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Tuesday, 28 April 1987
Page: 1904


Senator WATSON(5.58) —I believe that most people these days in times of rapid technological change would accept that there is a need for a reworking of the existing broadcasting legislation. I believe that the way in which this Labor Government has approached this need for change leaves something to be desired. We have seen yet another example of the system-if one can call it a system-of Government by Press release. This is a practice with which we have become rather familiar under this Labor Government, especially regarding taxation matters. It is unacceptable in that it creates situations where businesses are required to pursue their operations on the strength of a ministerial statement alone, which is not always supported in timely fashion by legislation. I remind the Government that it is the function of the full Parliament to pass legislation. It is not a responsibility that should be passed on to individual Ministers. The result of Government by Press release is a system where businesses are required to operate under uncertain and ambiguous conditions.

In the case of the legislation which is now before the Senate, the Minister for Communications (Mr Duffy) announced on 27 November last year that the Federal Government had approved major changes to the Broadcasting and Television Act 1942. That involved, firstly, the scrapping of the two-station rule that prohibited any individual or group from owning more than two television stations in the country and, secondly, the Minister also indicated that cross-media ownership rules would be introduced. However, as there is no reference to that in the legislation at hand, we can only assume that the Government intends to extend the period of uncertainty regarding broadcasting legislation in Australia, and that is deplorable. It could easily be the end of this year before we finally know what the laws governing this important industry will be.

So in the interim we have speculation on how the dice will fall. Currently, a number of groups, if it were not for the grace of a six monthly transitional period, would be in breach of the law. The Bond Corporation, for example, is technically breaching the existing two-station rule in controlling stations in Perth, Melbourne, Sydney and Brisbane. So too, is Fairfax with its control of stations in Queensland, Victoria and New South Wales. There has been a major restructuring of the industry prior to new legislation passing the Senate. I would suggest that that is not the way to deal with important legislation, whether it be broadcasting or even taxation legislation. Nevertheless, attempts to reorganise the industry are welcome. The Australian Broadcasting Tribunal, in its 1985-86 annual report, made note of the need for a revision of the existing system. It said that the current legislation:

. . . does not deal properly with converging technology at a time when the distinction between broadcasting, radiocommunications and telecommunications as a whole is becoming increasingly irrelevant.

There is a general consensus that while the two-station rule has served a useful purpose it has now outlived its valuable life. That is so for three reasons: Firstly, it ignores the varying financial strengths of licences; secondly, the introduction of satellite technology significantly increases access to viewer markets and, thirdly, it has restricted the expansion of regional operators which may have control over two stations but which have a very small viewing public compared with operators controlling two stations in, say, Sydney or Melbourne.

The principle of increased competition that underlies this legislation is a valuable one that could well flow on to other markets. Increased competition creates greater efficiency, service and responsiveness to consumer demand. Through the opening up of this industry to greater competition, particularly in regional areas, viewers will have greater choice and access to television services. There are few people who would argue that access to two or three services is not an improvement on one. Those of us who live outside the major population centres have as equal a right to receive a range of television services as those who live in, say, Sydney or Melbourne. The concept that underlies this legislation is, therefore, an important one-greater choice for more Australians.

The media occupy an important place in the community and an important role in the lives of many. I feel sure that it escapes no one's notice that the media also plays a very powerful and influential role-perhaps too powerful, in political terms. It is therefore necessary that the framing of legislation relating to this industry should be carried out with meticulous attention to detail. It is here that the legislation before us falls short. A number of the implications of the Bill have been left unresolved.

As we have already noted, the freeing up of the market is welcome. However, it would be naive to suggest, given the potential power that broadcasters can wield, that their operations should go uncontrolled. The existence of a body such as the Australian Broadcasting Tribunal bears testimony to the need to maintain some direction. If the legislation should pass, the opportunity for the networking of television services will be vastly expanded. Changes of ownership that have already occurred give a clear indication of this.

Yet, no consideration is given in the Bill to the possible need for regulations to oversee financial arrangements between the stronger networks and their affiliated stations, or to the management of disputation between these parties with regard to programming. In the United Kingdom and the United States of America, where networking is commonplace, quite stringent controls operate in these areas, but in Australia we have none. The Bill liberalises ownership controls in the broadcasting industry without giving adequate thought to the full implications of its provisions. Arrangements that exist overseas suggest, however, that consideration should be given to the need for mechanisms to control aspects of networking. Such rules must, however, tread the fine line between adequate guidance and excessive governmental regulation.

Currently, under the Broadcasting and Television Act, the Australian Broadcasting Tribunal is the regulatory body appointed to monitor the operation of the industry. While the Bill at hand gives some minor extension to the responsibilities of the Tribunal in Part II, clause 6, it does not appear to make adequate amendments to deal with the changing circumstances that will flow on from the legislation. There will be many more licences and the tasks of the Tribunal will be considerably multiplied. Already we have a situation where the Broadcasting Tribunal in its annual report for 1985-86 has reported that its resources `cannot adequately review the performance of over 200 licences over the required three year period'. That is a confession. Therefore, I would recommend that a review of the Tribunal's responsibilities should take place. This would be a judicious step towards ensuring that the public is not unintentionally harmed by the implications of the Bill.

I now wish to devote some time to the Tasmanian situation. The very fact that the Government has at last given some recognition to Tasmania is to be welcomed. All too often the Hawke Government has demonstrated that it views our State as little more than a thorn in its side and scant consideration has been given to the wishes and opinions of Tasmanians.


Senator Tate —Oh!


Senator WATSON —I must acknowledge, in response to the Special Minister of State, that in this matter the Government has recognised that Tasmania has a special case that is worthy of separate consideration, and for that it should be commended. The circumstances are unique with regard to broadcasting in Tasmania for the reason that its two licences are held by the one organisation-ENT. This situation arose in 1982 when ENT, the owner of TNT9 in the north of the State, purchased the southern station TVT6. The aims of the amalgamation were threefold: firstly, to achieve economies of scale; secondly, to enable better quality local productions; and, thirdly, to facilitate the development of outside broadcasting units to allow better coverage of sporting and other events. While all these improvements have been welcome, the fact that Tasmania has only one commercial licence holder means that there is still room for some improvement.

In line with the stated objectives of this Bill to expand commercial television services to regional Australia, the Government plans to introduce an additional commercial licence in Tasmania by 1993. To achieve this, firstly, ENT has been given the option to sell one of its existing licences to an independent purchaser by a date set by the Minister. Secondly, both licensees would then operate an expanded service area to cover that of the other. Currently, TVT6 covers southern Tasmania and TNT9 the north with a minimum of overlap. However, some opposition has been voiced to this sort of proposal. For example, the Senate Select Committee on Television Equalisation majority report considered that this proposal would allow ENT to select its own competitors. In opposition to this possibility the Committee recommended that ENT should be required to sell its licence to the highest bidder and that the transfer of the licence should be subject to the approval of the Australian Broadcasting Tribunal. In dissenting reports Senators Powell and Puplick considered that ENT's licences should be consolidated into State-wide licences and applications opened for a second licence to serve Tasmania in competition. The dissenting reports of Senators Lewis and Sheil call for tenders for a second licence and the consolidation of the existing licences held by ENT, the implications of this being that the financial benefit of the issue of the second licence would go to the Government. Thereby, ENT is arbitrarily being denied an asset, worth a considerable sum, that it has built up over a number of years.

There are some very basic and sound reasons, however, why I believe that both of these approaches should be rejected in favour of a plan to allow ENT to sell one of its licences. They are as follows: Firstly, the basis upon which equalisation will take place in other States is through the formation of approved market areas in which existing and additional licence holders will operate. Existing licence holders will, in effect, gain access to an expanded viewing market in compensation for the loss of market they will suffer by the impact of the Government's decision to grant more licences. The Tasmanian situation, as I have mentioned before, is unique, however, in that the existing licence holder already has access to the only practicable market area-that which covers the whole State. The impact of the Government's proposed legislation would result in ENT losing 50 per cent of its market. Given that all other licence holders in Australia will obtain a greater access to market areas as a result of the implementation of this Bill, it would seem only equitable that ENT could expect the same treatment or, alternatively, be given some other consideration.

In the sale of one of its licences, ENT is not gaining a disproportionate benefit; rather, it has the opportunity to enter a purely commercial transaction and stands to gain only what that market will bear-nothing more and nothing less. As a commercial transaction, the sale will be subject to all the regulations which would normally apply-the Trade Practices Act, the Australian Broadcasting Tribunal and existing provisions of the principal Broadcasting Act. There has been speculation from a number of quarters that ENT will be able to sell to a friendly competitor. However, I would suggest that the responsibility of ENT to keep the best interests of its shareholders in mind and its existing legal constraints would prevent this from happening.

Under the provisions of the Bill we are now discussing, division 6, section 94zc, sub-section 8 provides that purchasers of licences must satisfy the Australian Broadcasting Tribunal that they are suitable to hold a licence. They must undertake to:

(a) comply with the conditions of the licence;

(b) provide an adequate and comprehensive service pursuant to the licence; and

(c) encourage the provision of programs wholly or substantially produced in Australia and use, and encourage the use of, Australian creative resources in and in connection with the provision of programs.

Section 89a (1) of the principal Act dealing with the transfer of licences states that such transfers must have the prior approval of the Australian Broadcasting Tribunal. Following this, and according to section 89a (1d), the Tribunal may refuse to give consent under a number of circumstances. These circumstances apply, for example, where there is a need to avoid undue concentration of influence, whether direct or indirect, on the person or on the company or companies holding the other licence. One would expect that such provisions and others contained in the principal Act would be adequate to prevent the sale of the licence to a friendly competitor. I therefore believe that that argument is a nonsense.

The transaction must also comply with section 45 of the Trade Practices Act, which covers contracts, arrangements or understandings restricting dealings or affecting competition. If the contract, arrangement or understanding has the purpose, or likely purpose, to substantially lessen competition, the provisions of this section of the Act can apply. To impose further regulations on this sale, as has been suggested, would I believe set an inappropriate precedent of government interference in the market-place. It will be subject to all the usual regulations, and to impose any more could be construed, I believe, as quite discriminatory.

I emphasise that I do not support any disproportionate benefit to anybody, merely an equitable solution for those who are the players. It is important that we do not lose sight of the fact that the sale will take place at the Government's behest to facilitate the introduction of the new licence and greater competition in Tasmania. The best interests of all will be served by introducing this competition as soon as possible. Under existing licensing procedures the issue of a second licence may take as long as four years, whereas the sale of one of the existing licences could achieve the desired result very much more quickly. Surely it is in line with the whole thrust of the legislation to negotiate the introduction of expanded broadcasting services at the earliest possible time.