that the Tribunal shall refuse to grant a licence if the matter specified in one or other of the paragraphs is established.
(b) Sub-para. (e)(ii) obliges the Tribunal to consider the two matters specified in parts (A) and (B) of the sub-paragraph, but the ultimate matter to be considered is the public interest. This would suggest that, although the Tribunal must take into account the two matters specified in sub-para.
(ii), they are not the only matters which it is to take into account in making its determination. Broader considerations would seem to be in play.
(c) That that is the intended meaning is made more likely by the fact that other provisions of sub-sec. 83(6) are couched in language which ensures that only the specified matters will be taken into account. Paragraph 83(6)(c), in contrast with the subject paragraph, uses the words, "it appears to the Tribunal, having regard only to the following matters or circumstances that it is advisable in the public interest to refuse to grant the licence to the person ..." The word "only" is absent from the provisions of para. (e) except insofar as it is imported by the provisions of sub-sec. (8). The provisions of that sub-section apply to the matter referred to in part (A) of sub-para. (ii), not that referred to in part (B) thereof.
(d) There is authority which suggests that the construction contended for by counsel for the applicant is an erroneous one. In Television Capricornia Pty. Limited v. The Australian Broadcasting Tribunal (23 December 1986, unreported). Wilcox J., after referring to the decision of the High Court in The Queen v. The Australian Broadcasting Tribunal; ex parte 2HD Pty Limited (1979) 144 CLR 45, said (pp. 16-17):-
"It cannot be said, in relation to the present application, that there is no positive indication of the considerations on which a grant or refusal of consent is to depend. The Tribunal must take into account such of the matters specified in sub-para. (i) to (vi) (of para. 83(6) (da) of the Act) as may be applicable to the case. But the omission of the words 'only' and the terms of para.
(vii) make clear that the Tribunal is not confined to those matters. Subject only to the 'scope and purpose' concept referred to in 2HD, the Tribunal may take into account any other matter which it regards as relevant to the
decision to be made.
The ultimate question for the Tribunal is whether it is
advisable in the public interest to refuse to grant the licence to the applicant. The matters listed in sub-paras. (i) to (vii) are only matters to be considered in reaching a conclusion upon that question".
His Honour was dealing with different provisions of the Act from those in question here, but his words, with which I respectfully agree, are, with one not unimportant difference, as apt for this case as they were for the case before him. The difference concerns sub-para. 83(6) (da) (vii) which expressly empowered the Tribunal to take any other matters or circumstances which the Tribunal considered relevant into account. That provision made the case decided by Wilcox J. a stronger one than the present. Nevertheless, his Honour relied in part upon the absence of the word "only" from the paragraph which he had to consider.
For the reasons I have given, I am of opinion, as I have said, that the first submission should be rejected. Before leaving that submission, I should mention that reference was made by counsel for the applicant to a ministerial statement made to the House of Representatives on 30 November 1983 concerning the implementation of what is described in the statement as "the Supplementary Licence Scheme". Reference was made by all counsel to the second reading speech which explained the provisions of the Broadcasting and Television Amendment Bill 1984 (Hansard, House of Representatives for 3 October 1984, pp. 1498 et seq.) The Bill became the Broadcasting and Television Amendment Act 1984, which was the Act which inserted para. 83(6) (e) in its present form into the Act. All I need say about the statement and the second reading speech is that I have considered them, but nothing in them leads me to conclude that I should adopt a different construction of para. 83(6) (e) of the Act from the one which its words suggest to me that it has.
2.The authorities to which I have referred, particularly the 2HD case, establish that the Tribunal is intended to have wide powers in order to discharge the important public functions it has. In many of its deliberations, including its deliberations here, the public interest is a critical factor to which it must give consideration. It is true that the applications are separate applications and that a separate decision has to be made in respect of each. But two applications were made. Both were referred to the Tribunal by the Minister. There is no express power in the Act which enables the Tribunal to deal with applications jointly. But, so long as it makes a separate determination in respect of each, I see nothing unlawful about it conducting a hearing in which the considerations which apply to each are the subject of evidence and argument. It would be quite unreal to expect the Tribunal to embark on the hearing of one without considering the implications of the other. For it to do so would be for it to shut its eyes to critical and relevant matters which would arise because of the existence of the other application. Furthermore, which application should it have heard first, if it were bound to conduct separate hearings? And would it be appropriate or inappropriate for it to bring in a decision on one application before it had heard the evidence and argument in the other? The Tribunal was bound to deal with matters as they were. The realities involved there being two applications for supplementary licences. It would have been open to the Tribunal to refuse both applications, to grant one or to grant both. It decided to grant the two. Bearing in mind the importance of the public interest for its consideration of the matter, I see nothing unlawful in it having taken into account, in reaching its conclusion, matters which, in its view, were beneficial to the public interest if two licences were granted. It is true to say that it overcame the problem of undue concentration of the ownership or control of the media in the area, which applied in the case of 2CA, by bringing into the scales the dilution of that control which there would be if two licences, rather than one, were granted. In its view such dilution tended to overcome the problem because it meant that the degree of control would be no greater than it is at the moment. That was a decision which it was well within the province of the Tribunal to make. Furthermore, it led to the Canberra community having, not one, but two, FM stations, a matter which it considered was to the public advantage. In these circumstances I am unable to find anything unlawful about the Tribunal's approach to the matter related to its hearing the two applications together and its decision to grant each licence on the basis that, for the reasons it gave, each application complemented the other.
3.This submission is really bound up with the second submission. The contention is that the Tribunal erred in failing to give proper weight to its finding of undue concentration of ownership or control of the media in the 2CA application. But it gave very close consideration to that matter. It is impossible to say that it failed to give due or proper weight to that matter in the 2CA application. It was a matter which concerned it greatly. The matter was only overcome by the consideration that, if two licences were granted, the degree of control would be diluted down to the present degree of control which exists. The submission, therefore, leads one back into the field of the second submission with which I have dealt. I therefore reject the third submission.
4. I think that it is a reasonable conclusion to draw from a reading of the Tribunal's decision as a whole that it nowhere expressly addressed the question which sub-para. 83(6)(e)(ii) raised for determination, namely, whether it was in the public interest that independent applications for a licence should be invited. But a reading of the decision, the essential paragraphs of which I have quoted, persuades me that in substance it did give close consideration to that question. Having done so, it reached the conclusion that it was not in the public interest that applications should be invited. In my opinion, the difficulty about the submission lies in an assumption contained within it that the Tribunal was bound to consider the question raised by para. 83(6)(e), if not as a first matter, then as a completely separate one. But it was only one of the many questions which the Tribunal had to decide in order to reach a conclusion on the ultimate question whether it should grant the licences. The options open to it were, as it stated, to grant one or both applications, or to refuse both. Many of the considerations relevant to the ultimate question were also relevant to the question raised by para. 83(6)(e). Absent that paragraph from the legislation, the matters mentioned in it would have remained critical matters for the Tribunal to consider. They would properly have formed part of its overall consideration of it. Really, the submission now under consideration must fail unless the applicant is entitled to succeed on the first submission. That submission was rejected because I did not find in the words of para. 83(6)(e) the mandatory effect for which counsel for the applicant contended. I refer again to the form of the opening words of the paragraph and the absence of the word "only" from the relevant provisions thereof. The paragraph did not operate to prevent the Tribunal granting the licences if it found the matters specified in it established. On the contrary, it did no more than empower the Tribunal, at its discretion, to refuse the licences, but only if the matters specified in the paragraph were found by the Tribunal to exist. For these reasons, I reject the applicant's fourth submission.
In the result the submissions made on behalf of the applicant are rejected. The application is dismissed with costs.
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