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Wednesday, 29 November 2006
Page: 161


Mr RIPOLL (10:02 AM) —I rise to speak in this cognate debate on the Datacasting Transmitter Licence Fees Bill 2006 and the Broadcasting Services Amendment (Collection of Datacasting Transmitter Licence Fees) Bill 2006. This legislation follows the government’s decision announced earlier this year to auction currently unallocated broadcasting spectrum to provide new digital television services. This is the spectrum that was set aside in 2000 as part of the government’s disastrous datacasting experiment. As members will recall, the then minister, Senator Alston, attempted to create a new category of television service. In that event, the limitations on the types of programs that could be shown by datacasting licences were so restrictive that the auction failed. The failure of the government to use scarce broadcasting spectrum to allow the creation of attractive new services is one of the main reasons why its digital TV policy has been a spectacular failure.

This time around, the government has announced that the spare spectrum will be divided into two parts, known as channel A and channel B. Channel A will be reserved for in-home digital TV services and, depending on the technology used, it could provide up to eight television services. However, the holder of this licence will not be able to offer commercial broadcasting services. Channel A services will be limited to narrowcasting, datacasting or community television. This is an important feature of the regime and it is a point that I will return to later. Channel B will be subject to a less restrictive regime. There is a widespread view in the industry that channel B is most likely to be allocated to a licensee who will use the spectrum to provide mobile television services.

It is the intention of the government to auction the spectrum for channel A and channel B early next year. The bills before the House today are part of a number of steps that must be taken to allow the spectrum to be sold. These include planning the spectrum, designing the auction process and further clarifying the nature of the regulatory regime that will apply. The legislation before the House today relates only to proposed channel A. These bills facilitate the collection of licence fees from the holder of the new channel A datacasting licence. The Datacasting Transmitter Licence Fees Bill 2006 imposes an annual licence fee on the holder of a channel A licence based on the percentage of revenue received by the licensee. The bill provides that licence fees are to be levied on a sliding scale similar to that which applies to commercial free-to-air broadcasters. Fees range from half a per cent to nine per cent of the licensee’s revenue. The maximum rate of nine per cent will not apply until the licensee’s revenue exceeds $75 million.

The second bill in this package, the Broadcasting Services Amendment (Collection of Datacasting Transmitter Licence Fees) Bill 2006, provides payment machinery and record-keeping obligations to support the datacasting bill.

As I mentioned earlier, the government has indicated its intention to conduct the auction for the channel A licence early next year. The offer documents for the auction will need to specify the obligations of licensees. It is important that prospective bidders are informed as soon as possible about the nature of the regulatory obligations attaching to these licences.

Labor will support the passage of these bills through the parliament to impose a licence fee. The broadcasting spectrum is a scarce public resource. As a general principle, it is appropriate that the holder of a licence to provide services on this spectrum be required to pay an annual licence fee to the Commonwealth for the privilege of being able to offer these services. This principle has long been recognised in relation to radio and television services.

Notwithstanding the fact that the opposition will support this bill, we would like to take the opportunity provided by this debate to make some broader comments about the proposed channel A service and digital television policy in general. According to the government, the new channel A licence will have two significant policy impacts. Firstly, it has been argued that the new services will provide media diversity and will offset the effect of increased concentration and ownership as the inevitable consequences of the government’s new media laws. This claim is nothing but an attempt to deceive the Australian people about the impact of the new media ownership laws.

The restrictions on the new channel A licence mean that the services that will be likely to be broadcast will be limited to narrow types of services. There could be religious channels, a home shopping channel, a traffic report channel or a government services information channel. Channel A will not be a new commercial television service. It is nonsense to argue that these channel A services will offset the loss of diversity of news and opinion that would come about if a major metropolitan newspaper like the Age or the Sydney Morning Herald merged with a TV station like 7 or 9.

The government have also argued that channel A will be a significant driver of the take-up of digital television. This claim is open to considerable debate and I am sure we are going to hear from the government about what they think on this issue. As I stated earlier in the debate on the digital television bill passed last month, the government restricted the channel A services to programs which fit the description of narrowcasting, datacasting or community television. These of course are all niche services.

There is considerable scepticism in the media industry about whether there is a viable business model for channel A given that the licensee will be only able to show a limited range of programs. Perhaps that is something the member for Hinkler can address in his remarks—whether this will provide the sorts of services that he is looking forward to in regional Queensland or that might be provided to regional Australia.

News Ltd and Fairfax have indicated that they are not interested in bidding for this spectrum because they do not think that it is sustainable commercially. I think that says a lot about what the government is actually trying to do in this bill and what it has done in terms of its cross-media ownership laws.

It is interesting to note that in the explanatory memorandum to the datacasting bill the government declined to make any estimate of the amount of money that will be raised from the annual licence fee imposed by the legislation. This may be an indicator that even the government is aware that it is auctioning something that is unlikely to generate a significant revenue stream. It is very unlikely that channel A will make a significant contribution to driving the take-up of digital television.

The rollout of infrastructure to broadcast in digital has made excellent progress in the country—85 per cent of the Australian population can access all of their local free-to-air services in digital. However, in Australia and overseas it has been shown repeatedly that additional attractive digital content is the key to convincing consumers to invest in digital television. It is that element that has been missing from the government’s digital policy for the last seven years. The recent digital television legislation makes only a minimal attempt to address this deficiency. As most people would know, even if they have got digital television at home, it is almost a matter of saying: ‘Why would you have it? Why would you bother? Why would you spend the extra dollars required?’ It is quite expensive. The content that is likely to be shown on channel A will not appeal to a mass audience. It is clear that the rules regarding channel A were not designed with the interests of consumers in mind.

Back in 2000 the government set a target to switch off analog broadcasting by the end of 2008, which is now approaching very quickly. Of course, it has been clear for some time that there is no way this target will be achieved. Last week the Minister for Communications, Information Technology and the Arts, Senator Coonan, released what she called her ‘digital action plan’ to drive take-up so analog broadcasting can be switched off by 2012. Unfortunately the digital action plan is further evidence that the interests of consumers are a very low priority in the government’s media policy.

In the digital television legislation rammed through the parliament in October, Senator Coonan put in place a regime which limits consumer choice and reduces incentives for consumers to invest in digital technology. For example, commercial broadcasters can only run a second digital channel or multichannel in high definition until 2009—all a little bit too complex. At present HD equipment, high-definition equipment, is in only around seven per cent of households, which I think is a very poor outcome and an indictment of this government’s policies. It is typically three times as expensive as standard definition equipment. This restriction may suit the interests of some media companies, but it is very hard to see how it is in the interests of any consumers at all. The market for high-definition broadcast is so small that it must be doubtful whether it will be commercially viable for any broadcasters to launch a high-definition multichannel.

Senator Coonan’s legislation also severely restricts the ability of free-to-air broadcasters to show major sport on their digital multichannel service. Under the government’s laws, if for example there is a clash between the 7 pm news and a netball test between Australia and New Zealand, the ABC is not allowed to show the match live on ABC2. You would have to wonder how the government could possibly argue that this restriction is in the public interest. Again, perhaps that is something that the member for Hinkler can address in his remarks and tell us how that would be in the interests of his constituents, of regional and rural Queensland and of other regional parts of Australia. How will it encourage consumers to take up digital TV? This is the question that needs to be asked. This government is not serious about putting in place a media policy that puts the interests of consumers first.

There is much work to be done in getting Australia to the point of digital switch-over. As the minister admitted last week, more analog equipment is still outselling digital equipment. So, while 41 per cent of households have access to digital television, 26 per cent of households have two or more sets. One set-top box or digital TV per household will not be enough to allow switch-over to proceed.

Research commissioned by the Australian Communications and Media Authority indicated that only 17 per cent of televisions in Australia have been converted to digital. Again, that is a very poor outcome and a very poor indictment of the government’s policy in this area. The task of achieving digital switch-over is a huge policy challenge for this country. Australia and the UK are both due to complete switch-over to digital by 2012, some many years after the government had originally indicated would be the date. However, the UK is far more advanced than Australia along the path to digital transition. 72.5 per cent of households have access to digital TV in the UK and it is estimated that 40 per cent of TVs have been converted—a much better outcome.

In Australia there is still a widespread lack of awareness in the community about digital TV. Fifty-seven per cent of people do not know whether digital television is available in their area. Thirty per cent of people are not aware that analog broadcasting will be switched off at all. Measures announced in the digital action plan, such as improved labelling of analog equipment, increased consumer education on the benefits of digital TV and industry coordination, are absolutely essential and Labor encourages the government to progress these matters as quickly as possible. The announced measures, however, do not make up for poor government policy that limits the appeal of digital television to consumers.

The digital action plan announced by the government contains no additional money to allow the ABC and SBS to create new attractive digital content which would encourage consumers to take up digital. Labor believes that the national broadcasters have a key role to play in building a digital Australia. Through ABC2 and the SBS world news channel, the national broadcasters have shown that they are keen to embrace the potential of digital television. They need government to maybe go that one step further with them to make that happen. If public broadcasters are to exploit the full potential of digital television then additional funding will be required. It is the old case of the government needing to put its money where its mouth is. Currently ABC2, the ABC’s digital-only channel, runs on around $2 million a year. If you put that into the context of costs of programming and content, $2 million is literally a drop in the ocean.

As a consequence the service largely consists of time-shifted material from the main channel and children’s programming. Exciting new content is needed to drive digital uptake. Given where we are currently at in digital uptake, perhaps we need to go that one step further—swing the pendulum a little bit too far in order to make amends and bring people on board, to drive them to seriously look at digital uptake. Otherwise, I am afraid that even by 2012 we are not really going to get the sorts of outcomes that the government is hoping for.

The ABC and SBS both made bids in their triennial funding submission for the resources to make this content happen. The ABC asked for funding to broadcast an extra 200 hours of digital-only content for the ABC2 and ABC broadband platforms. Two hundred extra hours is not a lot. They also sought to develop interactive television enhancements to differentiate digital from analog television. SBS sought funding for two new digital-only channels. These proposals were completely rejected by the government which, if the government seriously wants to make this happen, should not be the case. In the UK, extra channels and interactive services offered by the BBC have been a key driver of digital take-up.

In the lead-up to next year’s budget I urge the government to reconsider providing extra funding to the national broadcasters as a way of increasing the appeal of digital television to ordinary consumers. The announcement by the minister last week that a firm date will be set for digital switch-over is welcomed, but there is no point setting a date unless it is backed by credible policies as well as dollars.

Senator Coonan’s digital action plan comes seven years after the former minister, Richard Alston, released his digital broadcasting industry action agenda. Regrettably, the digital television regime that the government has legislated means that Senator Coonan’s plan is likely to be only a moderate improvement on that of her predecessor. So while the government has spent years dithering on digital policy, other developed countries have rapidly moved into the digital age. People listening to this might draw a comparison to broadband to the home to show where this government has left this country in terms of moving into the 21st century properly.

The take-up of digital television in Australia lags well behind countries like the UK and the US where governments have invested heavily in the transition. Achieving digital switch-over offers sizeable benefits for the Australian economy as well as for consumers. It is not just about giving consumers a better viewing experience. The reason why governments around the world have made achieving digital switch-over a policy priority is that it offers a large efficiency benefit known as the digital dividend.

As I have said in the House previously, there is strong public interest in freeing up the spectrum currently used for analog broadcasting so that it can be deployed for additional TV channels or wireless broadband services. More efficient use of spectrum could be worth hundreds of millions of dollars to Australia. In addition to this efficiency dividend, achieving switch-over would end costly simulcasting where broadcasters are forced to transmit in both analog and digital, which is obviously inefficient. The government has conceded that every year it costs around $75 million to meet the analog broadcasting costs of the ABC and SBS, which assists regional broadcasters.

Digital switch-over would also allow these funds to be redirected to programming. I am sure that this would be welcomed by all viewers. I conclude my remarks today by restating that the opposition will support this legislation so that prospective bidders in the auction of channel A can have a measure of certainty about the costs involved if they want to acquire the licence. Labor has very grave doubts about whether channel A will have a significant impact on the take-up of digital TV. This government needs to seriously rethink its approach; it needs to design a policy that serves the interests of the community and serves the national interest and the economy. I commend the bills to the House.