The government has given a thumbs down to the community TV sector's bid to take over an SBS channel rather than go off air.
The community TV sector has been left reeling by Communication Minister Malcolm Turnbull's decision to strip it of access to Australia's sixth TV channel at the end of 2015.
The government will sell the spectrum used by Australia's five community TV stations for an estimated $200 million, based on the most recent sale of 700MHz spectrum to Telstra and Optus.
Richard McLelland, the secretary of the Australian Community Television Alliance and general manager of Melbourne community TV station Channel 31, is pushing for community stations to be able to broadcast on the SBS channel 31 rather than go online-only in 2016.
"Maybe he's pulled the wrong rein," he said of Turnbull. "We're all fallible, even politicians."
He estimates the five community stations in Melbourne, Sydney, Brisbane, Adelaide and Perth have a combined revenue of $7.5 million.
A spokesman for Turnbull said the government did not support the community TV sector taking over an SBS channel. SBS declined to comment beyond saying the "policy decision on community television is a matter for the government."
Harold Mitchell, the former media buyer who is chairman of Sydney community station TVS, has made a last-ditch lobbying effort to change the government's mind.
He told Fairfax Media: "It is not clear community broadcasters are losing the spectrum. The bureacrats have wanted to take it away for more than a decade. This is an old position from some officials."
"When Helen Coonan was Communications Minister she fought hard to underscore community TV and I am sure the current minister [Malcolm Turnbull] sees its place as a very important part of Australian communities."
Mr Mitchell described TVS, which is based at the University of Western Sydney, as a "great centre of learning and teaching of television."
The spectrum will initially be used by major free-to-air networks to test the new MPEG 4 technology standard, then the government is widely expected to sell the broadcast spectrum.
Telecommunications companies are most likely to bid, delivering the government a second digital "dividend". The former Labor government raised almost $2 billion from its last spectrum sale, with two lots of 15 MHz left over.
