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Tuesday, 3 May 1994
Page: 92

(Question No. 949)

Senator Alston asked the Minister representing the Minister for Communications and the Arts, upon notice, on 21 December 1993:

  (1) Has the Australian Broadcasting Corporation (ABC) approached the Government in relation to the possibility that the Trade Practices Commission (TPC) will make a ruling that the bundling arrangement favoured by the ABC for Licence C is not acceptable; if so, what was the precise nature of the approach; if not, why not.

  (2) On what basis does the ABC believe, as indicated at the 15 November 1993 estimates hearing, that the TPC will grant approval for a bundling arrangement.

  (3) What planning has the ABC undertaken for Licence C should the TPC reject its bundling proposal; if planning has not taken place, why not.

Senator McMullan —The Minister for Communications and the Arts has provided the following answer to the honourable senator's question:

  (1) The ABC Chair wrote to the former Minister on 16 December 1993 requesting that he approach the Treasurer with a view to his directing the Trade Practices Commission (TPC), under section 29(1)(a) of the Trade Practices Act, to give special consideration to perceived public interest aspects in considering the ABC application. When considering this matter, the Government was mindful that the Parliament, in passing amendments to the Broadcasting Services Act 1992 to provide for Pay TV, agreed to specific provisions making all Pay TV activities subject to the Trade Practices Act. Services under Licence C are required to be undertaken on a fully commercial basis.

  (2) The ABC holds the view that, because news, children's, documentary and arts and entertainment services proposed under Licence C, as in all other major markets, are typically provided in the delivery of subscription services as an integrated component in the basic package of core services, the TPC would accept the commercial and public interest arguments advanced in the course of the ABC's application and subsequent submissions.

  In the event, the ABC subsequently withdrew its application to the TPC following release by the Commission of a draft determination. The draft decision said that the claimed public benefits did not outweigh the potential anticompetitive effect of the arrangements proposed by the ABC for operation of Licence C, and that there was a strong possibility of an overall detrimental effect on consumer welfare.

  (3) The ABC has advised that it has a variety of operational options which are regularly assessed and reviewed in the light of prevailing policy and commercial circumstances. The ABC has indicated it will continue to review those options, governed at all times by the Board-determined criteria that any eventual proposal should be demonstrably viable.

  As the ABC withdrew its application to the TPC, the Commission will not be making a final determination in regard to the application. It is open to the ABC to make a fresh application to the TPC on proposed commercial arrangements for operation of Licence C services.