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Tuesday, 10 October 2006
Page: 65


Senator STEPHENS (5:02 PM) —We finally get to debate the Broadcasting Services Amendment (Media Ownership) Bill 2006 and the Broadcasting Legislation Amendment (Digital Television) Bill 2006, and the provisions of the Communications Legislation Amendment (Enforcement Powers) Bill 2006 and the Television Licence Fees Amendment Bill 2006. It has been a long time coming and a great deal of confusion has reigned over the last few days. It is a comprehensive suite of bills—very complex and highly controversial.

The media plays a fundamentally important role in Australian society. There is no way for Australia to have a healthy democracy without a vibrant, diverse and competitive media sector. The centrepiece of the government’s package is its plan to relax the media ownership provisions in the Broadcasting Services Act, the BSA.

The media ownership bill makes two key changes in this regard. Firstly, it proposes the repeal of the specific foreign ownership provisions in the BSA that relate to commercial and subscription television. The government will retain the ability to screen foreign investment in the Australian media under the Foreign Acquisitions and Takeovers Act 1975 to ensure that it is in the national interest. Labor supports these provisions of the bill. There is already substantial foreign investment in radio, newspapers and television. Foreign investment offers the potential to offer new players into the market and to increase media diversity. In contrast, Labor opposes the provisions of the bill which weaken the current cross-media ownership laws, and I will move to those reasons shortly.

The digital television policies that the government has pursued to date have manifestly failed to rapidly move Australia to the point where analog broadcasts can end. According to industry data, only around 20 per cent of households have purchased the necessary equipment to receive digital free-to-air broadcasts. There are a range of factors that explain the poor level of take-up. Undoubtedly, a significant problem has been the fact that the regulatory regime has simply failed to provide consumers with significant incentives in terms of additional content.

The digital television bill contains a number of measures which relax the regulatory regime and will increase the appeal of digital television to consumers. Labor welcomes these initiatives. Nonetheless, the introduction of these bills has been a debacle from the start. These measures have almost no support from the general public, consumer groups or staff associations. It is no surprise that almost all the support for these changes came from media proprietors only. This is just another example of the Howard government’s extreme agenda, which it is determined to inflict onto the Australian people.

But perhaps we should feel sorry for Senator Coonan’s plight. After all, as Matthew Ricketson wrote in last Saturday’s Age newspaper:

Media policy usually looks like a patchwork quilt lying on top of a dead cat.

Yet Senator Coonan has shown she is prepared to anger media companies over legislation with no public support. Since the government flagged these changes, we have seen a communications minister who appears to have no understanding of the purpose of cross-media laws or the fundamental role those laws play in protecting media diversity.

The Senate inquiry into media ownership has been nothing short of farcical. The government has used its numbers to restrict the amount of time available for senators to question witnesses, and many groups missed out completely on the opportunity to give evidence on what are the biggest changes to media law in 25 years. During the hearings, the tension between some senators exploded to the surface as some coalition senators expressed doubts about the Howard government’s media reform agenda. We even witnessed one coalition senator storm out of the committee room in disgust.

Media diversity and media independence are an integral part of our democracy, and blind Freddy could see that democracy will suffer if ownership is concentrated in the hands of a few media moguls. Never has this been more important than in this age, when the government uses its executive power to reduce the scrutiny and accountability it must face. Senator Coonan’s so-called diversity test, requiring at least five voices in major cities and four voices for regional areas, will not and cannot maintain diversity. In some major cities we will see the number of separate players go from 10 down to five. In my state of New South Wales, rural and regional areas will be particularly hard hit by the changes. Dubbo, for example, will see the number of separate players reduced from six down to four. Newcastle will experience a reduction from the current seven separate players down to four and in Orange the current six separate players will be reduced to four.

Australia’s few remaining independently owned regional media networks are at grave risk. If one company were to own television, radio and print press, they would be a formidable organisation. Who does this benefit? Certainly, it does not benefit the consumer. Variety of new services, editorial independence and competition between advertisers is healthy for local democracy and local issues. The reality is, if these measures pass the Senate, there will be a concentration of media. If these independent regional media outlets are not allowed to grow but rather are merged into large conglomerates, it is highly likely that there will be significant job cuts in regional Australia.

The dominant sources of news and opinion for Australians remain those which are produced by television, radio and newspaper companies. Local content requirements on regional radio will not protect media diversity if the news just comes from the local newspaper owned by the same company. Independent Regional Radio Broadcasters, a body representing 73 commercial radio services in regional Australia, predicts that the government’s proposal could result in a single dominant media company emerging in 47 areas of rural and regional Australia. Regional media organisations will be forced to focus increasingly on the cost side of the business, and local input such as news services would be wound back or cut completely. Not only will regional Australia suffer with job losses but a lifeline of information and entertainment will be severed. This parliament should be seeking to maintain a genuinely regional media that is run by and for regional interests instead of seeking to concentrate all media in this country in only a few hands.

The government has placed blind faith in the ability of the ACCC to stop media market concentration, but the capacity of the ACCC to stop cross-media mergers has been disputed by leading law firm Phillips Fox. In its November 2005 publication Merger monitor: focus on media mergers, Phillips Fox challenged the view of the ACCC Chairman that the Trade Practices Act prohibition on anticompetitive mergers could be applied to stop cross-media mergers. As well, the Productivity Commission in its review of broadcasting regulation stated that:

It is clear that the Trade Practices Act as it stands would be unable to prevent many cross media mergers or acquisitions which may reduce diversity. It is also clear that the adoption by the ACCC of a broader definition of the media market would not adequately address the social dimensions of the policy problem, and would be open to legal challenge.

The reality is that the ACCC will have little control of media mergers. It is clear the Trade Practices Act is not strong enough in its present form and it needs changes that will give it teeth to protect consumers from anticompetitive abuses of market power. I note that this issue consumed quite a large proportion of the committee’s report, and an extended discussion of the issues around the ACCC is documented in that report.

Senator Coonan is out of touch with reality if she believes that the internet is having an impact on media diversity. Very few Australians turn to the internet for news and information as opposed to entertainment. When Australians do turn to the internet for news, they overwhelmingly go to the websites owned by the traditional media players. Studies undertaken by Roy Morgan Research show that, despite the rise of new media over the past decade, only a very small proportion of Australians rely on the internet for news and current affairs. Other findings of that research were that on average only 14 per cent of the time that Australians spend on consuming media is devoted to the internet, compared to 44 per cent on television and 32 per cent on radio. Television, newspaper and radio are the main sources of domestic news and current affairs for over 95 per cent of the population. By comparison, only three per cent of people say that the internet is their main source of domestic news and current affairs.

Around 75 per cent of the population never or rarely use the internet to obtain domestic and international news, and of the roughly 25 per cent of the population that access the internet on a reasonably regular basis for domestic news and current affairs approximately 90 per cent rely on a small collection of websites that have a close association with traditional media providers. It is estimated that as little as one per cent of Australians rely on an alternative media provider as their main source of news and current affairs. The Roy Morgan Research report is quite extensive and it provides a real insight into the use of the internet for news and current affairs sources.

But, to the extent to which internet based news and current affairs is a source of news and comment, it is more than the old media repackaged. The reality is, despite Senator Coonan’s assertions to the contrary, that new media adds virtually nothing to the diversity of news and current affairs in Australia. That is a furphy of an argument. It just does not hold up. Senator Coonan’s view that the cross-media laws are stifling growth and investment opportunities for traditional media companies is also wrong. Our media companies already invest in online businesses and pay television and have distribution deals for their content on mobile phones. During the Senate hearings, the Chairman of the ACCC said:

… the internet is simply a distribution channel. It has not shown any significant signs at this point in time of providing a greater diversity of credible information and news and commentary.

The laws at present stop one person from owning a newspaper, a radio station and a television in the same market. For the sake of the health of our democracy, it should remain that way. Even the minister’s own department has admitted one proprietor could control a local television station, a newspaper and a radio station in a regional area.

The government believes its legislation will guarantee at least five media operators in capital cities and four in rural and regional centres, but the Department of Communications, Information Technology and the Arts admitted that the guarantee was not ironclad. Officers from the department confirmed that, if there were four players in a regional market and one player owned television, radio and newspapers and the other three players were to go out of business, there could then quite feasibly be only one remaining proprietor who would own the television, radio and newspapers. If such a scenario were to eventuate, the impact on local democracy and media diversity would be immeasurable.

The free exchange of ideas and opinions cannot be assured in a modern society if the primary forms of media are controlled by a small number of people. When media ownership is concentrated in the hands of a few proprietors, it undermines the capacity of citizens and institutions to share information and opinions and it places media proprietors in a position to exert undue influence on public opinion, on politicians and on democratic processes.

The Broadcasting Services Act 1992 is intended to guard against the risks associated with the monopolisation of media markets. This objective is achieved by placing restrictions on the concentration of ownership of the main types of media—radio, television and newspaper—in particular geographic areas, through a system of licensing. The relevant provisions of the Broadcasting Services Act can be divided into two categories—concentration of control and cross-media. The concentration of control provisions prevent a person from gaining control of a specific type of media in a market. The cross-media provisions restrict the capacity of a person to control two or more different types of media in a market. The aim of these provisions is to prevent undue concentration in media ownership so as to ensure diversity of content and opinions in the public sphere.

Despite the operation of the Broadcasting Services Act, by OECD standards the Australian media industry is already heavily concentrated. News Ltd and John Fairfax dominate capital city newspapers, controlling more than 80 per cent of the market. In capital city radio markets, four companies dominate, while three corporations control the majority of capital city and regional television audiences. Relaxation of the cross-media ownership laws will result in a further concentration of media ownership, which would have repercussions for the integrity of Australia’s democracy.

The tendency for people to rely on traditional media for news and current affairs is also more pronounced in regional areas. Thirty per cent of people in regional areas have never accessed the internet, compared with 21 per cent in capital cities. Moreover, 22 per cent of people in regional areas are heavy commercial television users compared to 18 per cent in capital cities. Similarly, there is also an 11 percentage point difference in heavy internet usage between capital cities and regional areas. These figures suggest that the diversity of information and opinions will be more negatively affected in regional areas than in capital cities if there is an increase in the concentration of media ownership as a result of changes in the regulatory framework.

These concerns are widely held in the Australian community. A Newspoll survey conducted in 1995—10 years ago—asked respondents whether they thought it important that ‘there should be a lot of different proprietors of Australia’s media’. Seventy eight per cent of respondents thought at the time that it was important, with support for this position being consistent across age groups and socioeconomic status.

Writing in the Sydney Morning Herald on 29 September 2005, former Prime Minister Paul Keating—the architect of the existing laws—said:

... policy changes of this kind are always sold on phoney arguments and an almighty sleight of hand.

It would seem—from what we have seen in this report, in the process of the Senate inquiry and from the debacle that has been represented over the last few days as the government tries to negotiate around amendments and proposals—that Paul Keating was certainly correct.