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Thursday, 3 February 1994
Page: 313

Mr PYNE (1.04 p.m.) —In 1990, the Cable News Network offered to provide a free service to heads of state wishing to subscribe. More than 100 governments accepted the offer. During the Gulf War, the New York Times reported that leaders of front-line states like King Hussein of Jordan and Saudi Arabia's King Fahd, as well as more isolated participants such as Margaret Thatcher, relied on CNN to keep up to date as events unfolded. Here in Parliament House things were no different. For the few short months while CNN was piped in from the Department of Prime Minister and Cabinet, people were hooked. A giant video screen dominated the staff dining room and, 10 years after Fraser's communications minister, Tony Staley, established an inquiry into pay TV that recommended its introduction as soon as possible, all the inhabitants of Parliament House finally saw what subscription TV services could offer.

  Pay TV in Australia and its related services have had a sorry history. Indeed, one industry heavyweight has described the government approach as `delay elevated to policy'. By any measure, pay TV policy has been a failure, a failure I wish to discuss today.

  In the past, governments used claims such as shortage of frequencies to justify broadcasting legislation. In reality, commercial and political restraints easily prevented the number of services on offer from approaching the actual technological capacity. The sheer variety and capacity of delivery mechanisms available today have long since made this approach obsolete. Broadcasting policies now need to acknowledge the types of service, not the method of delivery. Advancements in technology have also made the old geographical definitions of media markets obsolete. Satellite footprints do not stop at borders.

  We are already faced with a huge variety of new policy issues when we consider subscription television services as a mere extension of the traditional entertainment oriented free-to-air services we live with. However, they are much more than even that. Today, the fastest growing industry in the world is communications. We are now hearing more and more about the information super highway—the convergence of telephones, computers, television, videos and movies that industry groups are already planning for the next century.

  This is scarcely the easiest area for policy formulation. Conflicting visions of the future are hard to resolve. There is little public interest in the complexities of different kinds of services. The stakes are high and uncertainty flourishes. However, the government has scarcely worked to overcome these difficulties. Since 1987 we have been provided with communications ministers at a rate of more than one per year.

  For too many politicians, pay TV has just meant more programs to watch. Tony Staley was a technological enthusiast. Ministers like Graham Richardson have simply regarded pay TV as a political inevitability. Australians will finally have access to pay TV, because they will soon have it, as Northern Territorians do already, from overseas broadcasters on foreign owned satellites, with scant government regulation and scant opportunity for local profit. In Australia, pay TV has not affected our daily lives and so, despite all the importance it may take on in the future, it has not been given serious thought. Once again, Australia has been lagging behind the rest of the world. It can only be seen as the greatest irony that the introduction of a medium that has such potential to break down barriers has fallen victim to our parochialism, to that odd isolationism that turns up in this country.

  It is difficult to know how to formulate policies for a medium whose nature and importance in the future are so awkward to determine. Our current pay TV policy dates from November 1992 when the government announced that it would legislate for digital pay TV and delay the introduction of satellite delivered pay TV until digital compression technology was available. Earlier that year a Senate select committee reported:

The most difficult issue the committee had to deal with was the question of the transition from using an analogue signal to using a digitally compressed signal for transmission of the subscription television broadcasting system by satellite . . . There was . . . no unanimity from witnesses nor evidence of an agreed time scale for the introduction of digital technology. At the time of the committee's inquiry, it was not operating commercially anywhere in the world. No world standard or agreed specification for digital technology existed.

As I have said, it is awkward to formulate policy about technological change. Experts will disagree on matters of timing. The technology that is immediately available is not often the best. However, in pay TV the theory goes that the first player, not the best technology, will be the big winner.

  Late in January last year the big players, Packer, Murdoch, Time-Warner and the ABC, became aware that Steve Cosser's Australis Media had bought most of the available licences for microwave distribution in Sydney and Melbourne. The November 1992 legislation and accompanying statements had laid down various provisions satellite users must meet, but it left open the possibility of narrowcasting through other means, with minimal regulation. It was clear that Australia would soon be in a position to initiate a lower cost pay TV system more quickly than the proposed satellite system.

  It had been a laborious task to produce the pay TV legislation. When the act was finally passed, it aroused less excitement than might have been expected, as constant policy backflips and reversals had made it clear that cabinet decisions and parliamentary acts did not have the finality in the area that they have in most others. This assessment soon proved correct. Despite all the previous statements to the contrary, the government announced on 28 January that the integrity of pay TV was to be protected by barring the allocation of broadcast pay TV licenses using MDS technology, six weeks after it originally called for license tenders.

  It was questionable whether the minister had the power to act in such a way. Cosser and the other main potential MDS operator, Kerry Stokes, immediately launched legal action. The decision coincided with the election campaign and, for those five weeks, Cosser ran a hard-hitting, and often cheeky, campaign against the government and the minister. In mid-March, the federal court ruled, in the Stokes's case, that the government's termination of the MDS licence tendering process was invalid. In April, documents produced in the Cosser action showed that the Prime Minister (Mr Keating) was warned that legislative amendments would be required to ban the use of MDS technology for pay TV. In May, following further action the Federal Court, on an injunction from Kerry Stokes, ordered the government to complete the MDS license tender process.

  To many, the government's decision was yet another deal to protect its media mates. Something snapped when pay TV policy was pulled in opposite directions by free market oriented bureaucrats and Labor's long tradition of political patronage to media owners. For others, the decision was the result of incompetence and of a failure to consider how line of sight microwave transmissions could offer a quality service in topographically complex areas like metropolitan Sydney.

  The MDS row, while short-lived, was fierce. It seemed to embody all that was wrong with the government's pay TV policy and with the public debate. While the merits of delivery systems have been disputed, too many of the wider issues have gone unnoticed outside the industry. There has been little debate on how we can ensure the commercial viability of infant pay TV services, while still imposing the sorts of regulations that are desirable for services that can hold such an influence on Australian life.

  We have still not yet debated how we can take the opportunities offered by technology to increase media ownership. We have not yet discussed what limits will be suitable to programming, whether in terms of Australian content or community standards. In London last September, while unveiling a spectacular expansion of his Sky TV service, Rupert Murdoch said that advances in telecommunications had freed people from the `once powerful media barons' and spoke of the vast future potential of integrated information and entertainment industries. Of course, it is easy to make that sort of comment when one owns the hardware, when one employs the news gatherers and when one's own private video collection is better known as 20th Century Fox. But Murdoch is right. The government has failed to adequately deal with the implications of pay TV as an entertainment medium. It has barely considered what the convergence of technology might bring in an area that will be vital for the future.

  For the first time since the age of television in Australia, the capacity exists to transform the way power is shared. Instead of consumers watching television gratis, and advertisers seeking their custom through commercials, consumers will have the power to buy what they want to see. For a Liberal, this is something that I support. (Time expired)