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Wednesday, 16 August 2006
Page: 27

Senator MURRAY (11:36 AM) —Following the second reading speech of the minister and the speech of the shadow minister, as the portfolio holder for the Democrats I want to indicate that the Australian Democrats also support the Broadcasting Legislation Amendment Bill (No. 1) 2005 [2006] because it makes sense. It makes sense for commercial television licences to multichannel and be exempt from mandatory high-definition television quotas. This is good policy, it is sensible policy and I regret that the bill was not brought forward earlier.

The big question is one that Senator Conroy also posed: why does this provision apply only to remote areas of Australia? Why can’t it be enforced nationally and in the major metropolitan areas? Possibly it is because the commercial television interests in large metropolitan areas have lobbied the government so long and so hard that it dare not move a muscle or make an amendment that would in any way get its media allies offside. In case government members think that is harsh, I should say that there seems to be a universal, quite well-informed opinion that the government is extremely sensitive to the media allies—often described as media families or even media moguls—so it only implements policy that makes sense in remote areas, where the advertising revenue streams are limited and where the big media players have little interest in fighting for limited revenue streams. I hope that is not the reason, but that is a widespread belief.

In the remote licence areas, the government is willing to implement a policy that the ACCC identified in August 2004 as being ‘in the best interests of a competitive marketplace and in the interests of the consumer’. Note that that opinion is from August 2004, exactly two years ago. The minister and her government were lobbied very hard by big media interests in the late 1990s to ensure that the digital spectrum would be used only for high-definition television rather than multichannelling and datacasting. Everyone knows that high-definition television takes up substantial spectrum space and leaves too little room for multichannelling or datacasting or, to put it bluntly, more competition.

As the ACCC said in its 2004 report, the burden to prove that the benefits of a restrictive regulatory policy outweigh the costs should be on those who do not want change. The policy arguments put forward by the free-to-air television channels, except Channel 7, all supported high-definition television as the appropriate use of spectrum space and argued against multichannelling. The government’s current and proposed media policy do not allow open competition in the marketplace and do not provide conditions where a diversity of voices can be heard. Multichannelling would allow for diversity, it would allow for a relatively low entry cost into the media market—as would datacasting—and it would open the media market to niche competition.

So why until now has the government not supported multichannelling? Again, it is because the free-to-air media owners, looking at the American and British experience, knew that the coming of pay TV and satellite TV, along with broadband, would impact on their revenue streams. So the big media owners bought into pay TV and demanded that the government create a regulatory system that would allow them to get on their feet. That is not an uncommon position for people to advocate, and it has a long precedent. They demanded that the government implement policy which was at odds with the immediate opening of a free and competitive market. They did not want multichannelling in the metro areas because that would have been a threat to their immediate advertising revenue. That fear is apparently not borne out by independent studies into other media markets—the Australian market is a distinctive one—but that has not stopped the big players from arguing the point. So the free-to-air outfits fight over football rights and the antisiphoning list, but the bigger picture is missing. I know the government has been looking at it, but I know the government is also very alert to the sensitivities that surround this whole area.

So who benefits from high-definition television broadcasts? Just about nobody probably, except free-to-air television stations. They clog up the spectrum and keep competition at bay. I am really not too sure what benefits consumers get out of them. In 2004 the Seven Network commissioned a study of digital terrestrial television, known as DTT, by Spectrum Strategy Consultants, who are independent international consultants in media. The study pointed out that most mature television markets have multichannelling. More importantly, the consultants believed:

… if commercial free to air (FTA) broadcasters resisted the market evolution in Australia it would be contrary to the interests of consumers and detrimental to the Australian broadcasting market.

That is on page 1. When the government put forward the digital framework in 1998, they excluded multichannelling from consideration. This was not because they believed that multichannelling was bad for consumers, bad for the local production industry or bad for advertisers; it was simply because they wanted to protect the fledgling subscription television industry. If that was the motive then and it is okay to lift it now, why just lift it in one sector of the market? Surely it is time to lift it throughout the market.

The participants in that fledgling industry were of course PBL and News Ltd, along with the now semi-government-owned Telstra, sometimes described—by government members and by others—as an albatross around the neck of government. This government has shown itself to be the friend of big media owners, and so have past governments. The government likes to help out, where it can, to make conditions surrounding any new media ventures conducive to success for these media companies run by the media families, especially if they turn out to be quite helpful in getting a government elected. Again, it might be unkind to impute such a motive, but if anyone studying media does not think that in the minds of politicians the attitudes and predilections of the media families are not vital then they are not aware of how the democratic process works, not only in this country but in most democracies. We all realise that that is not the working of a competitive marketplace. That gives some of the players an advantage while others are paralysed by regulation or legislation which has insufficient or no good public policy reasons behind it.

In 1998 the subscription TV industry might have been considered a fledgling one. In 2006, in the first week of January, I note that Foxtel posted an operating profit after interest and tax for the first time. I should confess that I am a Foxtel subscriber, and I think they provide a very good service. So the government’s cotton-wool approach to Foxtel has paid off; the company is in the black. With the proposed new media framework in the wings, the government is now, with this bill, moving tentatively towards multichannelling and, hopefully, it will do so in the metropolitan area at large.

There are arguments that multichannelling impacts on advertising revenues for free-to-air stations—probably it does. But why should free-to-air stations receive treatment different from others in other industries and other sectors in the marketplace? Competition is widely promoted as a desirable fact of life in Australia, and the competing access to media means that free-to-air stations will simply need to work smarter and harder or diversify their product to retain consumer support and to therefore attract the revenue that is necessary to survive. No industry should expect long-term favourable treatment from the government, certainly not in return for what might be anticipated to be favourable television coverage of government politicians and issues.

The recent House of Representatives Standing Committee on Communications, Information, Technology and the Arts report Digital television: who’s buying it? recommends that the program restrictions on multichannelling be removed no later than 2007—and that is only a couple of months away now. That is a fine idea and one which the Democrats support. However, everyone knows that multichannelling is a hard thing to achieve if there is not enough spectrum space. With the current requirements to provide the analog signal and high-definition television, there is too little spectrum space available to enable much multichannelling to happen.

As the ACCC pointed out in its submission to the Department of Communications, Information Technology and the Arts in 2004, any changes to regulation regarding the spectrum had to be dealt with as a whole and could not be addressed in an ad hoc manner. That is essentially a situation that has been widely understood within the committee that deals with this and indeed in the remarks of the shadow minister, and certainly the minister and her staff are not blind to that issue either.

This legislation gives an exemption to licensees in remote areas from providing high-definition television and it enables them to multichannel. It is unclear to the Democrats why the government cannot implement a similar policy in metropolitan areas to achieve the same ends or, at the very least, outline a timetable by which this can happen. However, I will conclude on a very positive note—that is, that we welcome this bill and, of course, because of its particular effects on Western Australia, as a Western Australian senator I particularly welcome the bill. I look forward to the committee stage.