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Tuesday, 10 October 2006
Page: 121

Senator ALLISON (Leader of the Australian Democrats) (10:15 PM) —As the Australian Democrats have pointed out on numerous occasions, we do not oppose media industry reform. In fact, we strongly support the modernisation and improvement of statute and regulation with respect to media industry if this is coupled with greater competition and genuine diversity. In his speech on the second reading my colleague Senator Murray covered the important issues of concentration of media ownership, its impact on democracy and the need for greater competition and safeguards. I want to focus on the need for greater access to new technologies to provide the necessary diversity to protect our democracy and the failure of this package of bills in achieving this.

As we noted in our minority committee report, we recognise that technological and market changes that have taken place in the media and in technology over the last 10 years—at increasing speed, I might say, over the last five years—make it imperative that media law and regulation keeps pace with the market and technology and creates a sensible and effective forward-looking regulatory environment for the future. It is our view, however, that if we are to modernise media markets the government must pursue policies to increase diversity of views and voices as well as consumer choice. That means improving the use of and access to new technology, particularly digital and broadband, and ensuring open access to media content. As my colleague Senator Murray said:

Failure to protect diversity of viewpoints is a failure to protect the necessary public debate that makes our democracy function ...

Failure to provide access to new technology is a failure to protect diversity.

The government has argued that cross-media ownership reforms can now be relaxed because of access to new media forms and the internet, but we say the government has exaggerated the extent of the impact that the internet and so-called new media has and will have in the short term on credible information supply in contrast to traditional media. This is because the government has not supported the development of these technologies. In November 2005, a Roy Morgan poll found that 48 per cent of Australians have television as their main source of information, 22 per cent get their information from newspapers, 19 per cent access it from radio and only eight per cent get it from the internet. The internet market share data from ACNeilsen shows that Australian content on the internet is now more concentrated than in the old media of newspapers, magazines, radio and TV.

Given this data, the Democrats believe there is a good case for arguing that cross-media laws should not be changed until full digitisation has been achieved, more spectrum is available to enable new entrants and the range of new services provided by new technology is more mature and utilised by more consumers. In this respect much more needs to be done. While we acknowledge that there are many aspects of the media package before the parliament that will go a long way towards modernising the media market and providing more consumer choice—such as access to multichannelling, additional digital channels and removing genre restrictions to the national broadcast—more could have been done. This package does not do enough to improve competition and diversity.

For example, there is no fourth television station. The digital reforms are too slow and do not go far enough, and there is nothing in this package to address the role of Telstra. Much of the technology for media delivery in the future—and that future, I think, is not very far away—will be on telecommunications platforms. That being the case, it is essential for telecommunications and media that we establish guaranteed affordable services available to all but the remotest Australians and enforced through legislated consumer service obligations. As we noted in our minority report, this media package fails to acknowledge the pivotal role of the telecommunications industry in the provision of media content and access in the future. This is a big hole that should have been addressed.

There is no mention of Telstra and how its privatisation feeds into this debate. In our view, it is not possible to debate media regulation or access and content in a vacuum that excludes telecommunications. You must also debate telecommunications infrastructure and access along with it. Competition has improved in the telecommunications markets over the years, especially in mobile phones, but Telstra, with its ownership of the copper network and hybrid fibre-coax cable—which, of course, is used for pay TV and broadband delivery—is still the dominant player in most other telecommunications markets. Telstra also owns a significant share in Foxtel, giving Telstra a potentially dominant position in the new media market.

In the 21st century, one of the most important delivery systems of media content is the internet, which is why telecommunications and media are absolutely intertwined. It provides access to the most diverse range of media content, but, of course, much of rural and regional Australia will miss out on this access because of the lack of telecommunications infrastructure to deliver high-speed broadband access.

Recently, telecommunications expert Paul Budde told Meet the Press that it is likely Telstra will only roll out fibre to the metropolitan areas, leaving rural areas in the lurch. I think it is a great pity that National Party senators have not pushed very hard on this issue since their constituents are so affected. In May this year the head of the ACCC, Graeme Samuel, told an audience:

Once the proportion of Australians connected to reliable, high speed broadband reaches a critical mass, new business models centred on the provision of new and innovative digital services could break down the barriers between traditional print, audio and audio-visual media silos.

Again, in August, Mr Samuel said:

Equipped with a high speed broadband internet connection, anyone in Australia can access the widest range of news, information, analysis and entertainment, including digital versions of traditional newsprint articles, radio broadcasts and television programs.

Clearly access to high-speed broadband will be critical if Australians are to benefit from new media markets that the government argues will deliver the diversity of views and voices.

The ACCC has also raised concerns about content. Mr Samuel in his August speech said:

As technology advances and take-up of broadband continues, how people access the content they desire, and at what speed, will increasingly be determined by the control of the telecommunications networks—the pipes—connecting homes and business.

As the pipes are increasingly able to deliver a wide range of content to consumers, the question of who controls the content, especially premium content such as sports and new release movies, will become a key question in assessing competition.

The ACCC also indicated that they want to ensure the technology bottlenecks are monitored closely so that they are not used to lock content competitors out of the marketplace. Some have speculated that the ACCC could try to limit Telstra’s ability to become a content provider while it owns and operates a dominant broadband network. The ACCC also raised concerns about Telstra buying exclusive rights to specific content like sporting events because of concerns that it will use exclusive content rights to reduce competition in the broadband and mobile telephone markets.

The issues raised by the ACCC have been largely ignored by the government, not only with respect to media reform but also with the sale of Telstra and telecommunications competition in general. When the sale of Telstra was negotiated by The Nationals, the media side of Telstra was totally neglected. I think that is a great pity. It is a shame that nobody reminded the National Party negotiators that telecommunications is the way to deliver media diversity in the 21st century. It is fine to talk about local news but people in country areas also need to be connected to the broader world.

In fact it is laughable that The Nationals are concerned about the impacts of media reforms on regional and rural areas when they sold off Telstra. If they had wanted to maintain media diversity, particularly in rural areas, they needed to keep telecommunications infrastructure in the hands of government. They voted not to do that, so there is no point, in our view, shouting about diversity now. It is rather too late for that.

The Democrats have argued time and time again that Telstra should at a minimum be forced to divest Foxtel and its HFC cable. This stance supports the ACCC’s view. It would open up more competition in the market. The ACCC has argued that Telstra, in protecting the revenue of both the copper wire and the HFC cable, would only invest in services that would cannibalise the revenue of the other network. Divesting Telstra of its cable would improve broadband competition and provide greater access to media technologies and content to all Australians, including those in the bush.

As I said earlier, the Democrats are also concerned that the digital reforms are too slow and do not go far enough. The government has on a number of occasions failed to meet the simulcast deadline, and we have serious doubts that this current package will deliver. The minister and her government were lobbied very hard by big media in the late 1990s to ensure that the digital spectrum would be used only for high-definition television rather than multichannelling and datacasting. The free-to-air TV channels, except for Channel 7, have continued to support high-definition TV as the appropriate use of spectrum space and have argued against multichannelling. The problem with high-definition television is that it takes up substantial spectrum space and leaves too little room for multichannelling and datacasting—or, to put it bluntly, more competition.

In 2004 the Seven Network commissioned a study of digital terrestrial television, known as DDT, by Spectrum Strategy Consultants, who are independent international consultants in media. That study pointed out that most mature television markets have multichannelling. More importantly, the consultants believed:

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

The Democrats believe 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.

Recently the Senate passed the Broadcasting Legislation Amendment Bill (No. 1) 2005, which enabled a regional Western Australian television station to multichannel and be exempt from mandatory high-definition TV quotas. During his speech in the second reading debate on that bill, my colleague Senator Murray asked why this provision applied only to remote areas of Australia and why it cannot be enforced nationally and in the major metropolitan areas. He stated that it was possibly because the commercial television interests in large metropolitan areas have lobbied the government so long and so hard that it does not dare move a muscle or make an amendment that would in any way get its media allies offside. It is my understanding that this issue was the sticking point that almost prevented the package from being introduced into the parliament.

A recent House of Representatives Standing Committee on Communications, Information Technology and the Arts report, Digital television: who’s buying it?, recommended that the program restrictions on multichannelling be removed no later than 2007. Clearly this recommendation has not transpired and not made its way into this package. The Democrats believe that the mandated high-definition TV quotas should be removed sooner than the end of the simulcast period in order to free up broadcasting spectrum for the other digital services and that all restrictions on multichannelling coincide with this date. It is our strong view that cross-media laws should not be changed until competition is improved. Telstra has been divested of its interest in Foxtel and the HFC cable—

Debate interrupted.