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Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000

CHAIR —Welcome. We have before us submission No. 11, which the Senate has authorised to be published. Do you have any alterations or additions which you would like to make to your submission?

Ms Sharp —We have no alterations or additions to make to that submission.

CHAIR —Thank you. Would you like to make an opening statement?

Ms Sharp —Yes, thank you, but firstly I would like to convey the apologies of our managing director, Nigel Milan, who would very much liked to appear before this committee today. Unfortunately, he is not able to. He is on his way to the Banff International Television Festival to collect the global outstanding achievement award which has been awarded to SBS this year. So he is not here for a good reason.

I would like to make a few general points. SBS's view is that content is of primary interest to audiences and that, unless we can offer significantly different content, consumers will not perceive that they are getting very much from digital television. The prospect of improved technical quality alone will not be a driver for audiences. In our submission, SBS has advocated significant amendments to the legislation in relation to both multichannelling and datacasting, as well as the ability for SBS to carry our radio services on our digital television spectrum.

We were pleased to note yesterday that Mr Branigan from FACTS voiced no opposition to national broadcaster multichannelling other than that it should be in pursuance of our charter. We are in agreement there, obviously. I would like to make one comment on another aspect of what Mr Branigan had to say. He was asked whether the national broadcasters competed with commercial broadcasters for audiences. He said yes, and of course that is right. What he did not point out is that competition for audiences does not translate into competition for revenue. More than $2 billion—well over $2 billion this year—is spent each year on TV advertising. Around one per cent of that goes to SBS; and it does not matter how big the ABC audience gets, none of course goes to the ABC. The point I am trying to make is that, in our view, multilchannelling will not change the size of that advertising pie for television. It will not bring more advertising revenue. In fact, there is a recognised danger that multichannelling would—to use a word that Mr Branigan uses—cannibalise a commercial network's audience. In other words, it would split the existing audience rather than adding to it.

For SBS, that is not a disincentive. In fact, that is why we want multichannelling. We have an extremely complex set of statutory obligations. We have a very eclectic programming mix and we have an expectation that, as a national broadcaster, we will provide something for everyone, preferably in prime time viewing hours. Obviously, if we had multichannelling, it would give us the ability to give our audiences more and at times when they would prefer to see it.

On the issue of datacasting, SBS has argued throughout the government's digital review process that datacasting should not be restricted according to genre. We maintain that view. In fact, we consider that the legislation as it stands is unnecessarily complicated, but if you look at the restriction that there can be no more than 10 minutes of video and that those 10-minute bits cannot be put together to make a recognisable television program, that is a pretty good guarantee that you will not get datacasting that looks like television.

It seems to us that a more logical approach would be to simply take the list of exemptions—the information programs, the parliamentary broadcasts and foreign language news broadcasting—keep those as exemptions free of all restrictions and divide it like that, simply excluding all other programming, without defining it as category A and category B and creating a regulatory nightmare for the ABA and for everyone else. We cannot see why that would not of itself guarantee that the intention as expressed by the parliament in 1998, the intention that datacasting not look like broadcasting, would be achieved simply. They are the only comments I would like to make at this point.

CHAIR —Thank you very much, Ms Sharp. We congratulate SBS on its award. It is richly deserved and very good to see.

Ms Sharp —Thank you.

Senator MARK BISHOP —In your introductory remarks you have hit on the issues of multichannelling, datacasting, the radio network and the licensing. In terms of the multichannelling, it is clear that you wish to offer that service and to go down that path. Is it absolutely critical to your future as an organisation?

Ms Sharp —We regard it as critical to our future, yes. It basically gives us the opportunity to provide more programming in pursuance of our charter. As I said earlier, we have a huge set of obligations and we fulfil those obligations with a very crowded television schedule. I do not know if you have noticed but, for instance, our foreign movies have moved now to 10 o'clock at night in order that we can fit in more of the programming that we think is important in pursuance of our charter. What multichannelling would allow us to do, in the first instance very cheaply, is simply to showcase more of our programming at times that better suit our audiences. The most noticeable demand on SBS television in terms of our logging of overnight audience calls, in terms of requests that come in to our SBS web site, is for programming repeats. We do not schedule like other networks. We do not have much series programming, and people will notice that there has been a documentary, for instance, of particular note and we get constant requests for repeats.

As I say, the reason we look at that in the first instance from SBS's point of view is that it is very cost effective, and we have to be mindful of that. We would like, as it goes on, to develop a much more complex channel that takes in much more Australian content. We would like to provide a multicultural programming stream specifically for the second channel that would have a regional focus in terms of Australian multicultural arts and events around the country. But that would cost more money, and that would necessitate our persuading government to fund us a bit more for that.

Senator MARK BISHOP —If you are denied the opportunity to multichannel and you are reliant on the provisions in the bill concerning the division between category A and category B in terms of datacasting, understanding those restrictions, if you could rewrite the definition of datacasting—absent the right to multichannel—what would be the critical elements of that approach?

Ms Sharp —Of the approach to datacasting?

Senator MARK BISHOP —Yes, absent multichannelling.

Ms Sharp —I think I have pretty well covered it in my earlier remarks and our submission. I think that the least regulation, in general, the best for the consumer. If you are thinking of the audience, that is my answer broadly. But we have to be mindful that you want to encourage an environment in which datacasting is distinct and recognisably different from free-to-air broadcasting. For that reason we do not have any objection to the idea of video being limited to 10-minute segments, for instance. What we do think is a bit bizarre is the idea that those segments cannot be self-contained. From a practical point of view, I do not know how you look at a segment and decide what constitutes a beginning, a middle and an end, which is what self-contained is. It is not a very easy thing to do; it is a very subjective judgment to make. But generally, if you did put in those simple safeguards to make sure that datacasting did not replicate broadcasting, yes, I think that scenario suits what we have in mind.

Senator MARK BISHOP —In your submission you opposed the reliance on the ABA—the Australian Broadcasting Authority—

Ms Sharp —Indeed.

Senator MARK BISHOP —for determinations on the scope of the datacasting definition. It is apparently intended by government that there be an arbiter of last resort. Why are you opposed to the ABA being involved in this?

Ms Sharp —Once again, it just does not seem sensible to us. We have the SBS Act. We have particular responsibilities directly to the parliament of Australia through that act to make our board responsible for all programming of SBS and all program policies. Excepting datacasting seems to us illogical, frankly. It would create difficulties in terms of where the board's responsibility is under the act for all SBS programming except for what we datacast. It just makes no sense to us.

Senator MARK BISHOP —Your submission at page 2 is critical of the government's decision to require the SBS to comply with the datacasting licensing regime and pay the datacasting charge. Will there be an extra appropriation for you, or will you have to assume that charge out of operational expenses?

Ms Sharp —We have no idea how that charge is going to be configured or what it will be, but we would certainly have to go to government to cover the cost of any charges. You then have the ridiculous situation of applying to government to cover a national broadcaster paying a fee back to government. It does not make sense to us.

Senator MARK BISHOP —So the government will be paying the fee back to government. Do you have any idea at this stage of the figure involved?

Ms Sharp —No, I do not. I have not heard any conjecture on what that figure might be.

Senator MARK BISHOP —I think you made your position on multichannelling clear at the outset.

Senator BOURNE —Ms Sharp, you have mentioned electronic program guides and current restrictions under that legislation. Are you familiar with the British principles for electronic program guides?

Ms Sharp —I am not intimately familiar with them; I am just aware that they are to do with fair play.

Senator BOURNE —Yes. I have to say that I was not particularly familiar with them, either, until a couple of weeks ago. I think I am being fair to them when I say that you just have to treat everybody fairly and equally. I do not think they have restrictions on whether it should be teletext, video, animation or what have you—as long as everybody has the same treatment. Would you be happy with that sort of EPG clause?

Ms Sharp —We would be extremely happy with that clause. If you look at our treatment in some metropolitan daily newspapers, it has been the habit in the past—this has changed recently—to give the least space to SBS. Our fear would be that we would be disadvantaged in an EPG unless there were some provisions for fair play.

Senator BOURNE —I think the only other question that Senator Bishop has not asked—and I asked the same question of the ABC—would be: would you prefer any direction given to the SBS to be given as an amendment to your own act, the SBS Act, even if it is the same as everybody else is getting, rather than under the Broadcasting Services Act?

Ms Sharp —That is absolutely our preference.

Senator BOURNE —And it has been all along, has it not?

Ms Sharp —Yes.

CHAIR —I would like to ask some questions to do with audio content, which is in section 3 of your submission. You put a case for being able to deliver SBS radio throughout Australia. I wonder if you would like to just expand on that a little for the record.

Ms Sharp —It seems to us a really good opportunity to solve the problem that exists and that has existed for some time, which is that SBS Radio is currently available only in the state and territory capitals, plus Wollongong and Newcastle. We have tried, over many years, to get frequency allocations in regional and rural areas. That is getting harder and harder to achieve in the very competitive market for spare frequency. It seems to us that it would be really simple to use a tiny—and it would be only very small—amount of our digital television spectrum to take our radio services into the homes of everyone around Australia. It does not have the advantage of portability, but it means that everyone around Australia would finally be able to access SBS Radio in their living rooms.

CHAIR —That would be very important in regional Western Australia, where characteristically there is a very high ethnic diversity in towns like Kalgoorlie, Geraldton, Carnarvon, Karratha, Port Hedland and Broome.

Ms Sharp —Indeed.

CHAIR —It is of great interest that that could be done. The other matter which interested me to some degree is of a similar nature, and that is the delivery of education programs. I see you refer to a long-running series, English at Work. Again, given the high ethnic diversity of Western Australian regional towns, it would be useful if that kind of program could be delivered. Would you like to also expand a little on that?

Ms Sharp —That program is no longer run by SBS. It was a very long-running series that we used to put together in conjunction with various federal government departments in order to get out practical advice about everyday matters—taxation, medical benefits and those sorts of issues—in English that both could be understood and was used in the programs as a tool to make English more readily understood to people for whom it was not their first language. We do have, though, plans to develop datacasting packages that would focus on English as a second language in the same way, but it would not be identical to English at Work.

CHAIR —I see you have recommended amendments there for both of those options to be put in place.

Ms Sharp —Yes, we have.

Senator MARK BISHOP —Ms Sharp, I do not know whether you were here yesterday—

Ms Sharp —I was not.

Senator MARK BISHOP —We had an extensive discussion with FACTS—and then a range of other stakeholders—on the category B programming, what is educational material and what is not, whether it should be entertaining and whether it needs to be entertaining to attract and retain market, particularly children under the age of 6 or 7. FACTS made it quite clear that their view was that nearly all of the programs I referred to, which are aimed at youngsters and have a heavy educational bias, were traditional entertainment and, hence, should be reserved solely to broadcasters. I recall some discussions with your organisation at previous estimates hearings where we discussed what you would do if the second channel were available. You are somewhat similar to the ABC—wanting to go down the path of providing educational services/information, particularly in rural and regional Australia. Does the bill as currently drafted prevent you from exploring that option?

Ms Sharp —The bill as currently drafted does put extreme limitations on educational programming and on children's programming. SBS does not provide children's programming. We consider the ABC does an excellent job in that area, and we do not duplicate what the ABC does. In general, the phrases used in the legislation which prohibit anything from being too entertaining seem to us not just ridiculous but bizarre. It is very hard to get an audience to watch anything that has no entertainment value.

Senator MARK BISHOP —That is what I was going to ask. Whilst the purpose of the English at Work program—which I have seen a couple of episodes of over the years—and similar types of shows that you see on public broadcasters around the world is to educate and to assist people who are deficient in those areas, they are all formatted and their presentation is entertaining. So, apart from enrolling in a university course on the air, how can you have educational programs for your consumer market that do not have a form of entertainment or attraction?

Ms Sharp —You simply cannot. English at Work was scripted and performed by actors and professionally directed, lit and shot. If you just had a talking head giving the same information direct to camera, no-one would watch.

Senator MARK BISHOP —If the drafting of the bill remains as is, you essentially have to rule out going down that path, don't you?

Ms Sharp —Absolutely.

Senator MARK BISHOP —I was not paying close attention to Senator Eggleston. You do some radio, but you do not do radio in Western Australia, do you?

Ms Sharp —We do.

Senator MARK BISHOP —Do you?

Ms Sharp —We have a national radio network that goes to all state and territory capitals plus Wollongong and Newcastle. In Sydney and Melbourne we have two frequencies: one is AM and one is FM. At the moment, our service to Western Australia only reaches Perth.

Senator MARK BISHOP —I know there are plans being implemented for you to extend your transmission network to a range of smaller catchment zones.

Ms Sharp —For analog television, yes.

Senator MARK BISHOP —If you were able to broadcast radio through the set-top box or through the digital TV network, that would enable you to access hundreds and thousands of Australians in remote and rural parts of our country, wouldn't it?

Ms Sharp —That is true.

Senator MARK BISHOP —But the datacasting provisions in the bill, again, appear to prevent you from going down that path, is that correct?

Ms Sharp —Many parts of the legislation only refer to commercial radio services, but it seems that the overall intent of the legislation is to prohibit any radio service that could be seen to be a broadcast radio service. It is a fairly simple thing to change, though, as the legislation stands.

Senator MARK BISHOP —I am sure it is a very simple thing to change.

Ms Sharp —I meant in terms of drafting.

Senator MARK BISHOP —You would just have to pull out the ban in the drafting. But it strikes me as odd. The government of Australia funds the ABC and the SBS to hundreds of millions of dollars every year for operational needs and for capital upgrades. You are able to provide services to rural and regional Australia in this new technological environment but the government appears to be denying you that opportunity. Is that unfair criticism?

Ms Sharp —I wonder whether it was properly thought through. My impression is that, at the time of the drafting, if you like, the drafters were not aware of what they were prohibiting, which is that freely available services by SBS and ABC on radio should be prohibited from another mechanism for delivery. It does seem to me to be wrong thinking.

Senator MARK BISHOP —Bizarre. Wrong thinking—that is a very polite way of saying it. Thank you, Ms Sharp.

CHAIR —As there are no further questions, we thank SBS for their appearance today. Your evidence has been most interesting.

[11.54 a.m.]