Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Broadcasting Services Amendment (Media Ownership) Bill 2002

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

 

2002-03

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

SENATE

 

 

BROADCASTING SERVICES AMENDMENT

(MEDIA OWNERSHIP) BILL 2002

 

FURTHER SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

Amendments and New Clauses to be Moved on Behalf of the Government

 

 

 

 

 

(Circulated by authority of the

Minister for Communications, Information Technology and the Arts,

Senator the Honourable Richard Alston)



GOVERNMENT AMENDMENTS TO THE

BROADCASTING SERVICES AMENDMENT

(MEDIA OWNERSHIP) BILL 2002

OUTLINE

The Broadcasting Services Amendment (Media Ownership) Bill 2002 (the Bill) amends the Broadcasting Services Act 1992 (the BSA) to reform the foreign and cross-media ownership regime in Australia.

The Bill removes regulatory barriers to investment by foreign entities in Australian media which are contained in the BSA.  This is expected to broaden the scope for increased competition and improve access to capital and technology.  Foreign ownership of commercial television and subscription television interests continues to be regulated by the Foreign Acquisitions and Takeovers Act 1975 in the same manner as for commercial radio and newspapers.  

The Bill authorises the Australian Broadcasting Authority (ABA) to grant cross-media exemption certificates on application, where the ABA considers that the objective of editorial separation will be satisfied.  Three mandatory tests are prescribed for the objective of editorial separation to be met.  They are the existence of:

(a)            separate editorial policies;

(b)           appropriate organisational charts; and

(c)            separate editorial news management, news compilation processes and news gathering and interpretation capabilities.

These requirements do not prevent the sharing of resources or other forms of cooperation between jointly-controlled media operations.

Existing limits in the BSA pertaining to audience reach and the maximum numbers of commercial broadcasting licences that can be controlled in the same licence area are not affected by the Bill.

The Bill requires regional broadcasters, in relation to which an active cross-media exemption certificate applies, to maintain existing levels of local news and information, or to provide a prescribed minimum level of local news and information services, whichever is the higher. 

The Senate Environment, Communications, Information Technology and the Arts Legislation Committee considered the Bill and reported on 18 June 2002.  The Committee recommended by majority that the Bill be agreed to, subject to certain amendments.  The House of Representatives passed amendments resulting from the Committee’s recommendations which:

·         impose a general obligation to disclose a cross-media relationship on media outlets subject to the same exemption certificate; 

·         provide that a cross-media exemption in regional areas can only authorise cross-ownership in two of the three types of media (television, radio and newspapers) covered by the cross-media rules - this provision acknowledges that regional areas frequently have comparatively fewer choices of media outlets than in metropolitan Australia.

The Bill as amended also prohibits contracts and arrangements which restrict the program format of commercial broadcasting radio services.  These provisions are intended to address a situation where for commercial or other reasons a person acts in a manner which limits or restricts the diversity of commercial radio broadcasting services of broad appeal available within a licence area.  A related concern is a potential reduction in competition for audience and advertisers, which could result from program format restrictions.

Proposed Government amendments

The Government proposes a number of further amendments to the Bill. 

Material of Local Significance (amendments (1), (2), (11) to (20) and (23) to (28))

Amendments (1), (2), (11) to (20) and (23) to (28) replace the local news and information obligations for commercial television broadcasters subject to a cross-media exemption certificate with a requirement for the ABA to impose licence conditions that require all commercial television broadcasters in regional aggregated markets to broadcast a minimum amount of material of local significance.  Local news and information obligations for radio in the current Bill are retained.

Approval of Temporary Breaches (amendment (21))

Section 67 of the BSA permits the ABA to grant a prior approval of a temporary breach of the control provisions for up to two years (subject to the possibility of extension for up to one further year).  These provisions could enable commercial broadcasters to effectively manipulate the structure of regional markets by acquiring new licences and on-selling them to other players who are unlikely to compete for the same audience demographics.  The effect of such an arrangement could be reduced competition and reduced diversity in programs of broad appeal to listeners.

Amendment (21) therefore restricts the circumstances in which an approval of a temporary ownership or control breach could be granted under section 67 of the BSA, and ensures that any approvals are granted only for the minimum time.  This amendment provides that a temporary breach would not be approved if it resulted in the person seeking approval of a temporary breach becoming the successful applicant for a commercial radio licence, and ensures that any approvals are granted only for the minimum practical time as determined by the ABA.  The amendment also provides for a reduction in the period of deemed approval from two years to one year where the ABA has not responded refusing or approving the breach in the required time period.  The amendment builds upon existing proposed changes in the Bill that prohibit contracts and arrangements which restrict the program format of commercial radio broadcasting services.

Review (amendment (22))

Given the rapid commercial and technological changes in the media and wider communications sector, a statutory review will enable an assessment of the extent to which the proposed changes continue to safeguard the public interest in having access to diverse and relevant sources of information.

Amendment (22) therefore requires that the Minister before 31 December 2006 cause to be conducted a review of the media ownership arrangements.

‘2 out of 3’ in Metropolitan Markets (amendments (3) to (10))

The current Bill limits cross-media acquisitions in regional markets to ‘2 out of 3’ types of media (that is, radio, television and newspapers).  Amendments (3) to (10) provide for the extension of this limitation on the types of media any person may control to all markets, and ensure that the 2 out of 3 limit cannot be avoided through the issue of multiple exemption certificates.

FINANCIAL IMPACT

There is no impact on Commonwealth expenditure or revenue.



NOTES ON AMENDMENTS

Amendment (1)

Amendment (1) adds new section 43A to the BSA, which requires the ABA to impose licence conditions that require all commercial television broadcasters in regional aggregated markets to broadcast a minimum amount of material of local significance.

Material of local significance includes news that relates directly to the local area concerned, as well as current affairs or other programs.  This recognises that a diversity of locally relevant programming will be of interest to viewers.

The ABA has recently conducted an investigation into local content in most aggregated regional markets.  As an outcome of this investigation the ABA has proposed a draft licence condition imposing requirements for the broadcast of a minimum amount of material of local significance for relevant local sub-markets.  Material of local significance in that draft includes material such as local news (local news has a higher relative value in reaching the prescribed minimum amount of material of local significance). 

This amendment, together with amendments (2), (11) to (20) and (23) to (28), replace the previous requirements proposed for television broadcasters for local news contained in the Bill, with a requirement for the ABA to impose licence conditions requiring minimum requirements on certain commercial broadcasters in regional aggregated markets to broadcast material of local significance.  The amendments require the ABA to ensure such conditions apply at all times after the relevant date.  If the Parliament were to legislate a different and distinct requirement on the same broadcasters for the broadcast of material of local significance, there would be a greater potential compliance and monitoring burden on regional television broadcasters and the ABA. 

Regional aggregated commercial television markets include those markets examined in the ABA’s recent investigation.  The investigation related to defined licence areas in New South Wales, Victoria and Queensland.  In these States the commencement date for the new licence condition has been set at 1 August 2003.  The Bill now provides for the licence condition to also require a minimum level of material of local significance in Tasmania.  As the Tasmanian commercial television broadcasters were not included in the initial investigation, the applicable date for the commencement of a licence condition has been set at 1 July 2004 to enable the ABA to determine the appropriate licence condition for that market.

Amendment (2)

Amendment (2) amends a simplified outline provision as a consequence of amendments (11) to (20) below.  

Amendments (3) to (10)

Amendments (3) and (4) amend the definition of ‘set of media operations’ in new section 61B by removing the paragraph which covers all three types of media (television, radio and newspapers).  Amendment (6) amends new section 61C as a consequence. 

The effect of amendments (3), (4) and (6) is to prevent a single certificate from being issued in respect of a set of three different types of media in a market, because under new section 61E an exemption certificate can only be issued in respect of a ‘set of media operations’ as defined. 

However, it would be possible for multiple certificates to be issued which had the combined effect of allowing cross-holdings between all three types of media in a market.  Amendments (5) and (7) to (10) address this situation.

Amendment (5) inserts a new definition of ‘unacceptable 3-way control situation’ into new section 61B.  The term is used in new sections 61C and 61E, as amended by amendments (7) to (10) below.  An ‘unacceptable 3-way control situation’ is a situation where a person would, unless they were protected by an exemption certificate, be in breach of the cross-media rules in relation to three types of media in a market: television and radio (paragraph (a) of the definition); and television and newspaper (paragraph (b) of the definition); and radio and newspaper (paragraph (c) of the definition).  The definition is drafted in this way because the specific prohibitions in the cross-media provisions operate with respect to pairs of media operations. 

Amendments (9) and (10) amend new section 61E (which sets the criteria for the issue of a cross-media exemption certificate).  The amendments ensure that an exemption certificate will not be issued where it could cover a person who would otherwise be in breach of the cross-media rules in relation to all three types of media in a market. 

Amendments (7) and (8) amend new section 61C (which provides an exemption from the cross-media rules where an exemption certificate is in force).  The amendments ensure that the exemption does not protect a person who would be in breach of the cross-media rules in relation to all three types of media in a market, even where circumstances change (eg a change in corporate structure, shareholdings or company directors) occur after a certificate is issued. 

The effect of all these amendments is to extend the ‘2 out of 3’ rule to all markets, including metropolitan areas. 

Amendments (11) to (20)

Amendments (11) to (20) amend new Subdivision C (Local news and information requirements) of new Division 5A of Part 5 of the BSA.  The amendments remove all references to commercial television broadcasting licences from Subdivision C, as a consequence of new section 43A above. 

Amendment (21)

Amendment (21) amends section 67 of the BSA, which allows the ABA to grant approval for a temporary breach of the cross-media rules. 

The amendments:

·         restrict the circumstances in which an approval of a temporary ownership or control breach can be granted (by providing that an approval cannot be given if the breach would result from the allocation of a new commercial radio broadcasting licence by the ABA);

·         ensure that any approvals are granted only for the minimum time necessary to cure the breach (but not requiring the person to surrender the licence in order to cure the breach);

·         reduce the period of deemed approval from two years to one year where the ABA has not responded refusing or approving the breach in the required time period.

Amendment (22)

Amendment (22) inserts new section 78A into part 5 of the BSA.  New section 78A requires the Minister to cause a review of Part 5 to be conducted before 31 December 2006.  The report of the review must be tabled in Parliament. 

Amendments (23) to (28)

Amendments (23) to (28) make amendments which are consequential on new section 43A and the removal of the existing local news and information requirements in the Bill from commercial television broadcasters. 

The proposed licence conditions relating to local news and information requirements for commercial television broadcasters are no longer required, and are therefore removed by amendments (25) to (28).  Amendments (23) and (24) remove cross-references to those conditions.