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Wednesday, 25 March 1987
Page: 1333

Senator PUPLICK(6.02) —As Senator Robert Ray has already indicated, I have appended a dissent to the report of the Senate Select Committee on Television Equalisation. I seek leave to incorporate in Hansard the 14 paragraphs of my dissenting report.

Leave granted.

The report read as follows-


1. That the Broadcasting Amendment Bill 1986 be defeated in the Senate.

2. That action be taken by the Department of Communications to process all applications lodged for Supplementary Licences, and that existing applicants be advised that upon request one or two Supplementary Licences will be made available; with all licences to be granted on request.

3. That broadcasting of approved programmes on Supplementary Licences be required to be commenced by 1989.

4. That the Government should announce forthwith a decision that by 1992 (in conjunction with the operation of the next generation of Aussat satellites) a complete range of DBS and Pay-TV services will be licensed, and that restrictions on MDS/VAEIS services (other than limited encoding restrictions) will be lifted. At the same time MDS/VAEIS services should be brought under the operation of the Broadcasting and Television Act.

5. That the necessary steps be taken now to ensure that the new generation Aussat satellites have sufficiently powerful transponders to provide these required services.

6. That the Government should announce a commitment to the development of Cable Television Services throughout Australia provided by commercial licensees using the facilities of Telecom as the common carrier.

7 That the existing `two-station' rule be abolished, but that licences be granted to broadcasters such that no one licensee has access to more than 43% of the total available Australian market, and that a one licence to a market rule be put in place.

8. That cross-media ownership rules be enacted along the lines of those operating in the United States of America, prohibiting the ownership of a commercial television licence and a daily newspaper within the same market, and that divestiture of existing interests be required to be in place by 1992.

9. That major steps be taken to overhaul the licensing procedures of the Australian Broadcasting Tribunal, and that the responsibilities of the Tribunal vis-a-vis those of the Minister be clarified to return greater licensing and control powers to the Minister, leaving the Tribunal primarily responsible for the policing of the Act and the establishment of programme standards.

10. That the system of licensing be revised to place greater emphasis upon the grant of licences by competitive tender with the financial `viability' criteria of the Act being substantially modified and accorded lower priority.

11. That in relation to Tasmania, the licences of ENT Ltd be consolidated and it be allowed to broadcast State-wide; and that the Minister instruct the ABT to call applications for a second commercial licensee to serve the whole State in competition.

12. That the recommendations of the Committee Majority be supported in relation to:

(a) Mildura

(b) Griffith

(c) Geelong

(d) Cairns

(e) the need for independent, external assessment of the competing claims of the Department and private consultants in relation to spectrum and frequency management arrangements and policies.

13. That in any event NBN-3 and WIN-4 not be forced into UHF transmission at this stage, and that no policies be adopted which would preclude a continuing mixture of VHF and UHF broadcast signals.

14. That immediate steps be taken by the Government to commission or undertake a significant national survey of viewer attitudes and requirements in relation to the future of television development, and that the issues canvassed not be restricted to mere commercial alternatives but be extended to canvass matters such as expansion in public broadcasting services; Channel 4 type services and the expansion of SBS programming.

Senator PUPLICK —The Government's preferred option in this matter has been for the provision, it says, of a service of aggregation of regional television programs. I have attempted to put forward in my dissenting recommendations a series of proposals based upon two prime considerations-the provision of choice and the provision of diversity. The Government's preferred option is for choice by aggregation. Firstly, I believe that this method does not give real choice. It will end up providing a choice between Dynasty and Dallas, a choice between the football broadcast by Rex Mossop or that by Ray Warren or whatever happens to be the case. But it will not be a real choice. Secondly, I believe it will take too long to achieve this choice. In the case of Victoria, that choice will not be available to viewers in regional areas until 1992 at the very earliest. Thirdly, I believe that this method will cost too much, and I will return to that point later. Fourthly, it will be unfair to some smaller regional market operators such as those in Griffith and Mildura. Finally, it is clearly designed to be precipitated into an aggregated situation by the operation of the so-called one in all in rule whereby the smallest operator in the market will be allowed to force the other operators in the market to aggregate whether they want to or not.

The alternative which the Government says it has put forward in the provision of the multi-channel service system is no alternative because it unfairly penalises those who choose that route, firstly, by maintaining the so-called two-station rule limiting their capacity to own more than two broadcasting stations; and, secondly, by requiring them to draw up plans for the provision of service in an unrealistically and unreasonably short time, subject to ministerial veto.

Senator Sheil —They call that market driven.

Senator PUPLICK —As Senator Sheil says, it is their version of market driven. I have proposed in my dissenting report that we should move immediately to the provision of supplementary licences-either one or two supplementary licences-to existing broadcasters on application without the need for complex, lengthy or expensive hearings. I advocate the immediate issue of supplementary licences. In my view, that will provide choice faster, more fairly and more cheaply and it will give real choice.

I mention that this would be cheaper. It is estimated that the provision of additional services by the grant of one supplementary licence would cost the operator approximately $2m to $3m. Two MCS permits, which is one of the Government's proposed options, would cost $5m to $5.5m. Aggregation on the very high frequency band would cost $14m to $14.5m and aggregation on the ultra high frequency band, as the Government wants, would cost $18m to $18.5m. That is a factor of nine times the cost to the operators concerned. As I say, I believe that supplementary licences provide real choice because they allow complementary programming rather than competitive programming. People would have a choice between complementary programs rather than directly competitive programs. This is what is known in the broadcasting industry as the Steiner theory and I have attempted in the dissenting report to deal with that in some considerable detail. I do not have time to do so here this evening.

I believe that by imposing a time limit on supplementaries until approximately 1992, at which stage one will be in a position to look at the services available as a result of the second generation of satellite broadcasting, we will be able to move to an almost open skies policy in terms of access by people to programming on the satellite. Certainly, people will have to buy dishes; that is only to be expected. But they will have the benefit of supplementary licenses and in addition will have access to satellite programming. Thus, the access to and direct broadcasting from satellites and video and audio entertainment and information services, which are discussed in the report, will be made available to a far greater number of people throughout Australia. I reject Senator Ray's comments about the cost of cable television, which is also covered in my dissenting report. I believe that there is a confusion between the cost of the public sector and the cost to the private sector of the provision of cable services. I think that needs to be analysed in far greater detail than we have the opportunity to do today.

I believe we need new players in the market. I believe we need new operators. I believe that the viability criterion, which the Australian Broadcasting Tribunal in its interim report on the future directions for commercial radio in fact described as a conservative and protectionist device, ought in fact to be done away with. People ought to be able to take the risk. Provided they are fit and proper persons-the Tribunal in the 96FM case has determined how that is to be operated-provided they can survive commercially the test applied by Mr Justice Shepherd in the 2SM case and provided they have the technical capacity, they should have access to becoming a broadcaster. I believe that the public needs to be more directly consulted on the nature of television services which it wants in the future.

I come, therefore, to the final point that I have the opportunity to make today, and that is that I believe in legislating for very tight cross-media ownership rules. In this respect I am at variance with all of my colleagues on the Committee and, I suspect, with the majority of people within my own political party. Nevertheless, I believe that it is imperative in Australia that we look at whether a person who owns a major daily newspaper in a market should be allowed to own a television broadcasting licence in the same market. It is an absolute scandal that we have already got to the situation in Australia that News Corporation Ltd is able to control something like 59.8 per cent of the major metropolitan dailies circulating in Australia; that John Fairfax and Sons Ltd controls another 22.8 per cent. We have in terms of the newspapers what is now clearly established as the Murfax duopoly. It ought not be allowed to extend itself to a total control of television broadcasting as well. As Senator Richardson would well know, in November 1976 Mr Keating introduced into the House of Representatives a Bill to enforce divestiture of ownership and control of the media. Mr Keating said:

Divestment must occur. In future, newspaper groupings should not be permitted to take over other groupings with holdings in radio and television.

I happen in this instance to agree very much with that as a matter of principle. In the United States of America the Federal Communications Commission enforces such a rule. In the United Kingdom the provisions of the Fair Trade Act 1973 provide that the Monopolies and Mergers Commission, in relation to newspapers, may refuse a newspaper takeover which might-and I emphasise the word `might'-operate against the public interest. They are the words of the Fair Trade Act 1973. In the case when Lonrho attempted to take over the Observer newspaper in the United Kingdom, it had to run the test of the Monopolies and Mergers Commission and very strict rules were placed upon it in terms of what it was permitted to do. I believe that that has to be done in Australia. I believe that the networking which will follow the 75 per cent rule provided by the Government is undesirable, and that we should go back to the principles which Mr Duffy attempted to establish, in terms of a 43 per cent coverage.

I say finally to those who have made commercial decisions based upon the Press release of the Minister for Communications (Mr Duffy) on 27 November last year, that the rule caveat emptor is going to apply to them, I think very strongly, and they deserve to have it applied to them. I believe we will have the opportunity, when the legislation comes before us, for a reasoned and reasonable debate on a most complicated subject.

I conclude by paying tribute to Susan Gibb and to the staff of the Committee for the way in which they handled this extremely difficult inquiry and to Senator Richardson, the Chairman of the inquiry. He conducted the inquiry with very great skill and patience but unfortunately he came to entirely the wrong conclusions, which he then had to put into the majority report only on the basis of his own casting vote.