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ENVIRONMENT, COMMUNICATION, INFORMATION TECHNOLOGY AND THE ARTS
01/06/2000
Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000

CHAIR —Welcome. The committee has before it submission No. 25, which it has authorised to be published. Do you wish to make any alterations or additions to your submission?

Ms Hambly —No, thank you.

CHAIR —Would you like to make an opening statement?

Ms Hambly —Yes. Thank you for inviting Fairfax to appear before you today. You have our submission and I will not go through that. To summarise, we hope this legislation in its final form will permit the emergence of datacasting as a new service, increasing media diversity for consumers and for advertisers, and promoting investment and employment opportunities in Australia. We have approached datacasting with the expectation of it working within the overall architecture of the digital television policy established in 1998. If that debate were carried on today, the outcome may be a little different. Notwithstanding that, we have built our business models assuming that we will work within that.

Notwithstanding our acceptance of the policy framework for business purposes, the detail of the bill, in our view, does not work. Our strengths are in news, opinion and current affairs. A variation of what we do in print and on the Internet is what we would like to do in datacasting. For Fairfax, the heart of the difficulties with the bill really revolves around the genre definitions in relation to information, current affairs and education. We also have other issues with the bill relating to the licence conditions and the lengths of the licences. From a first instance point of view, if we are even going to attempt to make a business out of this, we think that there needs to be modification to the genre conditions.

We accept the distinction between datacasting and broadcasting, but the constraints on datacasting in this bill are unnecessary and stranglingly tight. If they are not changed, we do not believe that there can be viable datacasting on a commercial basis in Australia. Our specific concerns on the datacasting regime are set out in our submission, but in general we are seeking more balance in the genre rules to permit us to datacast services that we believe will find a place with consumers. We do not seek to do TV, but we do seek to provide a compelling, interesting and, to some extent, entertaining service through datacasting.

We are also concerned with the electronic program guide provisions within the bill. This is a new insert into the bill which was not part of the general policy, and we believe it should be revisited. The Internet provisions just do not work. They can and should be amended. In relation to that, it is important to remember that spectrum broadcasting is not like cable. In cable you communicate ultimately one to one and you can send information packages to individuals. Therefore, you can tailor the information you send out and you can use the medium efficiently in that way. Broadcasting spectrum has huge advantages in terms of its communication with the public because of the ubiquity of the television set. Notwithstanding that, it is difficult to speak one to one to users when you are broadcasting. To try to do it uses up an enormous amount of spectrum. The way the present Internet conditions are drafted—that is, not allowing a walled garden—will make it extremely difficult, at least under present technology, to present any kind of viable Internet service at all.

We are also concerned about the enforcement authority that the ABA has been given in the present bill. The provisions which exclude ADJR and essentially prohibit the Federal Court or any other jurisdiction from providing injunctive relief while ultimate determinations are arrived at have no precedent in the Broadcasting Services Act as it presently stands. Notwithstanding the fact that very serious commercial matters are dealt with in the act now—matters of cross-media ownership, foreign ownership; all of those things—none of those provisions give the kinds of powers that the ABA has to, in essence, take people off the air or impose extra conditions on licences. You have ultimate relief in the courts, but by that time you may have been off the air for some time. We also pose some long-term policy questions about the treatment of the licence terms and whether this policy framework will in fact encourage a migration from analog to digital.

In summary, we can live within the broad policy architecture of digital but we cannot live with the bill in its present form. As the legislation stands today, we do not believe there is room for a workable or commercially viable service to the Australian television public. The barriers to entry are just too high. Ultimately, it has the real potential to be a waste of scarce spectrum resources culturally and economically.

Senator BOURNE —I have a couple of questions. You mentioned the electronic program guide. Do you have a view on whether a provision that would provide fairness, similar to the British rules, would cover what you are worried about?

Ms Hambly —There are two things that we would like to see in relation to electronic programming guides. Perhaps I could preface these remarks with a general position that we take. We do not seek to limit the free-to-air broadcasters on what kinds of services they present to the public. We do, however, think that there should be some more levelling of the playing field than there presently is. So we do not have a problem with the free-to-airs doing electronic programming guides. However, we think that it is not what broadcast television does at the moment and, therefore, if they want to do it they should pay for it. Further, because they will be able to do it for a very wide audience, unless the electronic program guide that a particular free-to-air wants to broadcast is simply of its own programs—if it is putting up anything other than its own programs—we believe that it should put up all datacasting and free-to-air programming. We also believe that there should be a provision in the act making information about both free-to-air and datacasting programming available to other participants in both of those industries so that we can all produce a useful program guide should we want to.

Senator BOURNE —To a basic standard?

Ms Hambly —Yes.

Senator BOURNE —Say, for instance, you were fortunate enough to bid for and get a datacasting licence—I hope I am not misrepresenting the minister, and I look forward to him ringing and telling me that I am—and the minister, for example, tries to put off the potential problem of community broadcasters by saying, `We'll deal with the reviews in 2003,' and then it is dealt with in the reviews in 2003 and a Must Carry rule is brought in, would you be concerned about changes to your licence conditions?

Ms Hambly —One thing that is really critical, if (a) the public is going to get a decent price for the licences and (b) people are going to be prepared to invest the kind of money that is going to be involved in setting up a datacasting service, is that there be certainty in what that licence buys for you. The less certainty there is at the outset, the less people will pay for those licences and, frankly, the more you limit the kind of people who will be prepared to take the risk on the licences.

Senator BOURNE —I see you think that the 10-minute rule ought to be sufficient. I have heard an argument put—I do not think it was put to this committee—that if you combined the 10-minute rule with certain types of links you could create a television channel. Do you think it would be sufficient to have the 10-minute rule plus a ban on certain types of links? Do you think that would cover your needs, that you would be able to datacast what you want to datacast and still not create another free-to-air broadcast channel?

Ms Hambly —I am not quite sure in what context you talk about links. It is hard for me to say, yes, I think we could live with that. Generally speaking, we do not want to be in the business of television broadcasting. We do not propose to make 30-minute programs that look like television programs. So we do not propose to look for ways around a 10-minute program. There is already a provision in the bill that says that you cannot sequence individual 10-minute sections. So if the linking you are talking about is different from that, I am not sure what it is.

Senator BOURNE —I love looking at conspiracy theories and thinking of ways to get around legislation, so that is a possible way of doing it. But I take your point. Thank you.

Senator MARK BISHOP —Ms Hambly, you were critical of the definition of datacasting in the bill, particularly the genre approach. If you could redraft the bill ab initio, what would be the critical elements in the definition of datacasting that you think would be appropriate?

Ms Hambly —If we could start ab initio, we would say that the real difference between datacasting and television broadcasting is that datacasting is interactive. So we would start from that, I think, and we would not go down the path of genre conditions and content regulation. Notwithstanding that, that is the way government policy has decided to go and we have some suggestions on how, even within the genre conditions, you could redraft the bill to make it work better than it does now.

Senator MARK BISHOP —What are those suggestions?

Ms Hambly —Some of them are set out in our submission, although we have not attempted to do the drafting in the submission.

Senator MARK BISHOP —What are the key points?

Ms Hambly —The key points are the definition of information.

Senator MARK BISHOP —Where are we talking about?

Ms Hambly —In the bill.

Senator MARK BISHOP —What page in your submission are you referring to?

Ms Hambly —Page 5 of our submission, under the heading `Fact, opinion and advice'. We have some difficulty in relation to information only because we think at best there is going to be quite a debate about an opinion I may hold or a restaurant reviewer may hold or a car reviewer may hold and whether it is fact or opinion. If you look at some of the services we provide at the moment on our Internet sites in citysearch.com, drive.com and mycareer.com and so on, you will see that a lot of the information that appears is in video segments and there are people providing car reviews, restaurant reviews and those sorts of things. We think we should be able to do those and we query whether it is information only. We would have some suggestions on how that definition could be clarified to ensure that those kinds of services would be available on datacasting. We have some difficulty also in relation to the distinction between news and current affairs. We think it is a distinction that is both difficult and inappropriate to make and we frankly cannot see a policy reason to make it.

Just going through our submission in detail, the definition of foreign language programming at the moment requires that there be no English content at all. Some of the things that people may want to do in datacasting will have at least some degree of English subtitling. We do not see why that should be a policy problem and we think that should be fixed in the act. We have a real problem with the notion that essentially information programs, or what we would say should be a broadened definition of information programs, must have little or no emphasis on dramatic impact or entertainment value. We think that with datacasting services, while their primary aim may not be to entertain, you cannot offer a service to the public that does not entertain in some way. We find that restriction silly in the extreme.

We have some concerns about the 10-minute rule and the 30-minute rule and so on. I will not attempt to go through those orally. I think another issue we are particularly concerned about—and which I think perhaps again is just an over-concern about protecting the free-to-airs in a way which really limits the possibility of services that might be available to the public on datacasting—is the way the definition of education has been done. In our view, if the programming requires that essentially it be a course of study, then children under 12 do not do courses of study. You do not link things to courses of study. It seems to us that that means there is going to be very few children's educational programs on datacasting. Also there is probably going to be very few open university type programs on datacasting, unless you can link them to an institution or something like that providing a course of study. We think there is a real risk in the way it is presently drafted. For example, a program which may be educational in relation to interests of rural communities or interests of particular sections of city communities will not be available on datacasting, for no particular reason.

Senator MARK BISHOP —In your introductory remarks, you made some references to the enforcement authority for the ABA. Then you developed that in terms of rights or non-rights to appeal to the Federal Court. Did I understand you to say that in relation to the ABA in exercising the powers conferred in the bill there is no recourse by an aggrieved party or observer to take any rights of appeal to courts?

Ms Hambly —No. There is a right to take the determination to a court. If, for example, what happens is that the ABA finds that you have breached the act in some way, ultimately whether or not you have breached the act is a matter for determination by a court. Section 57 of the bill says that the ABA can make that determination, the ABA can impose extra licence conditions, the ABA can make interpretations of the licence conditions and those determinations are, in effect, binding while you go to court. A court cannot provide injunctive relief while the matter is ultimately determined.

Senator MARK BISHOP —Could it provide a stay on the application?

Ms Hambly —No. Section 57 deals with stays of proceedings. It says that, for the purposes of this clause, decisions under clause 26 of the bill and various other sections are not amenable to the ADJR Act and a court must not make orders staying the decisions.

Senator MARK BISHOP —So unless there was inherent power in the court, that is the end of the story until the matter is decided.

Ms Hambly —That is right.

Senator MARK BISHOP —You would be aware that there are three or four reviews built into the bill over the next few years. Does your organisation have a view that they should be statutory reviews? By `statutory' I mean open to public comment, answerable to the parliament and reviewable by the parliament. Or should the reviews be essentially at ministerial discretion or occasioned by the department?

Ms Hambly —We certainly think there should be guidelines, legislative guidelines, as to how those reviews should be undertaken and what should be taken into account. Given the importance of the scarce resource that we are talking about, public review is better than private review. Most importantly, there is a need for certainty. I can understand the notion that none of us are quite sure how this service will develop and how indeed other services which may be provided through spectrum will develop as well. So I can understand the notion of a review period. But I think it is very important that the people who are thinking of bidding for these licences have a clear understanding of what are the terms under which those reviews will be carried out.

Senator MARK BISHOP —So you would argue then that, firstly, the reviews should be done sooner rather than later and, secondly, they should be statutory reviews overseen by the parliament.

Ms Hambly —I certainly agree with the first point. In relation to the second point, I think the important thing is transparency. I do not think necessarily a parliamentary review is the only way to achieve that.

Senator MARK BISHOP —No, I was not talking about a parliamentary review like this; I was talking about a statutory review, as opposed to a departmental review.

Ms Hambly —I understand, yes.

Senator MARK BISHOP —So you would favour a statutory review?

Ms Hambly —Yes.

Senator MARK BISHOP —In respect of the review regarding regulatory and revenue arrangements for datacasting licences subsequent to the end of the moratorium period for the commercial TV broadcasters, what sort of time frame do you suggest for completion of that particular review?

Ms Hambly —As quickly as possible.

Senator MARK BISHOP —Yesterday we had some representatives from the Australian Consumers Association. They argued that this whole area of digital TV—the new technologies and their convergence and their impact on a range of players—needed to be reviewed as a matter of urgency, and a couple of reviews that have been done recently, one by the Productivity Commission and the convergence review by the department, needed to be incorporated into an overarching review. Do you agree with that view or are you more or less comfortable with the way the legislation is developing?

Ms Hambly —I feel I am on the horns of a dilemma in relation to that. While I think there are real difficulties with the present bill, starting again will further delay the introduction of datacasting services in Australia and I have a real difficulty with that. Frankly, if someone could provide a review process that was short in time and likely to come up with a better outcome than the one we have, then I think that would be terrific. But if it goes back to years, I think ultimately it will be a disservice to the public.

Senator MARK BISHOP —Are you going to be prevented from offering new services and products under the proposed datacasting regime?

Mr Wolpe —Under the rules as written, and as Ms Hambly has stated this morning, it is highly unlikely that we could offer the services we would like to offer under datacasting. Going to your earlier question, recognising the architecture of the bill, we have tried to work in good faith for months with all the reviews and the parliament and the minister's office to try to make it workable so that we can move forward, not denying the benefits of digital television and datacasting to Australian television households, and have something that is commercially viable, works for the national broadcasters, SBS, all the parties.

Senator MARK BISHOP —Thank you.

Senator HUTCHINS —Do you envisage that the current legislation, as it applies to datacasting and the provision of Internet services, will be difficult to regulate?

Ms Hambly —I think it is very difficult to regulate the Internet. Given what I have already said about the difficulty of providing Internet services as presently envisaged by the bill, I guess it will not be too difficult to regulate because I do not think there will be viable Internet services under this bill.

Senator HUTCHINS —On page 9 of your submission you refer to the potential to transform datacasting licences into broadcasting licences when the moratorium on free-to-air licences ends. How will a new broadcaster such as a company that is an arm of Fairfax be able to compete with established free-to-air broadcasters in terms of being able to fund and buy content and attract advertising revenue?

Ms Hambly —The answer is we will probably do a different kind of service from the present free-to-airs. We have different strengths. Frankly, in newspapers in Australia we compete well above our weight. We always have. I think we have the skills to compete well above our weight in relation to broadcasting services, if that is the way we choose to go. But I do not think we are likely to offer the kind of free-to-air TV services that you presently see.

Senator HUTCHINS —As I understand it, the legislation provides for a company that is currently a free-to-air broadcaster to also provide text datacasting services but all other datacasters will be limited to predominantly providing text only datacasting services. Will this situation put media companies that datacast text but are not allowed to free-to-air broadcast at a disadvantage to their competitors who broadcast and datacast?

Ms Hambly —I am not sure I understand the question. I take two things from it. Firstly, if the entities that can datacast and broadcast do not pay for the extra services that they are able to provide—for example, the electronic program guide, multichannelling, enhanced programming, which I think are at least pseudo datacasting—then I think we are at a competitive disadvantage just in relation to datacasting. There is the separate question about whether there is a synergy between datacasting and broadcasting and I guess that is what you are asking. It is a barrier to entry, I think, but probably not an insurmountable one with all other things being equal.

Mr Wolpe —I agree.

Senator TCHEN —Ms Hambly, you said that at the moment the proposal is to distinguish between broadcasting and datacasting through program genre. You said that the definition limits datacasting to information, predominantly information, and that this was a limitation because viewers need to be engaged and entertained. I always understood that John Fairfax, in particular, has always been proud to engage readers through information rather than entertainment.

Ms Hambly —What we do in our newspapers is a combination of things: we provide news, we provide opinion and we provide lifestyle information and lifestyle services. It is the combination of those things that we do in the newspapers we produce and that we do in the Internet services we presently provide that makes them compelling. There was a suggestion earlier that the difference between television broadcasting and datacasting would be that television broadcasting would be predominantly about entertainment. That has been flipped in the present bill, and essentially datacasters can have virtually no entertainment value.

Senator TCHEN —Ten minutes.

Ms Hambly —That means that there is going to be a big debate every time we put out something that amuses and entertains people, albeit being primarily information and news based.

Mr Wolpe —Senator, if you took our newspaper and you made it all black and white with all the headlines the same size and no bold, no italics and so on, that is what we have under this bill.

Senator TCHEN —I was just thinking that there are obviously ways of presenting information that can make it entertaining, but predominantly your basic rationale is to provide information rather than entertainment. In answer to Senator Bishop's question, `Supposing you were able to start designing this legislation from the beginning, how would you distinguish between datacasting and broadcasting?' you said that datacasting interacts. Is there anything else that distinguishes them? Is there anything else you would put in the legislation to distinguish between datacasting and broadcasting?

Ms Hambly —If I was starting from the beginning?

Senator TCHEN —Yes.

Ms Hambly —No, there is not. But Bruce thinks differently.

Mr Wolpe —There was an excellent submission by Optus which discussed this. Broadcasting is live and everyone gets it at the same time, so stored information could also be a distinguishing factor.

Senator TCHEN —So interactivity would be the prerequisite of the distinction?

Ms Hambly —Yes.

Senator TCHEN —How often would there be interactivity? Every five minutes?

Ms Hambly —Sorry?

Senator TCHEN —You see, interactivity requires two-way communication. Supposing someone comes in, switches on the datacasting service and sits back for 24 hours. There is no interactivity there. There is the capacity to interact, but actual interaction does not occur. So, are you talking about the capacity only or the actual interaction?

Ms Hambly —I am taking about capacity. I do not think you could run a viable service where, if people did not click on something, it clicked on it for them.

Senator TCHEN —In that case, if the audience does not respond except to take a passive role, then there is no distinction between broadcasting and datacasting.

Ms Hambly —There is in the capacity.

Senator TCHEN —But if the capacity is not used, there is no interaction.

Ms Hambly —The service is a different service because of what it offers, not because of what the user chooses to do with it.

Senator TCHEN —Yes. But you did say that the difference is interactivity. And if there is no interactivity—regardless of whether or not there is the capacity—there is no interactivity.

Ms Hambly —I think it is an arid argument to discuss whether interactivity means that the person does it or that it is available.

Senator TCHEN —You need to have a workable distinction, though. In reference to protection of investments—I cannot remember the context—you made the comment that there needs to be certainty to protect the investments of datacasters coming into the market. Doesn't the same thing apply to the existing broadcasters? Shouldn't their investments be protected as well?

Ms Hambly —I do not doubt that, but free-to-air broadcasters have a great deal of certainty as to the tenure of their licences and what they can do with them.

Senator TCHEN —But not if the distinction between datacasting and broadcasting is blurred.

Ms Hambly —You are talking about the entry of new competitors. I do not think that there are very many industries where people continue to argue that certainty for the purposes of investment means and requires that you protect that industry from competition, and that is what you are talking about here. When I am talking about certainty, I am talking about certainty on the licence conditions so that people know what they can do and for how long they can do it and therefore they can make a decision on what they are prepared to invest. That is very different from saying, `If we have got that kind of certainty, we will make the investment decisions and we will deal with the competition in the market just as we do every day.'

Senator TCHEN —That might be a good point to go on to your comments about proposed section 57, the ABA's determination. You said that the ABA's ability to take a datacaster off the air is not acceptable. Can you tell me whether the ABA has the same power regarding existing broadcasters in radio and television?

Ms Hambly —Those section 57 provisions, I understand, are new to the act and they are not mirrored in any other place in the act.

Senator TCHEN —So the ABA cannot, because of a breach of its licensing conditions, stop a radio station from broadcasting without the possibility of their taking out an injunction?

Ms Hambly —I do not think that there are the stays on injunctive powers that there are here. I may be wrong, but that is my understanding.

Senator TCHEN —I have one last question. In your final comments in your written submission you talked about the migration from analog to digital. I read this to mean that the translation should be done as quickly as possible.

Ms Hambly —Yes.

Senator TCHEN —So you are advocating early termination of the analog system?

Ms Hambly —Yes.

CHAIR —There being no other questions, we thank the Fairfax representatives for appearing here today. Thank you, Mr Wolpe and Ms Hambly.

[12.32 a.m.]