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Thursday, 10 March 2005
Page: 20

Senator ABETZ (Special Minister of State) (11:00 AM) —The Senate has got a raw deal today. We did not hear from Senator Conroy and instead we got Senator Ludwig; and, on this side, we will not be hearing from Senator Coonan but from me. So the Senate is unfortunate in that regard. But I am sure that Senator Ludwig and I will muddle through nevertheless.

It would come as no surprise to the opposition and the Democrats that the government opposes these amendments. The government does not support the amendments relating to what is referred to by some as the loophole in the antisiphoning regime. In the government’s view, it is not clear that the intention and operation of the antisiphoning scheme are being circumvented under current arrangements. As the government has said on previous occasions, this is an issue it is prepared to look at but there is no evidence to suggest that the antisiphoning rules are being infringed.

The current licence condition imposed on pay TV licensees prevents a pay TV licensee acquiring rights from an associated company before they have first been acquired by a free-to-air broadcaster or the event has been delisted. If a free-to-air broadcaster considers that it has not had a reasonable opportunity to acquire the rights to a listed event, it can still apply to the minister for the event to be retained on the list and not be subject to automatic delisting, thereby preventing exclusive pay TV broadcast of the event. In addition, the government is not convinced that a compelling case has been made by free-to-air networks in relation to the necessity for access to exclusive rights to listed events. The acquisition of free-to-air rights to the 2005 Ashes cricket series by SBS and the Seven Network demonstrates that the scheme continues to work effectively to protect the free-to-air coverage of key events that Australians have traditionally enjoyed on free-to-air television.

The government are committed to the antisiphoning regime that currently operates. Any significant changes to the way this complex regime works need to be undertaken carefully and in consultation with all relevant stakeholders. As I have said, we will continue to monitor the operation of the antisiphoning list to ensure it properly reflects the attitudes of Australians and the commercial realities of the sporting and broadcasting sectors. This bill is the completion of the commitment the government made at the time we published the revised antisiphoning list in April 2004. Along with the announcement of the revised list, we committed to extending the delisting period, and that is the purpose of this bill.

There are also compelling legal grounds which justify the rejection of these amendments. The amendments seek to address two issues: the capacity for pay television licensees to acquire free-to-air rights to listed events and the acquisition of rights to listed events by companies associated with pay television licensees. However, the amendments are poorly drafted and give rise to a number of serious concerns.

The proposed clause 10(1C) is very broad in scope. It would make pay television licensees responsible for the business decisions of their owners or controllers or other entities owned or controlled by those owners or controllers. Licensees clearly should not, as a matter of fairness, be held responsible for the actions of persons they are not in a position to control. There is some case law to suggest in fact that this provision would not even be enforceable for that reason. This amendment is so unclear it is not at all beyond the possibility that, for example, Foxtel could be put in breach of its licence if a company within the Nine Network acquires the free-to-air rights to an event but does not have arrangements for those rights to immediately flow to the Nine Network companies that hold their commercial television licences.

The purpose of proposed clause 10(1)(eaa) is not clear. It is unclear that this adds anything to proposed clause 10(1C). Clause 10(1)(eaa) provides that if a subscription television licensee broadcasts a listed event that has been acquired in breach of clause 10(1)(e)(i) then the licensee is in breach of the licence condition. However, the initial acquisition by a licensee or an associate puts the licensee in breach of the licence condition in clause 10(1)(e) because of clause 10(1C). There is therefore no need to make it an additional licence condition that the licensee must not broadcast an event that it has acquired in breach of a licence condition. For drafting reasons alone, these amendments should be rejected.

I turn to the impact on the regulator. The provision in proposed paragraph (1C) of the amendment relies on the notion of a person being ‘in a position to exercise control’ of a company. It borrows this phrase from the ownership and control provisions of the Broadcasting Services Act, part 5 and schedule 1. The concept of being ‘in a position to exercise control’ is a complex one. For the ABA to determine whether a particular person is in a position to exercise control over the licensee under paragraph 10(1C)(a) of the proposed amendment—or another person, presumably another company, under paragraph 10(1C)(d)—would require the Australian Broadcasting Authority to undertake a detailed investigation.

Given the short period of time that may be involved between acquisition of rights and the actual event, relying on the ABA to make a detailed investigation into the control of companies is problematic. The ownership and control provisions of the Broadcasting Services Act were specifically designed to deal with the control of broadcasting licences. This amendment takes those provisions and employs them for a significantly different purpose—tracing the relationships between what is potentially a very large network of relationships between companies both within and outside the media sector, including for example every entity in the News group, PBL group, Telstra group and SingTel group. For the range of reasons I have outlined, this amendment is opposed by the government.

The CHAIRMAN —The question is that the amendments moved by Senator Conroy be agreed to.

Question agreed to.