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Tuesday, 10 October 2006
Page: 104


Senator LUNDY (8:57 PM) —Labor is, of course, opposing the Broadcasting Services Amendment (Media Ownership) Bill 2006. Like my colleagues, I am gravely concerned about the effects that this bill will have on media independence as well as the diversity and quality of local content in Australia. I note with interest the rhetoric of the government. It talks about providing ‘greater flexibility’ and dealing with ‘outdated and meaningless legislation that is 20 years old’. I challenge the government by saying that these are hollow words. What does ‘greater flexibility’ mean in this context? It only means one thing and that is permission to further consolidate and concentrate media in markets around Australia. With the way that these laws have been drafted, that is the only thing that ‘greater flexibility’ could possibly mean. It has also used the words ‘outdated and meaningless’, as though time itself has rendered this legislation outdated and meaningless. It is actually the substance of the cross-media laws, the current laws, that remain precisely relevant and meaningful in this current debate. To somehow drag up that they are 20 years old as evidence that they are meaningless I think is shallow and spurious.

The bill really constitutes quite a shameful attempt by the Howard government to weaken the laws. It undermines existing cross-media ownership laws that are designed to protect media diversity in Australia and within Australia’s regions. It will cause and, I suspect, hasten and encourage a further concentration of media in Australia. Having fewer media outlets means a reduction in diversity. This, first and foremost, is unhealthy for democracy, because it means that the community can access fewer news and current affairs sources, journalistic commentary and opinions. Later on I will also provide a comment on the Broadcasting Legislation Amendment (Digital Television) Bill 2006.

The current laws relating to media ownership prevent the common ownership of newspapers, free-to-air television and radio licences in the same market, in the same region. Their purpose is to ensure a diversity of ownership across the most influential media by preventing those same organisations from controlling a multiple of platforms. This has the effect of ensuring that a wider range of news, information and opinion can be accessed by the community.

The Minister for Communications, Information Technology and the Arts, Senator Coonan, has tried to convince the Senate on several occasions that changes to cross-media laws are in the interest of consumers. However, the minister has always failed to back up her claims with any evidence. It was with the typical arrogance of a tired old government that the minister resorted to quite insulting and illogical arguments to try to garner support for these bills. The government’s arguments in favour of these changes are insulting because it is obvious to anyone seriously observing this debate that the government is shamelessly trying to placate some of the largest incumbent media interests in their ongoing clamouring to have the current cross-media constraints removed—because those interests see them as constraints to making their businesses bigger and more profitable.

It is hard to fathom the front of the minister when she claims that these changes are designed to help consumers, when even the farcically short Senate inquiry could not identify any consumer benefit. All we got were these amorphous claims about flexibility and economies of scale, all of which benefit the big businesses that are already incumbents in these markets. They were not able to point to anything else. The beneficiaries, we know, are those big incumbent businesses in the media.

It is so insulting that these arguments are put forward that it is easy to make the observation that they come from a government that is so arrogant that it does not even bother to try to make a reasonable case. What we are left with is this exercise of negotiation between National Party and Liberal Party senators, as though somehow that makes up for the massive change that they are trying to impose.

These changes will open the floodgates for media mergers and acquisitions because the rules will allow for fewer voices or separate commercial media outlets than currently exist in many markets. You have heard from my colleagues, right through this debate so far, about the extent to which those voices could be reduced in both metropolitan and regional markets. The result will be less variety for consumers, not more. Nowhere will there be more voices.

As we have heard, if for some reason there are four voices and some of those voices go out of business, there is no mechanism to create more voices. So there will be a perpetual ratcheting down of the number of media voices in this country, with no scope for new entrants, because the inevitable consolidation in these markets will make it even harder for new companies to get a foot in the door of a new market. And yet the minister illogically insists on this being good for consumers. Last time I looked, less was bad news for consumers, not good news as the minister purports.

Another insulting argument put forward by the minister is that these changes will make it easier for new providers to enter the market. We heard this put forward at the Senate inquiry. We have heard the minister say that, but how can it be so when all of the activity will be in mergers and acquisitions. Surely the market will dictate that new players will ultimately have fewer opportunities as incumbent players get bigger, consolidate and purchase or take over smaller ones. It does not sound like a good scenario for a small entrepreneurial outfit trying to establish themselves in the media market.

The other big porky the minister is trying to peddle is that the internet has resolved the need for cross-media restrictions. The minister claims that the internet ensures that people can get a wide variety of media from an almost infinite number of sources. This shows how out of touch the minister is with what is going on with the internet. Again, I know several of my colleagues have pointed out that the top four news sites—which account for 84 per cent of hits—for people accessing news on the internet in Australia belong to Fairfax, News Ltd, the ABC and PBL respectively. So what the internet provides—and this was confirmed very strongly by the ACCC during the Senate inquiry—is another platform for the same players. It does not represent diversity at all. When the minister suggests that it does it shows that she is choosing to ignore these facts and figures or she is choosing to mislead the Australian public about the role the internet plays in the provision of news and current affairs and information services to Australians.

Labor has always supported sensible media reform, but what is being proposed here today is not reform. I reject completely the arguments put forward by the government that this is somehow the next natural step in media reform; it is not. It is an effort to placate the needs of some of the largest businesses in this country. The practical implications of these changes will lead to a further concentration of the ownership of the most influential media and this will result in an increase in the power of some of the most powerful companies in the country. This does not enhance democracy. It is likely to diminish it, and Labor believes it is certainly not in the public interest.

I would like to turn to this concept of media diversity. It is quite central to the debate and we think it is worth preserving because it is an essential element of any functioning democracy. An effective democracy requires that issues relating to politics, policies, governance, administration, events, and public and community life be reported in a fair, transparent and quality manner by the media. Deliberately reducing the number of media players performing this role to a few powerful entities in a given community, as this bill intends to do, will diminish the variety of ways that news, information and opinions are presented to the public. Less variety means less competitive pressure to maintain quality content—and so the spiral cycles downwards.

Media diversity is also important to citizens as members of geographic communities. The public interest is served by ensuring they have access to newspapers, television and radio programs that cater to their local needs and interests as well as to their broader thirst for information about national and global affairs. Again, less variety means less competitive pressure to maintain a high proportion of relevant localised content. The alternative is only being able to access what a few big media entities think sells—purely commercial considerations. That is when you get the syndicated news and the ‘rip and read’ approach to news, particularly on radio.

So much of the news and information reported, analysed and distributed is already syndicated, or shared, and this aspect of media business—news reporting—is expensive because it requires skilled human beings to do it. The Senate inquiry heard that news is often the first to go in any merger or takeover of smaller media companies. That is because the motivation is not about communities or their interests; it is about economies of scale—the one thing the minister has said which is accurate but which, for the purposes of this debate, means newsrooms being merged, reporters being sacked and genuine local content reduced.

We have heard government senators purporting that these bills provide safeguards to try to ensure some media diversity will be maintained, but these safeguards are woefully inadequate. I have already mentioned the voices test, and I want to go into that in a bit more detail. This so-called diversity of voices test, or five-four test, provides a minimum number of distinct commercial media entities in a given market: four in regional markets—a definition which includes the ACT, my electorate—and five in metropolitan markets. As I said, a quick count of the number of existing players in regional and metropolitan markets will expose the fact that this test can only result in a reduction of players, because so many markets have more. This renders this measure completely ineffective as a safeguard for diversity. It is a complete con.

Using this test, the numbers of media owners in metropolitan areas like Sydney or Melbourne could halve, and in many parts of regional Australia the number of media owners could fall by a third. So what a fraud this test is and how arrogant of this government to even serve up the five-four voices test as some sort of safeguard. Not only will the five-four test allow for media ownership to be concentrated; it fails to take media influence and reach into account. Some mergers would have little impact on local media, whereas others—for example, between a sole local paper and the leading television station—would profoundly disrupt the news culture of any given community. However, the five-four test fails to distinguish between the two. Any subsequent two out of three test, such as the one we are hearing about in the form of proposed amendments, is unlikely to mitigate the possible negative effect on diversity of the five-four voices test in the sort of scenario I have described.

In recent times, including at the Senate’s cross-media inquiry, the ACT has provided a useful case study of a regional community that in certain circumstances could have less media diversity as a result of the new laws. The submission from the Communications Law Centre reflected on a hypothetical scenario to demonstrate how ineffective the five-four rule would be in a regional community like Canberra. I quote from the submission:

Hypothetically, Canberra Times merging with Southern Cross TV (Channel Ten) would potentially be one point under item 5; Capital Radio merging with Austereo would potentially be one point; and Prime TV … and WIN … would potentially count for a point each. The Bill does not recognize that by having the local paper potentially share content (due to ownership by the commercial television broadcaster), the quality and diversity of news coverage is potentially diminished in the region. The Bill does not recognize the importance of an independent source of news in a print format.

I also want to discuss the role of the ACCC under the bills we are discussing. When questioned about the very real effects these changes will have on competition and diversity in the media industry, the minister has been quick to identify the ACCC as being the responsible entity to implement competition and therefore diversity policy. The government has claimed that the ACCC’s administration of the Trade Practices Act will be a safeguard against excessive concentration in media markets, but we now know, thanks to the painfully short Senate inquiry, the ACCC is no substitute for the current cross-media laws.

Senator Conroy notified the Senate on 14 September of this year that a number of leading competition lawyers had seriously questioned the ACCC’s capacity to stop significant media mergers. Historically, the ACCC has considered that newspapers, radio and television operate in separate markets and, as such, a merger between these businesses would not technically breach competition laws. Even in the event that the ACCC does find that a merger breaches the Trade Practices Act, the Federal Court may overturn the decision. Labor believes media independence and diversity are too important to leave to the vagaries of such interpretations of the law. The current cross-media laws provide a guarantee of media diversity that the ACCC’s enforcement of the Trade Practices Act simply cannot provide.

The bills also introduce measures imposing obligations on regional broadcasters to comply with local content rules, and it became clear very quickly that this had not been discussed with any of these businesses—so much so that everybody was concerned that that would have a negative effect on the government’s attempt to make a sop to the National Party about provisions for local content. They were operating in a vacuum—and indeed still appear to be in the construction of new proposed amendments.

A constituent recently emailed me—actually, it was during the Senate inquiry; they were obviously listening to proceedings. I would like to place their observations on the record, as I think they are relevant to the debate. They wrote:

When I was growing up, 2BE Bega broadcast to the people of the Bega Valley: pig and bobby calf sale prices, local river heights, even the prices at the local co-op. This was information of no importance or interest to people beyond the Valley.

But to people within the Valley it was information that was directly relevant, that was both important and interesting.

Today 2BE is East Coast Radio, broadcasting from Eden to Bateman’s Bay. Localism has been killed. It has been replaced with regionalism, with aggregated markets. Localism has been lost, with areas homogenised into advertising demographics. That’s the point about localism. You can’t expect the people of Malua Bay to have the same ‘local’ interests as, say, those at Pambula.

So you can see how localism is interpreted according to the perspective of this particular individual, and I think this person had a valid point. The bills fail even at this most basic level to adequately protect or define true local content. No amount of red tape with additional regulations or window-dressing with all of the flowery rhetoric can make this bill a satisfactory replacement for the current cross-media laws.

I will now spend a few minutes making comments on the Broadcasting Legislation Amendment (Digital Television) Bill. Unlike the media ownership bill, there are some positives for consumers in the digital television bill. It will provide for some additional digital channels, theoretically making digital television more attractive to consumers—and we know the Howard government has been quite appalling in its efforts to try and encourage people to switch to digital. I say ‘theoretically making digital more attractive’ because, true to form, the Howard government has also compromised its claimed intent to make digital more attractive. The compromise is that, while this bill appears to make progress in promoting digital broadcast services, it is unlikely to dramatically increase the take-up of digital television.

The decision to lift genre restrictions on the multichannels of the ABC is strongly supported by Labor. It is a policy that the opposition has advocated since before the last election. Our minority report notes several important points about the extra channels and interactive services, including the fact that in the UK they seem to have made an important contribution to generating consumer demand for digital television. (Time expired)