Communications Minister Stephen Conroy has picked a fight with an unlikely opponent: the community radio sector.

The community radio sector is bigger than you think it is. Long seen as the poor cousin of the flashier commercial sector, there are more than 300 community broadcasters scattered around the country, ranging from large, semi-professional outfits in the capital cities to small outback radio stations catering to niche and specialist audiences.

According to an audience survey for the Community Broadcasting Association of Australia by McNair Ingenuity Research, about 4.4 million Australians listen to community radio in an average week. The eight capital cities account for around 2.8 million, but community radio is arguably strongest in the regions, where another 1.6 million non-metro listeners can be found. With tens of thousands of volunteers and a significant role as a training ground for the commercial media, community radio is a significant player in the national mediascape.

But community radio has a digital problem. As Australia’s radio waves slowly digitise, the importance of analogue systems is slowly declining. After a slow start, hampered by Australia’s quixotic choice of the expensive DAB+ protocol, digital radio is finally beginning to gather pace. According to Commercial Radio Australia, digital uptake is beginning to take off. Digital audiences are now around 1.4 million in five state capitals, or 11% of the audience. More than a million digital radios have been sold, and many new cars are now shipping with DAB+ receivers.

Community radio has begun the long-road to digitisation too: 37 of the larger metro community broadcasters — including some of the best-known stations such as Melbourne’s PBS and RRR, Sydney’s FBi, Brisbane’s 4ZZZ, Perth’s RTRFM, and Adelaide’s ThreeD and Radio Adelaide — have been part of a year-long roll-out of digital which sees them take a share of each capital city “multiplex” (a fancy word for a radio transmission).

Unsurprisingly, transmitting digital radio costs money. The community stations are being partly funded by the federal government to pay their share of the multiplex. But the fed is not funding all of the cost, leaving a $1.4 million shortfall. The community broadcasters are contractually obliged to pay the multiplex operators if they want to keep their digital signals on the air.

As a result, the community radio sector has launched a campaign across the 37 affected stations. Community stations are running anti-Conroy advertisements at a high volume. Given the sector’s ability to reach down into niche demographics in an election year, it’s a development that could hardly be welcomed by Labor strategists.

“We put to the government that what would be required would be roughly $3.6 million each year,” explained Adrian Basso, president of the Community Broadcasters Association of Australia. “The budget amount came through as $2.2 million, and we’re still grappling with where that figure came from, because we were quite clear that $3.6 million was required. They’re not inflated figures, they’re actual costs.

“There’s a framework that’s legislated and its quite a complex regime of legislation; it says that we have to lease or partner up with the commercial stations [for digital transmission]. Those costs are then passed on, and it’s not something we can choose to opt in or out of, it’s just a cost they pass on to the community sector.”

“Community radio is the lifeblood of the independent sector, and the artists and labels we represent would be at a loss without it.”

Cassandra Wilkinson, chairwoman of popular Sydney station FBi, backs Basso’s point. She argues the sector could continue to broadcast on analogue, but given the government sets the spectrum rules the community sector is simply asking for the funding necessary to comply with the new digital regulations. “It’s vital for the public access, community-run broadcasters to be on the new digital platform,” she told Crikey. “Independent and local voices need to remain loud and strong in the media if we want a healthy culture and a vibrant democracy.”

Basso says the value of the sector is in its diversity. “We have some quite unique services that no one else caters for, whether its indigenous or radio-print handicapped, there’s youth stations, faith-based stations, there’s a Muslim station in Sydney.”

Community radio’s other big value-add is for the music sector — especially independent musicians, who typically rely on community airplay to get the word out. Nick O’Byrne from the Australian Independent Record Labels Association told Crikey that “commercial radio will never support the development of emerging acts … it will never take a programming risk”.

“Community radio is the lifeblood of the independent sector, and the artists and labels we represent would be at a loss without it,” he said.

But the sector’s pleas have so far fallen on deaf ears. A spokesman for Conroy told Crikey the government had provided $13.5 million over four years from 2009-10 to 2012-13 to establish and provide digital radio services, as well as an ongoing $2.2 million in operational funding to the sector:

“The primary source of funding for community broadcasting, however, has always been and should continue to be drawn from sponsorship and donations from within those communities, independent of government support.

“The government is proud to augment this funding, but it should never be seen as a substitute for independent community-sourced revenue.”

Representatives from the community radio sector tell Crikey they are frustrated by the lack of access to government decision-makers. No one from the Community Broadcasters Association has been able to meet with Conroy for more than two years.