Community radio has lost another round in the battle to enter the digital world, thanks to communications minister Stephen Conroy refusing permission for government funding to be used in a bid for more spectrum.

Later today, excess capacity on the digital radio infrastructure shared by commercial and community digital radio goes up for auction, but community broadcasters will not be able to participate due to lack of funds.

Over the past few days, the Community Broadcasting Association of Australia has been engaged in a last-ditch attempt to get permission to use about $500,000 of $11.2 million in federal government funding to enable it to take part in the auctions, but Conroy’s office has refused permission for the funding to be repurposed.

The refusal comes only weeks after Conroy made much of his moves to rescue community television services from being “marooned” on analogue signals, by making vacant digital spectrum available.

Radio is not so lucky. The inability to bid at auction means that community radio in Perth and Adelaide will be effectively prevented from taking advantage of the benefits of digital radio at least until the situation is reviewed in 2013.

The bit rates available to six community stations in Adelaide and seven in Perth will be adequate only for basic voice services and not for the additional data services that are the chief advantages of the digital platform.

Five community radio stations  in Melbourne are in only a slightly better position, and are also likely to be limited in the services they can provide.

The funding sought by the sector would not have been enough to buy all the spectrum, but would have given community radio a chance to improve its position to the industry accepted standard of 64kbps per service in at least some cities.

As it is, In Perth, seven community radio stations are presently to receive a bit rate allocation of only 36 kbps each — effectively limiting them to a low quality signal suitable for voice broadcasts only. In Adelaide, the situation is only slightly better, with six community stations presently having an individual bit-rate allocation of only 42kbps. In Melbourne, five community digital radio licensees will receive an allocation of only 51kpbs each.

Yet other community broadcasters in Sydney, Brisbane and Melbourne will have access to 64kbps or more.

Conroy’s office did not return a call asking for comment before deadline today.