Commercial Broadcasting Licence Allocation Determination 2018

EXPLANATORY STATEMENT

Approved by the Australian Communications and Media Authority

Broadcasting Services Act 1992

Commercial Broadcasting Licence Allocation Determination 2018

Authority

The Australian Communications and Media Authority (the ACMA) has made the Commercial Broadcasting Licence Allocation Determination 2018 (the Determination) under subsection 36(1) of the Broadcasting Services Act 1992 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901 (the AIA).

Subsection 36(1) of the Act provides that the ACMA is to determine in writing a price-based system for allocating commercial television and radio broadcasting licences that are broadcasting services bands licences.

Subsection 33(3) of the AIA relevantly provides that where an Act confers a power to make a legislative instrument, the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Purpose and operation of the Determination

The Determination sets out the procedures to be applied in allocating commercial television and radio broadcasting licences that use the parts of the radio frequency spectrum designated for the primary purpose of broadcasting services, as well as parts of the radio frequency spectrum designated partly for the purpose of digital radio broadcasting services.

The allocation procedures outlined in the Determination describe the necessary application and registration process for parties to become eligible to participate and bid for a licence at auction.  The process includes the submission of required documentation and the payment of application fees, as well as the payment of a deposit or the provision of a deed of financial security.

The licences will be allocated using a Licence Allocation Exercise where participants bid openly against one another – either in person or by telephone. If the bidding for the licence does not reach the reserve price for the licence, the Licence Allocation Exercise for that licence is terminated. If only one person applies for a particular licence, the Determination allows the ACMA to allocate the licence to that person without conducting an auction. The Determination also imposes obligations to be met by the successful applicant in relation to the payment of the balance of the winning amount.

The ACMA has made the Determination because the Commercial Broadcasting Licence Allocation Determination No.1 of 1998 (the 1998 Determination) was due to ‘sunset’ (i.e. be automatically repealed) on 1 April 2018, by operation of Part 6 of the Legislation Act 2003 (the Legislation Act). Following review and consultation, the ACMA formed the view that the 1998 Determination was operating effectively and efficiently, and continued to form a necessary and useful part of the legislative framework. To preserve the effect of the 1998 Determination, the ACMA has revoked the 1998 Determination before its sunset date and remade it with changes as the Determination. The changes update the procedures in line with current ACMA processes.

A provision-by-provision description of the instrument is set out in the notes at Attachment A.

The instrument is a legislative instrument for the purposes of the Legislation Act.

Documents incorporated by reference

The Determination incorporates the following Acts and legislative instrument by reference (including by the adoption of definitions), or otherwise refers to them:

˃     the Acts Interpretation Act 1901;

˃  the Banking Act 1959;

˃  the Broadcasting (Charges) Determination 2017;

˃  the Broadcasting Services Act 1992;

˃  the Commercial Broadcasting (Tax) Act 2017;

˃     the Corporations Act 2001;

˃    the Legislation Act 2003;

˃  the Radiocommunications Act 1992.

The Acts and legislative instrument listed above may be obtained from the Federal Register of Legislation (http://www.legislation.gov.au).  The Acts are incorporated as in force, from time to time, in accordance with section 10 with the Acts Interpretation Act 1901 and subsection 13(1) of the Legislation Act.  The legislative instrument listed above is incorporated as in force, from time to time, in accordance with section 5 of this Determination and subsection 14(1) of the Legislation Act.

Consultation

Before the Determination was made, the ACMA was satisfied that consultation was undertaken to the extent appropriate and reasonably practicable, in accordance with section 17 of the Legislation Act. 

A draft version of the Determination was released for public consultation on 13 February 2018 on the ACMA website. On the same day the ACMA emailed the draft Determination to key industry stakeholders: Commercial Radio Australia; Free TV Australia; the Australian Subscription Television and Radio Association; the ABC and SBS. Consultation closed on 2 March 2018. No submissions were received.

Regulatory impact assessment

A preliminary assessment of the proposal to make the Determination was conducted by the Office of Best Practice Regulation (OBPR), based on information provided by the ACMA, for the purposes of determining whether a Regulation Impact Statement would be required. OBPR advised that a Regulation Impact Statement would not be required because the instrument was minor or machinery in nature (OBPR reference number 22721).

Statement of compatibility with human rights

Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires the rule-maker in relation to a legislative instrument to which section 42 (disallowance) of the Legislation Act applies to cause a statement of compatibility to be prepared in respect of that legislative instrument. 

The statement of compatibility set out below has been prepared to meet that requirement.

Overview of the instrument

The Determination sets out a price-based system for allocating commercial television and radio broadcasting licences that are broadcasting services bands licences. The Determination affects those seeking to acquire such a licence. It outlines the process that will be undertaken in allocating those licences.

Human rights implications

The ACMA has assessed whether the Determination is compatible with human rights, being the rights and freedoms recognised or declared by the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 as they apply to Australia.

Having considered the likely impact of the Determination and the nature of the applicable rights and freedoms, the ACMA has formed the view that the Determination does not engage any of those rights or freedoms. 

Conclusion

The Determination is compatible with human rights as it does not raise any human rights issues.

Attachment A

Notes to the Commercial Broadcasting Licence Allocation Determination 2018

Part 1–Preliminary

Section 1 Name

This section provides for the Determination to be cited as the Commercial Broadcasting Licence Allocation Determination 2018.

Section 2 Commencement

This section provides for the Determination to commence at the start of the day after it is registered on the Federal Register of Legislation. 

Section 3 Authority

This section identifies the provision of the Act that authorises the making of the Determination, namely subsection 36(1) of the Broadcasting Services Act 1992 (the Act).

Section 4 Repeal of the Commercial Broadcasting Licence Allocation Determination No.1 of 1998

This section provides that the Commercial Broadcasting Licence Allocation Determination No.1 of 1998 [Registration No. F2008B00073] is repealed.

Section 5 Definitions

This section defines a number of key terms used throughout the Determination. A number of other expressions used in the Determination are defined in the Act.

Section 6 References to other instruments

This section provides that in the Determination, unless the contrary intention appears, a reference to any other legislative instrument is a reference to that other legislative instrument as in force from time to time.

Legislative instruments can be accessed, free of charge, on the Federal Register of Legislation (www.legislation.gov.au).  

Part 2–Preparing for allocation

Section 7 Forms

This section provides for the ACMA to approve the forms and deeds to be used by applicants for the purposes of the Determination. The ACMA may approve a Form of Application, a Deed of Acknowledgement, a Form of Authority and a Form of Indemnity and Guarantee. A description of what these forms will contain, once completed by the applicant, is outlined in this section.

Section 8 Application fee

This section states that the application fee for considering an application under the Determination is the charge fixed by Broadcasting (Charges) Determination 2017, as in force from time to time.

Section 9 Application fee not refundable

This section states that the application fee, to be paid under the Determination as part of the application requirements, will not be refunded to an applicant or bidder under any circumstances.

Section 10 Amount of deposit or deed of financial security required

This section requires the ACMA to set the deposit amount to be paid by applicants as part of the application process.

A deed of financial security given to the ACMA in support of an application must be executed by an Australian-owned authorised deposit-taking institution within the meaning of the Banking Act 1959 which is a bank. If a deed of financial security is executed by a person acting under a power of attorney for a body corporate, the applicant must give the ACMA a copy of the power of attorney with the deed.

If a deed of financial security is given to the ACMA by email or fax, the original document must also be received by the ACMA within 3 business days after the deadline, or at a later time as agreed to by the ACMA, for the deed to be considered to have been given to the ACMA.

Under this section, an applicant is considered to have withdrawn its application if the ACMA is not satisfied that the person executing a deed of financial security is an Australian-owned authorised deposit-taking institution within the meaning of the Banking Act 1959 which is a bank. The ACMA must tell the applicant of this decision.

Section 11 Reserve price

This section requires the ACMA to set, in writing, the reserve price for a licence, at or prior to the closing date and time for applications for the licence.

This section also includes a note stating that the reserve price becomes the total price of the licence in circumstances where there is only one registered applicant for a licence at the time when applications close (see Part 5).

Section 12 Payment of amounts

This section prescribes the manner in which payments must be made under the Determination to the ACMA.

Amounts can be paid to the ACMA by bank cheque or by electronic transfer and must be made in Australian currency.

Where a person pays an amount by bank cheque, the payment must be made by the deadline specified in, or set in accordance with, the Determination.

Where electronic transfer is used to make a payment, the ACMA must receive from the person making the payment evidence (such as a transfer receipt) that an electronic transfer has been made for the full amount. A person will be taken to have made a payment by the specified or set deadline, provided the ACMA receives the full amount in the ACMA’s nominated bank account within 3 business days of the deadline and the person gives the ACMA evidence that the transfer was made on or before the deadline. Where full payment is not received within 3 business days of the deadline, the payment will only be taken to have been made if the person making the payment can show that it has taken all reasonable steps to ensure that the amount was paid by the due date.

This section also provides that a payment will not be considered to have been paid in full where bank charges or government duties imposed on the payment reduce the amount to less than the amount due. It is in the interests of the person making the payment to ensure that any bank charges or government duties imposed on a payment do not reduce the payment received by the ACMA to less than the full amount due.

Any amount to be paid under the Determination that is not an amount in whole dollars is to be rounded up to the next dollar.

Part 3–Registering for an allocation

Section 13 Applications

This section sets out how prospective applicants can register for a licence allocation. It states that more than one licence can be applied for but that a separate application needs to be lodged for each licence.

Applicants must complete and submit to the ACMA the forms that the ACMA has approved for use under the Determination (see section 7). Forms that may need to be submitted include the Form of Application, the Deed of Acknowledgment, the Form of Indemnity and Guarantee and the Form of Authority.

Applicants must also pay the application fee as outlined in the advertisement for applications for the licence (the notice issued under subsection 38(1) of the Act). Applicants must also pay the deposit or submit a deed of financial security for the amount specified by the ACMA (see section 10).

This section also allows any information or documents submitted as part of the application process to be updated at any time prior to the closing time and date for applications.

Section 14 Applicants to notify ACMA if application information incorrect

This section requires an applicant to provide the ACMA with correct information if it becomes aware that information in its application has changed or is incorrect. 

Section 15 Registration of applicants

This section states that the ACMA must register an applicant and allocate a unique registration number if the ACMA has accepted the applicant’s application under subsection 13(2).

Part 4–Allocation of licence is there is more than one registered applicant

Section 16 Application of this Part

This section states that Part 4 applies where there are two or more registered applicants for a licence at the closing date and time for applications.

Section 17 Licence Allocation Exercise to be conducted

This section states that the ACMA must conduct a Licence Allocation Exercise unless all but one of the registered applicants withdraw before the Licence Allocation Exercise starts (see section 20) or unless the ACMA terminates the proposed allocation of a licence (under section 36). This section also allows the ACMA to conduct two or more Licence Allocation Exercises on the same day.

This section requires the ACMA to give each registered applicant for the licence at least 10 days’ notice of the conduct of a Licence Allocation Exercise. The ACMA must specify the date, time and place of the Licence Allocation Exercise and may include any other relevant information. The ACMA must also notify all registered applicants if the time, date or place of the Licence Allocation Exercise changes. This second notice does not need to be 10 days before the day of the Licence Allocation Exercise. If the ACMA changes the time of the Licence Allocation Exercise on the day, it must publicly announce the new time at the place where the Exercise is to be held.

This section allows an applicant to withdraw its application for a licence at any time before the start of the Licence Allocation Exercise; however, it must inform the ACMA of this in writing.  An applicant who has withdrawn its application will not be re-admitted to the allocation process.

The ACMA must refund any deposit amount paid by an applicant under section 13 or in accordance with section 10 unless the ACMA decides to retain the deposit or enforce a deed of financial security under section 43.

This section states that Part 5 of the Determination (allocation of licence if there is only one registered applicant) applies in the situation where there had been two or more applications for a licence but before the start of the Licence Allocation Exercise, all but one of the applications had been withdrawn. In this situation, Part 5 is to be applied as if the remaining registered applicant had only ever been the only applicant for the licence.

This sections states that only registered applicants or authorised agents of registered applicants can bid for a licence at a Licence Allocation Exercise. They must have a bidding number issued by the ACMA and must produce evidence of their identity on the day of the Licence Allocation Exercise. The ACMA may take a copy of the identification for its records.

This section describes the bidding process for the Licence Allocation Exercise. In particular, the person conducting the Exercise can start the bidding at any amount that they think is appropriate. They also have the authority to settle a dispute that arises concerning a bid, a person’s entitlement to bid, or the conduct of the Licence Allocation Exercise. The person conducting the Exercise can then continue with the Licence Allocation Exercise, terminate the Exercise or re-start the bidding at an amount they think is appropriate.

This section also states that if the bidding for the licence does not reach the reserve price for the licence, as set by the ACMA, then the Licence Allocation Exercise for that licence is terminated and the ACMA is not obliged to continue the allocation of the licence as it had advertised.

This section provides that the ACMA may allow bidding by telephone at a Licence Allocation Exercise. Registered applicants who wish to bid by telephone must advise the ACMA in writing no later than five business days before the start of the Licence Allocation Exercise. The ACMA will issue registered applicants who wish to bid by telephone a password and identification number, which must be provided to the ACMA immediately before the start of the auction, to verify the applicant’s identity.

This section requires the ACMA to give a notice to the successful applicant (the applicant who has bid the highest amount for a licence which is a least the reserve price) setting out the amount owed (the winning price less the amount of any deposit paid by the applicant) and when it must be paid.

Section 25 Payment of balance of winning price

This section requires the successful applicant to pay the winning price for the licence by the date set by the ACMA under section 24.

Section 26 Balance of winning price not paid

This section states that if the successful applicant does not pay the amount owed by the due date, it will no longer be the successful applicant for the licence. However, this section also permits the ACMA to extend the due date for payment, allowing the applicant to remain the successful applicant for that extended period. The ACMA can only extend the due date for payment if it has not re-offered the licence for allocation under subsection 38(2).

Section 27 Allocation of licence

This section requires the ACMA to allocate the licence to the successful applicant as soon as is reasonably practicable after the successful applicant has paid the full amount of the winning price – unless the ACMA has terminated the proposed allocation of the licence under section 36.

This section also includes a note regarding the tax payable on a transmitter licence which is used in connection with a commercial broadcasting service.

Section 28 Refunds to unsuccessful applicants and withdrawn applicants

This section requires the ACMA to refund any deposit made by an unsuccessful applicant, or a withdrawn applicant, within a maximum period of 6 months after the Licence Allocation Exercise, unless the ACMA has decided to retain the deposit under section 43.

Part 5–Allocation of licence if there is only one registered applicant

This section states that Part 5 of the Determination applies when there is only one registered applicant for the licence at the closing date and time for applications for the licence.

Section 30 Withdrawal of application

This section states that when there is only one applicant for the licence, that applicant can withdraw its application at any time before the deadline set by the ACMA under paragraph 31(d).

This section requires the ACMA to give a notice to the successful applicant outlining the amount to be paid for the licence (the reserve price minus any deposit paid) and when the amount must be paid. The notice must also state the last day when the applicant may withdraw its application for the licence.

Section 32 Payment of the balance of the reserve price

This section requires the successful applicant to pay the amount for the licence (the reserve price minus any deposit paid) if the applicant has not withdrawn its application by the date set out in the notice issued by the ACMA under section 31.

Section 33 Reserve price not paid

This section states that the successful applicant will no longer be the successful applicant for the licence if it does not comply with section 32 and pay the amount for the licence by the due date (as outlined in the notice issued under section 31).

This section allows the ACMA to extend the time required for the successful applicant to pay the amount for the licence – as long as the ACMA has not re-offered the licence for allocation under subsection 38(4). If the ACMA extends the time for compliance, the applicant will remain the successful applicant for that extended period of time.

Section 34 Allocation of licence

This section requires the ACMA to allocate the licence to the successful applicant as soon as reasonably practicable after the successful applicant has paid the amount for the licence under section 32.

This section also includes a note regarding the tax payable on a transmitter licence which is used in connection with a commercial broadcasting service.

Part 6—Miscellaneous

This section allows the ACMA to obtain information and documents from applicants and authorised agents relevant to the responsibilities of the ACMA under the Determination. The ACMA may provide a written notice to the relevant party specifying the information and documents required and when and how they are to be submitted.

This section includes a note that if the request for information and/or documents outlined in the written notice is not complied with, the ACMA may retain the deposit or enforce the deed of financial security of the applicant under section 43.

Section 36 Termination of proposed allocation of a licence

This section allows the ACMA to terminate an advertised allocation under the Determination at any time before a licence is issued.

Section 37 Refund of deposit, reserve price and winning price

This sections requires the ACMA to refund any deposit or any amount paid for a licence if the ACMA terminates an allocation.

Section 38 New Licence Allocation Exercise and re-offer of licence

This section describes the circumstances that allow the ACMA to re-offer a licence for allocation or hold a new Licence Allocation Exercise. It also describes the requirements for the re-offer of a licence for allocation or the new Licence Allocation Exercise.

Section 39 Extension of time

This section allows the ACMA to extend the period of time in which an applicant is required to do any thing under the Determination, whether or not the period of time has expired.

This section also specifies that if the day when any thing is required to be done under the Determination is not a business day, then it should be done by the next business day following the due day.

Section 40 Notices

This section requires the ACMA to provide notices to applicants in writing. Notices may be given by fax or email. When the ACMA provides the written notice to the contact person specified in the applicant’s Form of Application, it will be taken that the notice has been received by the applicant.

Section 41 Lodgement

This section requires the ACMA to specify in writing, the place where, and the manner in which, a form must by lodged. The ACMA may specify this information either in a written notice or other material provided to a person.

Section 42 Liability of person for failure to comply

This section states that the Determination does not affect the right of the ACMA to recover damages should a successful applicant not pay the amount for the licence.

Section 43 Retention of deposit or enforcement of deed for breach of procedures

This section sets out the action that the ACMA may take for a breach of certain provisions of the Determination. The ACMA may, on behalf of the Commonwealth, retain a deposit paid, or enforce a deed of financial security given by an applicant, where it is satisfied that an applicant, or a related person, breached a provision of the Determination, and that the breach affected or could have affected the outcome of the allocation process.

The ACMA may also retain the deposit or enforce the deed of financial security if a successful applicant fails to pay the balance of the winning price as required under section 25 or fails to pay the balance of the reserve price as required under section 32.

The ACMA may also retain a deposit or enforce a deed of financial security if an applicant or authorised agent fails to comply with a notice given under section 35.

The ACMA must notify the applicant, in writing, of a decision under this section and the nature of the breach or failure, before the later of:

Any amount retained or obtained by the ACMA under this section is forfeited to the Commonwealth unless the Federal Court orders its return under section 45.

Section 44 Effect of retention on successful applicants

If the ACMA makes a decision under section 43 to retain a deposit or enforce a deed of financial security, the ACMA cannot allocate the relevant licence to that applicant.

Section 45 Application to Federal Court for return of retained amount

This section provides that, where an applicant is notified by the ACMA of its decision to retain a deposit or enforce a deed of financial security, the applicant may, within one year of receiving the notice, apply to the Federal Court for return of all or part of a deposit or an amount secured by a deed of financial security.

On application, the Court may:

This section does not enable the Federal Court to order that a commercial broadcasting licence be issued to an applicant. This section also does not remove any existing jurisdiction of a court.

Section 46 Liability of ACMA and the Commonwealth

This section provides that neither the ACMA nor the Commonwealth is liable to pay damages or costs arising from any act or omission of any person in relation to the allocation procedures set out in the Determination.

Section 47 Other rights not affected

This section provides that the Determination does not limit any right of action or remedy that the ACMA or the Commonwealth has against any person. For example, it does not limit any right of action or remedy the ACMA or the Commonwealth may have in relation to a deed of acknowledgment, deed of financial security, or form of indemnity and guarantee given under the Determination, or to enforce any licence condition of a licence issued pursuant to the Determination.