Labor has called on the Federal Government to urgently rewrite its digital television rules after lack of interest forced the cancellation of the datacasting spectrum auction.
The government has defended its datacasting rules against industry criticism that they were too restrictive. Prime Minister John Howard brushed off suggestions that the cancellation of the datacasting spectrum auction had knocked another hole in the Budget.
An earlier auction for third-generation mobile phone spectrum reaped just $1.17 billion, leaving the total proceeds from spectrum sales this year at least $1.3 billion less than expected.
Communications Minister Senator Richard Alston announced last night the auction, scheduled for May 21, would not go ahead because there were too few bidders to make it viable.
News Ltd snubbed the auction from the start and rival Fairfax was one of four bidders to pull out mid-way through the process.
Telstra's withdrawal just before Easter left just three companies in the race and Senator Alston said the lack of competition meant financial returns would not be maximised.
Only one bidder, ntl, was interested in licences in all eight metropolitan areas, with Gresham Partners' subsidiary Barwix and Perth-based Australian Datacasting Corporation only interested in smaller chunks.
Senator Alston said he had considered submissions from the bidders, including arguments that the public interest was best served by an early roll out of datacasting services.