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Media ownership: Cabinet will consider media ownership regulations to govern new pay TV stations

PETER THOMPSON: As Canberra prepares for the Prime Minister's industry statement this afternoon, another issue is climbing the agenda. There are growing concerns that the introduction of pay television in Australia could lead to the further concentration of media ownership. Federal Cabinet meets, this week, to consider the broad framework for the introduction of pay television services. A key issue is: who will get control of the new pay TV stations? Under current law, a television owner can't also control radio and newspapers.

But the plan before Cabinet submitted by the Communications Minister, Kim Beazley, is flexible on ownership, opening the way for possible further concentration of Australia's media. It relies on existing trade practices law to maintain competition. However, legal opinion obtained by A.M. says there are grave doubts that trade practices law would inhibit a further concentration of media ownership. From Canberra, here's Andrew Sholl.

ANDREW SHOLL: At a time when television advertising revenues are down, two of the commercial networks are in receivership - in fact, the networks have just suffered their worst year on record - the Government wants to bring you three or four new TV stations; although it is not you the Government has foremost on its mind, nor - on the face of it - the existing networks. What the Government has to do, desperately, is to sell Aussat, the basis of the new telecommunications carrier that will compete with a merged Telecom and OTC - but a satellite service that's losing millions daily and whose technology is fast being outdated by Telecom's new optical fibres.

So the Government is adding sweeteners to the deal. One of them is granting the new operator of Aussat the exclusive licence to carry pay television. If all goes to plan, pay TV will be up and running in this country in two years' time. You'll be able to pay $10 or so each month, on top of the cost of a satellite dish or decoder box, to watch a movie channel, a sports channel, perhaps another general programming channel and a news station, like CNN.

But who'll run the four new TV stations - overseas companies? No. Any interest they have will be kept at the 20 per cent limit that exists already for commercial TV. Brand new local companies? Unlikely. Start-up costs are in the order of hundreds of millions of dollars. And consider this: pay TV won't have advertising. There's no requirement for any Australian-made content. So who does that leave? Well, at the moment, not Seven or Ten. On the face of it, the only operators with the equipment and the know-how are Kerry Packer and the ABC. The Managing Director, David Hill, is said to be highly enthusiastic about getting into pay TV, but if there were cross-media rules, Mr Packer couldn't become involved, but, in the plan to go to Cabinet, there won't be. Pay TV would be subject to normal trade practices provisions, and Ann Davies from the Communications Law Centre says that has grave implications for the further concentration of media ownership in this country.

ANN DAVIES: Well, in fact, the Communications Law Centre has recently sought advice from David Catterns, one of the leading barristers in the media law area, and our advice is, in fact, that the Trade Practices Act will be fairly ineffective in controlling cross-media holdings in pay. There are two reasons for that: first of all, section 50, which deals with dominance, would not have any operation at all at the grant stage when the licence is actually granted.

ANDREW SHOLL: And the second?

ANN DAVIES: Well, the second reason is that it's very difficult to define the market for pay TV. It's a new service. It's hard to say whether it competes with television or whether it competes more widely with entertainment services, and so it would be quite difficult to say whether someone was in a position to dominate the market. We'd probably be faced with a very long court wrangle to sort that one out.

ANDREW SHOLL: Is the Department being remiss, or is the Government favouring Kerry Packer?

ANN DAVIES: I think the motivation behind the rules is very mixed.

PETER THOMPSON: Ann Davies from the Communications Law Centre.