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This transcript has been prepared by a source external to the Department of the Parliamentary Library.

 

It may not have been checked against the broadcast or in any other way. Freedom from error, omissions or misunderstandings cannot be guaranteed.

 

For the purposes of quoting verbatim from a transcript, it is advisable to verify the transcript against the broadcast.

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Media Report

Thursday 28 March 2002

 

New media rules

 

 

Mick O’Regan: Welcome to The Media Report.

 

Right now Australia is in the midst of major change and serious debate, about how the media works in this country. Pay-TV deals, access to cable, services to remote and regional Australia, they’re all under scrutiny. But the most contentious media issue at the moment concerns ownership: who can own what media, how much of it, and where.

 

Federal Parliament currently has a Bill on the topic to debate, the Broadcasting Services Act Amendment Media Ownership Bill. The proposed legislation sets out to reform the rules covering foreign and cross-media ownership. The government argues the new rules will encourage greater competition, while ensuring continued diversity of opinion. Labor and the Democrats disagree. It’s an area of politics where there’s little common ground.

 

In a moment both the Minister for Communications, Senator Richard Alston, and Labor spokesman Lindsay Tanner will argue their case.

 

That’s coming up this week on The Media Report, here on ABC Radio National.

 

Mick O’Regan: The Labor party is pretty clear in its assessment of the new Media Ownership Bill. The ALP says the proposals are bad for media diversity, and therefore bad for democracy. Government proposals for separate news rooms and minimum levels of local news content are described as Mickey Mouse.

 

Beyond the legislation, the suggestion that Telstra might become a media player through buying a television station, is rejected as a misuse of taxpayers’ money.

 

Lindsay Tanner is the Federal Shadow Minister for Communications.

 

Lindsay Tanner: Well I believe that it’s highly likely we will oppose the government’s proposals. We get to go through our formal Shadow Cabinet and Caucus processes, but certainly there’s no surprises in what they’re proposing. It would allow the substantial reduction in diversity of media ownership in Australia, it would lead to a situation where we could have as few as three major commercial media organisations in this country. I think that would be bad for diversity, be bad for democracy, and it would undermine the scope of public debate in our community.

 

Mick O’Regan: Now when you talk about diversity, can you be more precise? What are you referring to?

 

Lindsay Tanner: Diversity of ownership. Diversity of ownership is the only ultimate guarantee of diversity of voice, diversity of opinion. If you’ve got only a handful of major media organisations, they’re ultimately controlled from one source, even though they might have different outlets, and although those different outlets from time to time might disagree, might put forward a point of view that’s different from each other, that doesn’t happen all that often, and there’s no guarantee that it would happen. The only guarantee you’ve got that you’ll have a variety of voices, is to ensure that they’re owned by different people. The key question we need to ask ourselves is in the market for public opinion, how many major players are there? How many major forces are there that ultimately are the gatekeepers of what voices get heard and which voices don’t get heard? At the moment in Australia there’s about half a dozen. I think that’s a barely acceptable minimum. If we allow that to shrink to three, I think that’s bad for democracy and bad for the health of public debate.

 

Mick O’Regan: So the Labor party would oppose any legislation that would enable that further contraction of media ownership in Australia?

 

Lindsay Tanner: That’s right. We’ve set the question of diversity as the fundamental reference point, the fundamental principle around which we’ll judge Senator Alston’s legislation. From what we have seen so far, it would appear that his legislation would allow for a substantial reduction in diversity. He’s got this Mickey Mouse test about editorial separation, that is clear window-dressing, and it’s to be administered by the Australian Broadcasting Authority which is chaired by Professor Flint, who only very recently called publicly for the major media moguls to be unshackled from our media regulatory arrangements. So in other words the umpire in this case is somebody who’s already made a decision, and that decision is: Give everybody an exemption, forget about the cross-media ownership laws. So it’s clearly window-dressing, and shouldn’t be treated seriously. We will see if this legislation passes within a fairly short period of time, the number of major commercial media organisations in this country shrink to three in my view.

 

Mick O’Regan: But would you agree, Mr Tanner, that there needs to be a complete overhaul of media ownership laws? And I take you back to the recent Productivity Commission Report that it found that the existing regulations, and I quote here ‘constrain the growth and development of the old media but do nothing about the new.’ I mean surely we’re in a situation where technology and media convergence is rendering some of our existing regulations out of date?

 

Lindsay Tanner: Well I broadly agree with the Productivity Commission position on these issues, in fact I wrote pretty much the same thing before the Productivity Commission did put it in a book several years ago, and that in a sense takes us to the much more fundamental question in Australian media politics, which is basically the future of digital television. Senator Alston says that that brave new world of new media and convergence and new technology has already emerged, when it fact it hasn’t. And one of the primary reasons it hasn’t is because of the approach taken by his government to the introduction of digital TV, where you’ve had existing players effectively highly protected, you’ve had particular kinds of technologies mandated, high-definition TV being the example, and a regulatory regime established which is highly restrictive. So in a sense, the real issue here is not the cross-media ownership laws, the real issue is the future of digital TV. At this stage, we don’t even know how many commercial TV networks we’ll have in Australia in a few years’ time; there’s a moratorium on new licences until the end of 2006, but after that it’s an open question, whether or not there will be new licences. It’s a bit silly to be seeking to regulate about diversities now when we don’t know what the landscape is going to be in a few years. So I would argue that Senator Alston should be concentrating on fixing up the digital mess first, and then we can revisit the question of regulation of ownership, because then we’ll have some idea of how much diversity the market will deliver. You don’t get much diversity if you’ve got a prohibition on new entrants to the market which you’ve currently got in the case of commercial television.

 

Mick O’Regan: So just on that, so you would be happy to relax the foreign ownership controls to possibly allow new entrants into the media market?

 

Lindsay Tanner: Yes I’ve indicated a willingness to consider the relaxation of the restrictions on foreign ownership. I believe that that would, if anything, improve diversity, it could lead to new entrants, for example people setting up new newspapers in some of the smaller capital cities which only have one newspaper. But the government has gone for an open slather approach and hasn’t addressed the issues that are there in more micro form on the foreign ownership front, so it’s very ironic for example that the government in effect is saying if an Australian media proprietor takes over another media company, it’s got to maintain separate editorial processes and ensure that the company that’s been taken over still maintains its organisational integrity in a sense, but if a foreign media organisation makes that takeover, it has no such obligation so in other words it’s conceivable that if a foreign media organisation under Senator Alston’s legislation took over one of the major Australian companies, subject to existing local content laws for example in TV, it could pretty much replace a substantial proportion of the organisation or replicate it from overseas. An area where I’m very concerned about for example, is overseas bureaux of Australian media organisations where you have journalists from Australia working in Tokyo, New York, Jakarta, London, sending back reports. I think it’s very important that we still maintain that network. Senator Alston’s proposals would allow a foreign owner to effectively dismantle that network and use their existing network to provide reports into Australia. So although I broadly support relaxing foreign ownership restrictions, I think that Senator Alston has failed to deal with some of the specific issues that arise there.

 

Mick O’Regan: Mr Tanner, to take you to another issue and to hark back a bit to your comments about digitisation, one of the key areas of discussion has been the possible entry of Telstra as a major media player, possibly even buying a television station. What would Labor’s opinion be of that?

 

Lindsay Tanner: We haven’t had any formal discussion about this issue but I’ve already indicated my view in public, which is that Telstra is already too dominant in the telecommunication sector, we have inadequate competition in telecommunications, and to allow it to extend that dominance into media and content I think would be bad for Australia, bad for competition, bad for consumers. It’s already now got a powerful position in content through its 50% holding of Foxtel, which is effectively going to have a monopoly on Pay-TV content as a result of its deal with Optus. It would also be a misuse of taxpayers’ money; we shouldn’t forget that Telstra is still majority government-owned, and for perhaps a billion dollars of taxpayers’ money to be invested in buying an existing commercial television network when Telstra is reducing its investment in its own phone network, and when we’ve got enormous problems with telecommunications services in the bush, and we’ve got no shortage of other potential uses for public capital, like schools and universities and hospitals, in my view it would be very, very silly for public money of that magnitude to be invested in a commercial TV network. And it also raises a number of issues about the role of the government, because you wouldn’t have the same independence charter that you’ve currently got with the ABC, you’d have a question mark placed over the future of the ABC and you’d have the potential for the government through its majority ownership of Telstra and its dominance of Telstra board appointment, to in effect manipulate what might be occurring in that media organisation, Channel Nine or whoever. So I think it’s a bad idea, and I think Telstra should concentrate on fixing up its own backyard before it gets carried away with all these great fantasies of investing in things that are outside its traditional realm.

 

Mick O’Regan: Do you see though in examples particularly in Europe, where there has been a linkage between media companies and telecommunications companies, where the logic of linking telephony and the internet and media content distribution is very attractive. Do you think that those arguments might take hold here, that for a lot of people they will see that Telstra is an appropriate media player?

 

Lindsay Tanner: Possibly, but you’ll also find as you look around the world there are significant barriers to major telecommunications companies getting into these fields so that in a number of major jurisdictions, Telstra wouldn’t even be able to have its investment in Foxtel for example, and that is in itself a problem, because it means that you’ve got the two existing major delivery mechanisms for broadband, Telstra’s ADSL network and the major cable network in Australia, both in the hands of the same company, which has obvious problems for competition and partly as a result our broadband prices in Australia are 30% higher than they are in the United States and the United Kingdom. So yes, we are seeing convergence occur in various ways but we still have some big questions about what we should allow people to do in the marketplace and whether or not we should allow total vertical and horizontal dominance by one organisation. That’s ultimately the key: what’s in the interest to consumers? We want competition, we want consumers to get the best deal and we don’t want to have a situation where we have one company that is completely dominant and able to use that dominance to rip off consumers, and those issues in various forms have been dealt with by regulators in other countries too. Different results because you’ve got different market structures, but the notion that you just have open slather and let the biggest and most powerful company gobble everything up I think is wrong and it would lead to bad outcomes for consumers and for the economy.

 

Mick O’Regan: Lindsay Tanner, the Federal Opposition spokesman on Communications.

 

The Communications Minister, Senator Richard Alston, has been listening to that interview with his Labor counterpart, and the Minister joins me now. Senator Alston, welcome to the program.

 

Richard Alston: Thank you, Mick.

 

Mick O’Regan: Senator, how will the new rules encourage diversity?

 

Richard Alston: Well because they’ll require separate editorial streams and decision making; in other words, instead of having a situation where an existing media player acquires someone else in another area of the media and they essentially then combine everything and you only have one view of the world, they’ll be required to have separate editorial decision making processes, and that’s in fact what happens in the real world right now. It’s quite clear that the timetables and constraints under which media companies operate mean that you don’t have time to go off and take your orders from on high on the issues of the day, and if you did try and do that sort of thing, then I’m sure that the listeners and viewers would walk away in droves.

 

Mick O’Regan: We should be clear about this: these exemptions, separate and publicly available editorial policies and separate editorial news management, they’re the conditions that would allow an exemption for an existing player to extend their media ownership into say if they owned a television station they could buy a newspaper, and vice versa.

 

Richard Alston: Yes, that’s right.

 

Mick O’Regan: So what we’re looking at here, with these exemptions in place, for example, the PBL organisation, the Packer organisation, might be able to buy John Fairfax, control The Sydney Morning Herald and The Age as well as having the Nine Network.

 

Richard Alston: But you would still get as you do now, I mean you could have a situation where John Fairfax simply says under the current rules We want The Sydney Morning Herald, The Age and The Financial Review to have precisely the same editorial line on all issues. Nothing to stop it under the current regime. Why doesn’t it happen? Because it wouldn’t work. No-one would ever buy those newspapers because they’d say Well I can read it in one. Now we read these different papers because they present different voices because of commercial considerations, and in a market the size of Australia, the idea that somehow you could simply impose a single view without alienating half the population is really just not in touch with reality.

 

Mick O’Regan: Senator, if that media organisation had a particular concern about a news item that went to the core of its financial profitability, or about a particular governmental policy that went to the core of its financial viability as a media organisation, wouldn’t it be very unlikely to see that organisation in all of its media, treat the issue properly, because it would be dealing with the media through different outlets but one that went to the core financial profitability of the central organisation?

 

Richard Alston: Well it’s probably worth starting with the ABC and saying that the ABC would always pride itself on not having those commercial factors which might compromise its view of the world, and the ABC of course remains entirely untouched by these proposed arrangements, and indeed having both ABC and SBS as government broadcasters are probably unique in the world. But again, right now, any commercial media outlet can find itself in the situation you suggest, and can try and slant its views to advance its commercial interest. Now probably the best way that you avoid that is to have people who have essentially media interests, and that’s really how you’d characterise all of the existing owners, but as we know from some years ago, there was nothing to stop someone like Alan Bond coming in, who might have had a whole range of other commercial interests and might then be much more inclined to promote those rather than simply acting as a media operator. So the current laws don’t really restrain that. I think what restrains it is that the readers and viewers and listeners can see through that sort of thing, as they do from time to time, and where a media outlet does go overboard and promote its commercial considerations to a point where it’s blatant, then I think people can understand that. And of course you’ve got to remember you’re going to have the Trade Practices Commission in there anyway, and it’s not anything like the open slather that Lindsay Tanner might talk about, because it does have a role in terms of preserving competition. But what you’ve got to start with is a recognition that convergence is occurring and Mr Tanner, when he was being a bit more expansive a few years ago and writing books on the future of the world, was very keen to say in a few years’ time it won’t really matter whether Kerry Packer owns Fairfax or anything else, because all these things are coming together. And now of course, because it’s convenient, even though Mr Beazley had a different view on most of these things, all of a sudden we have this opportunistic opposition on all fronts. Now that’s not a recognition of what’s happening in the real world.

 

Mick O’Regan: Now Senator, one of the ideas underpinning this legislation, it seems to me, is that there is a converged media space, we are seeing the integration of various types of media in the presentation of their product. Is it not contradictory then, that on the one hand you’re suggesting these changes to take advantage of that converged media space, but a particular criterion in implementing that is the separation of news management and news compilation processes?

 

Richard Alston: Well you see, I don’t know that there’s a particular national interest in preserving diversity of entertainment, because that’s essentially an optional issue for people if they want to spend 24 hours a day in front of television being entertained, that’s their choice; if they want to turn off completely, they can. But when it comes to things like news and current affairs I think we take a very different view, and for example, right now we have two of the regional television networks cutting back dramatically on their regional news coverage, and we’ve got an ABA inquiry into that as a result, because news and current affairs I think fall into a very different category. And that’s where this core issue of diversity of opinion becomes absolutely vital, because what you’ve got to ensure in a democracy is not that you have a number of different outlets, as much as that you have a diversity of views, so people don’t only get one side of the story. And these arrangements are designed to ensure that you have these separate editorial decision making processes. So if you own both a television and a radio station, then they make their own separate judgements about what priorities you give to news items, in fact which news items you select, and how they might want to treat those matters, and that’s entirely proper because that ensures that you are much more likely to get a different view of the world from those different mediums.

 

Mick O’Regan: And that different view of the world is going to be overseen by the Chair of the Australian Broadcasting Authority; now Lindsay Tanner in the interview that I just put to air with him, commented that Professor Flint, the Chairman of the ABA, has in the past said that he feels that media proprietors should be unshackled from restrictive media laws. Is that a concern for you that the ABA has that view?

 

Richard Alston: Well again I think that’s a recognition of the reality of convergence which Mr Tanner was a great advocate of a couple of years back. But the Chairman of the ABA is an office, it’s not an individual, and that person is required to act in accordance with the law. Now if the law changes, and there are obligations imposed on that person, then the law can be brought to bear to force a chairman or a body to act in accordance with the law, and media companies are not loath to injunct if they think it’s in their commercial interests, and there’d be opportunities for others to do likewise. So that’s part of the problem with this whole debate, that people demonise particular individuals, they talk about media debates in terms of Murdoch and Packer, rather than the underlying principles involved. And I think if the laws are framed in such a way that they can take effect irrespective of who might be owning those companies, then you have a much clearer view of what the landscape looks like.

 

Mick O’Regan: Senator Alston, thank you very much for joining The Media Report.

 

Richard Alston: Pleasure, Mick.

 

Mick O’Regan: The Communications Minister, Senator Richard Alston.