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Legislative Assembly for the ACT: 2002 Week 7 Hansard (5 June) . . Page.. 1954 ..

MR HARGREAVES (continuing):

An economic analysis of this comparison indicates that the Canberra licence area is a licence area which, despite submissions opposing a new commercial licence in respect of the Canberra licence area plan, is much more capable of supporting an additional commercial FM service than the Gosford licence area. However, the ABA decided not to plan for an additional commercial FM licence in Canberra, yet issued an additional licence in the Gosford licence area.

Furthermore, the decision not to issue any new FM commercial licences in Canberra is not consistent with decisions over the past two years to issue two new FM commercial licences in each of Townsville, Cairns, Mackay and Rockhampton/Gladstone. In fact, Canberra and Newcastle are the only two major regional markets not to be granted new commercial licences.

Mr Speaker, I find it hard to believe that the Canberra market could not support an additional FM commercial licence. We have a strong economy, high household incomes and decent levels of population growth. The existing operators in the Canberra FM market-Austereo Pty Ltd (Austereo) and Australian Radio Network Pty Ltd (ARN)-are in a sound position to withstand competition, given their extraordinary financial performance over many years.

Austereo and ARN now dominate the local radio scene. The two companies earn around 30 per cent of the total profits generated by all of the commercial licences in Australia. They enjoy financial success that I understand is unprecedented in the commercial radio industry. I can see no reason to continue to protect them against competition. They are better able to withstand new competition now than any other sector of the commercial radio industry at any other time in its history.

According to its own website, Austereo is the largest radio broadcaster in Australia. In fact, they claim to be the largest radio broadcaster in the world outside America. The company operates radio stations in all mainland Australian capital cities and the major regional city of Newcastle. FM commercial stations in all capital cities have had exceptionally strong growth with revenues and profits for many years. For example, over the past five years, revenues have grown by 26.5 per cent and profits have grown by a fantastic 106.5 per cent. There are not many other mature industries in the Australian economy that have grown so fast.

Chairman of the ABA, Professor David Flint, at the recent auction of the new Gosford licence, said:

The ABA is very pleased with the result of today's auction It indicates how commercially valuable the FM band is. The level of bidding demonstrates a real depth of interest in the market and shows that the radio frequency spectrum is a public asset of great worth. When this new service goes to air, it will add to the diversity of radio services for listeners in the Gosford market.

There is no indication of a slowdown or turnaround in this remarkable profitability; in fact, quite the contrary. The total amount of advertising revenue has more than quadrupled over the past 20 years. In these circumstances, the revenues and profits of the

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