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Tuesday, 20 June 2006
Page: 92


Mr TANNER (7:23 PM) —The Broadcasting Services Amendment (Subscription Television Drama and Community Broadcasting Licences) Bill 2006 before the parliament has Labor’s support. It deals with a couple of ultimately relatively minor but noteworthy changes to the broadcasting services legislation. One change slightly broadens the obligations that are imposed on pay TV with respect to Australian content and the other enables a more flexible transfer of community radio licences, as governed by the Australian Communications and Media Authority. Both of these are worthy changes. They are really issues of detail relevant to people in the sector and Labor supports both propositions.

I want to make some remarks about media reform, the particular changes concerning parts of the media sector and some of the broader issues that are still to be addressed. Having been shadow communications minister for three years from 2001 to 2004, I have had extensive exposure to structural, market and regulatory issues in the communications sector, particularly in broadcasting. There is a gaping need for major deregulatory reform in the sector. Although the government has made one or two half-hearted attempts at this, it has spectacularly failed to advance the cause. In the last couple of days we have seen yet another example of that spectacular failure. In many respects, the most disappointing aspect of the legislation before the parliament today is that it is so limited that its scope in providing sensible reform in the media sector is so small, albeit at least positive.

The issue of local content on pay TV is quite a vexed one. Unlike the free-to-air TV network, it is more complicated to regulate. Rather than dealing necessarily with a single network per se, you are actually dealing with a platform that broadcasts any given number of channels and particular kinds of content that, almost by definition in some cases, are not amenable to local content. If you are broadcasting, for example, international sport on a particular channel then it seems to me to be a bit absurd to impose an obligation that X per cent of that channel should be for local sport, particularly when you consider that there are other channels that broadcast very substantial amounts of local sport—for example, the footy channel in the case of Foxtel. It is more complicated to regulate local content on pay TV but, nonetheless, it is a worthy pursuit.

I would like to place on record—and I suspect other speakers have also done this—that there are some very positive things happening on pay television with respect to local content. In particular, I applaud the locally produced and scripted series Love my way. I think I saw most of the episodes—not every one—of both the original series and the second series. It was an excellent example of high-quality Australian drama, with interesting and innovative scripting and top-class acting performances. It is the kind of cutting-edge Australian drama that we would like to see more of on both pay TV and free-to-air TV. Anything that encourages more of that kind of investment—which, in the case of Love my way, I think, in the long term will prove to be a very positive thing for Foxtel—certainly has my support and the support of the opposition.

Community radio is a sector that I have a connection and involvement with going back many years and I think it is worthy of greater government support. In the recent budget there was a small increase in funding for community radio. That was the first funding increase for many years. I think it was a fulfilment of an election promise by the government. Certainly, I commend the government on extending that small but significant additional support to the sector. Community radio represents in the vicinity of 250 radio stations around Australia. There is also a significant community television network or an array of stations that has emerged in recent years. All of them are underfunded, all of them are running on the smell of an oily rag, all of them are getting by hand to mouth and all of them are relying on an army of volunteers. They all play a very significant role in Australia’s broader cultural and media life. They provide an array of services to sections of the community that often do not get proper services from mainstream media. In particular, they provide very effective training opportunities for young people, mostly to get an early entree into mainstream media and to acquire skills. In many cases, whether as performers, technicians, announcers or script writers—all sorts of different skills—people get their first step into community radio or TV before moving on to bigger and better things.

Community radio and television plays a very important role in Australia’s creative life and the media sector. It deserves, I think, greater recognition, greater funding and greater support not only from government but also from the community generally. Although the provisions of the legislation before the House tonight are only modest and specific reforms, I commend the government on introducing them. I would urge the government, and indeed all members of the House, to pay greater attention to community broadcasting and to provide greater support.

Community broadcasting is one of the hidden success stories of Australian media and, in particular, it is an outstanding example of how government assistance to community organisations can be provided in an efficient and very cost-effective way. Prior to the changes in the budget, total annual funding by the government of community broadcasting was in the vicinity of $6 million a year. This was distributed through the Community Broadcasting Foundation, an organisation on which the government nominates one board member and the remaining members are from the sector itself. The total budget for running the Community Broadcasting Foundation is in the vicinity of $300,000 to $400,000 a year and the remainder of the money is, in effect, distributed in grants to the 250-odd community radio stations around Australia.

Although inevitably there are arguments and debates about how that is done, one thing is absolutely clear: the taxpayer gets real value for money out of this funding because the vast bulk of the money ends up providing direct assistance to a vast array of community radio stations all around Australia, assistance which translates immediately and directly into the kinds of things that those stations need to function. It is a very good model for distributing government assistance in a way that is at arm’s length from politicians; the actual decisions about who gets what money are not being taken by ministers, bureaucrats or members of parliament. Those decisions are effectively being taken by the sector collectively and large amounts of money are not being siphoned off in administration costs. Community radio is one of the quiet achiever sectors of the Australian economy. Community television, a much younger and in some respects a more problematic sector, is also worthy of the same support.

But the question I would like to ask tonight, which I think this legislation really raises, is: where is the rest of the government’s reform agenda? Where is the serious reform agenda in communications, media and broadcasting? When you look across the spectrum in the broadcasting sphere, you see a negligible take-up of digital television. Fewer than 10 per cent of Australian households have a digital TV capability, unlike those in the United Kingdom where there is a free-to-air product—digital TV called Freeview—which has roughly 30 channels which, for the cost of less than $100 for a set-top box, any ordinary citizen with an analog TV can gain access to. The end result is that—as of the last time I looked, which is about a year ago—over 50 per cent of households in Britain have taken up this option. Although many of those 30 channels are not exactly showstoppers, nonetheless they still constitute a significant enhancement to viewing choice in the UK, a driver for the take-up of digital TV and a basis on which we can assume that in the future there will be a significant further enhancement of digital options in United Kingdom broadcasting.

We have seen similar things occur in other parts of the world. In Berlin, for example, all television broadcasting is now digital and this is gradually being undertaken in other regions of Germany. Whereas many other developed nations are moving ahead in leaps and bounds in digital broadcasting, we are still stuck in the straitjacket of the 1998 legislation. I concede it was supported by Labor, so the original decisions that were taken by the government on these issues had our support. Many of those decisions were wrong. Many of those decisions were well-meaning and well-motivated but were taken in ignorance or with a lack of understanding of where things were likely to head. We as a society remain shackled by those decisions, which are essentially designed to inhibit the development of digital and to ensure that digital is really nothing other than a direct reflection of the existing analog regime, rather than being—as is the case in the UK—a new, different product which in some respects is competing with analog.

To compound this problem, despite a slight recent improvement, our level of broadband access is still rated as only 17th in the developed world. That is on the basis of an extraordinarily generous interpretation of what constitutes broadband—256 kilobits, which in many parts of the world would be regarded as a joke in terms of speed, where megabits is the more appropriate magnitude of broadband. Even with that extraordinarily generous OECD definition, we in Australia still manage to only get up to 17th in the world while equivalent countries like Canada, the United States and most of the western European countries are way ahead of us. It is a long and complicated story as to why we have been so recalcitrant in broadband access, most of it to do with Telstra’s continuing market dominance, Telstra’s unwillingness to really push the envelope on broadband and the government’s unwillingness to put in place market structures and genuine competition arrangements which ensure that Telstra is forced to do that under truly competitive pressure from other players in the market. But that is a separate albeit related issue.

The question we need to be asking is: why is it that, after years of recycling the failed, discredited policies of former communications minister Richard Alston, we are still stuck in the same place? The new Minister for Communications, Information Technology and the Arts, Senator Coonan, puts out a set of proposals, which are only draft proposals or discussion options, which include a warmed up, reheated, rebaked version of the discredited datacasting model, which was unique to Australia and designed to enable the government to say to the existing TV networks, ‘Don’t worry; there’ll be so many restrictions on this that they won’t be able to compete with you in free-to-air broadcasting,’ and at the same time to say to would-be new entrants, such as Fairfax and News Ltd, ‘Well, we’re not going to give you a TV licence, but we’ll give you the next best thing; it is datacasting.’ The end result was that nobody bid for those licences. They lapsed and the spectrum that was available for use—for competition, greater choice for consumers and innovation—was not used, and of course now the government is attempting, in a sense, to recycle the same discredited ideas.

Similarly, the government seems unable to bite the bullet on multichannelling, mainly because two out of the three commercial TV networks are opposed to it. There is an extraordinary situation here. The basic argument of two of the three commercial TV networks on multichannelling—the third, the Seven Network, actually wants to do it—is that they do not believe there is a viable business model for sending out more than one signal over their digital spectrum, even though technically they can send out several signals. I think this must be one of the rare cases in the history of regulation where private businesses are asking a government to ban them from doing something because they do not believe they can make money out of it. I find that quite extraordinary. In my view, the answer on that front should be simple: if you do not believe you are able to make money out of it, don’t do it—but why should we ban people from doing it?

A couple of days ago in the Senate, the minister, Senator Coonan, effectively scuttled the government’s reforms to cross-media ownership and foreign ownership laws, which, again, have been floating around for almost five years. In September 2001, the Prime Minister first floated the prospect that the government was proposing to abolish the restrictions on cross-media ownership and foreign ownership, and throughout the following parliament attempts to do this were eventually blocked in the Senate. The government has dillydallied and messed around ever since, frightened of the National Party and frightened of the proprietors—not wanting to actually take anybody on and not wanting to have a serious reform agenda but simply trying to please the media moguls.

Yet again they have discovered that it is pretty difficult to go into a genuine reform agenda with the aim of just pleasing established vested interests. News Ltd, in their submission to the government’s discussion paper process, has indicated that the abolition of cross-media ownership and foreign ownership laws no longer has their support because of the associated proposals with respect to datacasting and the government’s clear indication that it will leave open the possibility of that additional spectrum being used for subscription television purposes—that is, for other players to compete against Foxtel—and the fact that the government is refusing to allow a fourth TV network to be established.

It is hardly a surprise that the News Ltd position is essentially driven by self-interest. I do not criticise them for that—they are a private business. They are entitled to put a position that reflects their business interests, and in particular they are entitled to run an argument which says that their business interests are being unfairly disadvantaged. Frankly, broadly I agree with them. I think their assessment of the government’s reforms is essentially fairly accurate. So it is hardly surprising that they are taking the position they have, and the mere fact that it is obviously driven by self-interest does not necessarily make it wrong.

The government’s cross-media ownership and foreign ownership laws reform agenda has effectively been scuttled, and that creates a real opportunity for the government to literally go back to the drawing board. Instead of starting from the premise of pandering to media moguls—instead of starting from the premise that they want to give a few free kicks to powerful media companies that might deliver political support for them in the future—why do they not start from the premise that a fundamental liberalisation of broadcasting and media in this country is long overdue and that there should not be restrictions on ownership. The Productivity Commission had it right. The Productivity Commission report in 2000 went through all of the issues that need to be addressed and essentially said that, once you have addressed the issues—the use of the spectrum, more competition, multichannelling and all of those kinds of issues—and got the market structure right with a greater degree of competition, openness and lighter regulatory arrangements, it is appropriate to ask questions about cross-media ownership rules.

Basically, those rules are a product of a restricted regime. Where you have a regime that says, ‘There shall be no more than three commercial TV networks,’ almost by definition you create circumstances where, in order to ensure that you do not have outrageous monopoly power and abuse of that power, you have to have ownership restrictions. You have to use regulatory mechanisms, and in some cases fairly crude prohibitions, to ensure that you have a minimum level of diversity, because you are precluding the market from delivering that diversity. It is long overdue for the government to go back to the drawing board genuinely on these issues and acknowledge that, in certain respects, the world has moved on.

It is a bit of an open secret that, in years gone by, I have broadly been a supporter of the idea of a fourth TV network. I would have to say that that proposition is gradually becoming less and less significant because, at the early stages of broadcasting over the internet, we are starting to offer very serious competition to the existing TV networks and, indeed, to Foxtel. That is a good thing, but it should be on equal terms and in genuinely liberalised markets, not on the basis of this incredible hodgepodge and patchwork of conflicting and competing regulatory arrangements, quid pro quos, deals for mates and special arrangements that are designed to cobble together something that does not offend this person or that group.

We really need to go back to first principles in all these issues and recognise that, gradually, technological change is sweeping away the antiquated regulatory arrangements that the government has tried to preserve in the wake of that technological change. For the benefit of Australian consumers, creative producers, artists, scriptwriters, actors and all those people who have contributions to make, we need to revitalise this whole sector. The starting point has to be to get away from the 1998 regulatory regime, to admit that it was a mistake and go back to first principles, ensuring that no existing player in the industry is unduly disadvantaged but acknowledging that overall, in the necessary reform, while there will be some pain and some gain for everybody, the Australian community, consumers and producers will be the beneficiaries. (Time expired)