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Tuesday, 25 March 2003
Page: 10109


Senator MURPHY (5:31 PM) —The Broadcasting Services Amendment (Media Ownership) Bill 2002 is a very important piece of legislation. The purpose of the bill is to amend the Broadcasting Services Act to remove controls on foreign ownership of television—both for free-to-air and pay TV—and newspapers, to provide for exemptions to the cross-media rules in certain circumstances and, with some of the suggested changes, to try and maintain media services, particularly newspapers and radio in rural or regional areas, by applying a two-out-of-three ownership requirement. The current cross-media ownership rules are governed by both the Broadcasting Services Act and the Foreign Acquisitions and Takeovers Act. I will take a few moments to quote from the objects of the Broadcasting Services Act, which are under section 3. Section 3(1) says:

(a) To promote the availability to audiences throughout Australia of a diverse range of radio and television services offering entertainment, education and information; and

(aa) to promote the availability to audiences and users throughout Australia of a diverse range of datacasting services; and

(b) to provide a regulatory environment that will facilitate the development of a broadcasting industry in Australia that is efficient, competitive and responsive to audience needs; and

(c) to encourage diversity in control of the more influential broadcasting services; and

(d) to ensure that Australians have effective control of the more influential broadcasting services; and

(e) to promote the role of broadcasting services in developing and reflecting a sense of Australian identity, character and cultural diversity; and

(f) to promote the provision of high quality and innovative programming by providers of broadcasting services ...

It goes on to say:

(g) to encourage providers of commercial and community broadcasting services to be responsive to the need for a fair and accurate coverage of matters of public interest and for an appropriate coverage of matters of local significance; and

(h) to encourage providers of broadcasting services to respect community standards in the provision of program material; and

(i) to encourage the provision of means for addressing complaints about broadcasting services ...

I have serious concerns that the bill, if allowed to pass in its current form, along with some amendments that the government has proposed, would not in any respect seek to achieve the objects as set out in the Broadcasting Services Act. We have to very seriously consider what we are proposing to do with regard to this piece of legislation. The potential for a further significant concentration of media ownership in this country worries me deeply. I am not going to entertain that proposition. I believe in what the Broadcasting Services Act says and I believe that we can change the media governing rules, in terms of the cross-media rules of this particular act, to the extent that it will allow some flexibility for existing players in the field and, indeed, encourage new players to come into the game without allowing a significant concentration.

I also have grave concerns about the Trade Practices Act and its application in respect of not only cross-media or media ownership but also its general application. I make it quite clear here and now that the Trade Practices Act, particularly sections 46, 50 and 4, has to be addressed. I am not saying that those sections have to be addressed within this bill, but the government must put down a program for addressing these issues. If and when—maybe it is just `if' at this point in time—this bill does proceed in a way that members of the Senate can agree upon then the operational date for the bill, from my point of view at least, will be governed by the government's action with respect to the Trade Practices Act in particular.

One of the issues that I have concerns about is that, if we see a further concentration of ownership, we stand to lose diversity, services, jobs and plurality of ownership, which really goes without saying. I have had some discussions with the government, which I am grateful for, about some of the concerns I have had. We are continuing to discuss those, but I make it very clear that they are very serious concerns. I have pursued the issue of what constitutes a platform or a medium within media with regard to pay TV because I believe pay TV should be included in the mix and that, rather than having three mediums of media delivery in this country, we in fact have four.

I will go briefly to the pay TV issue and why I have the view that it ought to be included in the mix. The penetration rate of pay TV within the Australian market currently stands at about 21 per cent. It generates about $1.2 billion in revenue. If we look at what has happened elsewhere in the world with the growth in pay television and its capacity to have influence within the media market, we see that in the UK it is around 41 per cent. It is estimated that it will be about 42½ per cent by the end of this year and that it will grow to 55 per cent during the course of the next 10 years. There is regulation of pay TV in the UK and it falls under the Office of Fair Trading.

But I believe that here, because of the circumstances particularly as to the players involved, we have to look at how we can manage a program where we will just not see one of the two major players now in the media game in this country. We know that News, through Murdoch, is essentially the biggest news media player in the world. I do not see why we need, in what is a relatively small market in Australia, to give Rupert Murdoch and News an even greater say. If there were a public interest in doing that, yes you would consider it. But there is the fundamental question: what is the public interest in allowing that to happen? Nobody has yet told me what that public interest is. I believe there is a public interest in looking at the current media laws with a view to changing them to actually seek out the objectives of the Broadcasting Services Act. We have had some discussion about how that might occur. I have the view that pay TV should be included in the mix. I also have a view as to the minimum number of commercial voices. If you take account of including pay TV in the mix and if you then have a regulation that says no single media owner could own more than two of four mediums, there would be six minimum commercial voices in the marketplace. That would exclude a newspaper that would fall outside the Broadcasting Services Act definition of a newspaper.

Radio and smaller newspapers are of particular importance to regional areas of this country. We have the concentration rules that remain in place essentially as they are, even if you pass the bill as it currently stands— that is, there will continue to be a requirement for there to be three separately owned TV networks. But that does not mean that you will continue to have three TV networks, because in the world of competition, as has been the UK experience, if some TV networks get significantly stronger than others, the others wither and die; the question of ownership becomes irrelevant. So it is important, as I said at the outset, that whatever we do here is right. Pay TV is particularly important because we know that News owns essentially the only pay TV channel in Australia.

What is also very worrying is the issue that goes to third party access to the platform, because we have Telstra and Foxtel involved and there is a serious question of whether or not Telstra ought to be involved in that deal at all. I have heard people say that it is too difficult to unscramble the eggs now—maybe, maybe not. We have the Australian Competition and Consumer Commission actually looking at some of these issues, yet we are not aware of what they might be suggesting. That also worries me a little bit because we may be in a process of putting down laws that could in some part be redundant when we get a report from the ACCC.

If you look at the potential influence that can have, being in a position of control, particularly when it comes to bidding for sports programs and movies et cetera, is an important part of competition in this game. It is important that, if we are to have three television networks, we at least try to ensure that they can compete somewhat equally for these things and that one or two do not end up with a significant advantage over the third. I think they are fundamentally important points.

Pay TV in Canada is interesting from the point of view of competition. No matter what we do with these cross-media ownership rules, the market remains the same. There will not necessarily be more advertising dollars with pay TV. We are not going to increase the market. The market remains the same. When we are talking about new entrants, we have to look at all these things such as the capacity of one player versus another being in a much stronger position and the issue of anticompetitive behaviour. Canada is interesting because in part it tells the story of the effect of pay TV on competition. In 1992, the viewership of conventional free-to-air TV in Canada was 65 per cent, and it fell to 50 per cent by 2001 with the advent of pay TV. It is clear that it experienced change. It is obvious that when you change viewership from free-to-air TV that will affect the capacity to attract advertising. We need to move very cautiously in this area.

I have also pursued the issue of the public interest test. I noted with interest Senator Eggleston's comments with respect to the majority committee findings and views that he expressed in his speech. If you look at the situation that currently applies under the Trade Practices Act and under the Broadcasting Services Act in respect of markets, and the application of the definition of a market that is applied by the ACCC—I hope I do not misrepresent what they are saying— the ACCC view radio, television and newspaper markets as separate markets for the purposes of competition. They indicated to the committee—I think Senator Eggleston chairs that committee—that, if you remove the cross-media ownership rules, that may not stop greater concentration of media assets. The fact that the public regulator is raising concern in that way is something that needs to be noted.

What is the public interest if we allow News, Murdoch or Packer to consolidate significant assets in Australia? Where is the public interest in that? It is difficult for me to see it. But I think there is a public interest in the changing nature of media delivery, in the technology associated with media, in the laws that govern it and in the new laws that will enable the delivery of better services, more services and more diverse services. That is important from the point of view of the public and I think this is a very important piece of public policy legislation. I will continue to try and work through the issues. I believe that it may be possible to get to a point where agreement can be reached in regard to legislation that will work towards the objectives of the Broadcasting Services Act.

Of fundamental importance are the two points with regard to the Trade Practices Act and what constitutes a media form. I have a very strong view at this point in time that pay TV is a player in the game. I understand the points that have been made to me with regard to the influence of pay TV but, if you look at what has happened in other countries, you will see that they do have an influence. I understand that with regard to news, which I suppose is the opinion-forming aspect of a media service provider, they often purchase their news programming from elsewhere. That is fine but, at the end of the day, they can still have an influence and they do not have to buy their news from anyone they do not particularly like. Insofar as this bill is concerned, we are a long way from reaching agreement but that is not to say that agreement cannot be reached. I hope that, if we do have a bill to debate in this parliament, it is one that will deliver the sorts of outcomes that I believe are in the public interest and in the interest of media consumers in this country.