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Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000

CHAIR —I welcome representatives from the Department of Communications, Information Technology and the Arts. At 5.40 p.m. we have Dr Duane Varan from Murdoch University in Western Australia on videoconference, so we will interrupt proceedings at that point. We will then break for dinner and then after dinner we will hear from the department and ABA together for further questioning. I invite the department to make an opening statement.

Dr Badger —I do not intend to make an opening statement.

CHAIR —In which case I will hand over to Senator Bishop to begin questioning.

Senator MARK BISHOP —Is no-one from the department going to respond to the various comments and issues raised by the witnesses? It is normally customary in bill inquiries for the department to go through the points and give an explanation or response. This is not estimates.

CHAIR —I suppose it is a matter for the department to choose. It would be helpful to the committee if you wish to pick up on any of the points that have been made during the course of this inquiry. But if you do not plan to do that, we will invite the senators to question you.

Dr Badger —We are prepared to comment on any issue that the committee wishes to raise. There has been a very large number of issues raised in various submissions. I would prefer to respond to those that you regard as being significant.

CHAIR —That is fine, if that is your choice. Senator Bishop, would you like to proceed?

Senator MARK BISHOP —I am not so sure I am happy with that, Chair. I have never been in a bill inquiry where the relevant department was not represented by a senior person to go through and address the comments at the outset and then take questions. If the department does not want to do that, so be it.

Dr Badger —I am sorry. Our experiences are different, that is all. We did not come prepared to do that. We did not do that for the last bill. We are willing to help as best we can, but we did not anticipate doing that and we are not prepared along those lines at this stage.

Senator MARK BISHOP —Who is here from the ABA?

Dr Badger —The ABA is not here at this time.

CHAIR —As I said, we are going to hear from the department until 5.40 p.m. We will then hear Dr Varan from Murdoch University. We will then have a dinner break and the ABA will be here soon after 7 p.m.

Senator MARK BISHOP —The first issue we need to discuss is the distinction between category A and category B. How will the department differentiate between the two?

Dr Badger —I will ask Dr Pelling to make some comment on that. In the legislation, the responsibility for making judgments, where that is necessary, will rest with the ABA.

Senator MARK BISHOP —I am aware of that.

Dr Pelling —The approach set out in the bill basically is to define two principal categories of services.

Senator MARK BISHOP —Mr Pelling, I think you can presume that we understand what the bill says and what is in the explanatory memorandum, that category A is broadcast and category B is specific items reserved to datacast. You can take that as a given. What I am really asking is: the submissions have been quite critical of that genre based distinction and, in particular, the distinction between what is children's services, what is education, what is information and what is entertainment. Is entertainment properly a means for educating children, all those under the age of 12? If there is a significant entertainment factor in a product, is that properly and exclusively the right of broadcasters to transmit? You would be familiar with the discussion over the last two days. How are those fine distinctions going to be resolved?

Dr Pelling —It is a bit difficult to respond without responding to specific issues. Basically the government looked at a range of options for distinguishing between datacasting and broadcasting through the extensive review process it did last year and decided, on the basis of the evidence that it had before it, that an approach based on program distinctions—which, if you like, reserve certain categories of television programs as being the purview of the commercial and national broadcasting industry but allowed datacasters to do a range of other things—was an appropriate way of distinguishing the two kinds of services. The fundamental starting point, as you are well aware, is that the parliament decided in 1998 that a distinction should be drawn between datacasting and broadcasting. The government looked at a whole range of options, and most of the players who have been before this committee made extensive comments on the process on a number of occasions. This is the approach that the government agreed to.

Senator MARK BISHOP —Why did the government choose that genre based approach?

Dr Pelling —I think it considered it to be the best of the available options that were before it.

Dr Badger —If you have a look at the review process, you will see that we are confronted with a number of propositions, ranging from arguing that datacasting services should be simply text based services to those with constraints upon the technology—whether they should be constraints involving the speed of the picture, whether datacasting should be constrained to have limited video as you might have now on an Internet page, et cetera. All those involve a series of options which are really about constraining the ability of the technology to reach its full potential in providing these sorts of services. On the other hand, there was an approach which was about differentiating between datacasting and what is the essential nature of a television service or a broadcasting service. The constraint was on no more broadcasters. So this approach is the one which is bound up in saying, `We will identify those things which are in broadcasting and the essential nature of broadcasting is those sorts of things that you see on television.' You could take that to an extreme, but what has been done is that datacasters are allowed a range of activities. At the same time, we are not going to conflict with the parliament's desire that there be no more broadcasters, and hence the approach of the genre which says that the datacaster will be allowed to do some things but certainly not the core things that belong to broadcasters.

Senator MARK BISHOP —No. It appears that broadcasters are going to be allowed to do nearly everything they have traditionally done.

Dr Badger —Yes, that is what the legislation says.

Senator MARK BISHOP —And datacasters are really in a little box in the corner, and they can provide text or financial information or very restricted educational services.

Dr Badger —They are allowed to provide a restricted range of genre of programs. That is the differentiating point.

Senator MARK BISHOP —Yes, one is allowed to provide essentially everything and the other has a very small nibble at what it can provide.

Dr Badger —That is right.

Senator MARK BISHOP —I appreciate the 1998 framework and the need to maintain the distinction between broadcast and datacast. I am not arguing about that. Another way to have gone down the path would have been to differentiate on the basis of interactivity. Broadcasting is not, as you and I have understood for 40 years, interactive. It is point to multipoint. It is a constant, passive, linear stream. The one critical difference for datacasting is interactivity. Why didn't the government choose that option?

Dr Badger —I am not going to comment on why the government made its decision, obviously. That is a policy matter for the government. If you look at the review process we went through, you will find that one of the options in the review process that we canvassed in defining datacasting was the one to do with interactivity. If you do go down that track, however, you find that within that there are a series of issues about what happens in an interactive system. You could have a system which has a form of interactivity to it which, by and large, allows you to store an entire television service on a set-top box, and then you have to make up your mind whether that is what you wish to happen, once again, allowing for the proposition that the act says there are to be no new broadcasters. I presume, in looking at the range of approaches available to it, that that is the sort of thing the government has taken into account—that, although interactivity has a range of defining characteristics, it does not necessarily remove all the possible difficulties in differentiating between a broadcasting service and a datacasting service.

Senator MARK BISHOP —No, I suppose that is fair comment, Dr Badger. What happens when in two or three years time the technology has so developed that the free-to-airs are able to evolve into providing interactive services, as I am sure they will be able to? Does that then mean that the datacasters will still be denied, as they are now?

Dr Badger —In the bill that is being proposed there is a provision for a review of the genre arrangements.

Dr Pelling —The proposed regulatory arrangements in schedule 6 will be reviewed in 2003.

Senator MARK BISHOP —If the point of the bill is to bear the cost of the mandatory legislative conversion from analog to digital, and that is being done by bringing extra competitive forces into the market by taking away traditional broadcast product from the broadcasters—and that is the justification for the loan of spectrum—when the situation changes in 18 months or three years time and interactivity is readily available in the marketplace, we will still have the situation, as the bill currently stands, that new aspirants—that is, datacasters—will not be able to offer services.

Dr Badger —The datacasters will be able to offer a range of interactive services. In fact, that is probably what you would expect a large amount of their activity would be in. What they would not be able to provide is interactive services which allowed them to provide programs that fall within the genre constraints.

Senator MARK BISHOP —That is correct, yes.

Dr Badger —What we have within the bill, in order to recognise the possibility of changes in the environment in which all the players operate, is a review of the regulatory arrangements which would give the government the ability to decide where the system is then and whether there is a reason to change what we have put in place. The idea of the datacasting set-up is to allow for a range of new services to be introduced. The constraint, of course, is the one on no new broadcasting services. The Australian system allows new services, whereas, by and large, in the US system in the conversion there are no arrangements for new players to come in at all.

Senator MARK BISHOP —But the new services that datacasters are able to offer are really so limited that it is going to be difficult to build a business model around them.

Dr Badger —Once again, I think we are getting to what is true in the debate on all these subjects: it is a matter of judgment as to how they are regarded. They are certainly restricted and that is the intention, because they are not to be commercial broadcasting services. However, we have representations from broadcasters who believe that the datacasters will be allowed to get into, to some degree, the space that they regard as broadcasting. In this exercise there is a judgment, and that is the one that is evident in the bill about where we come out.

Senator MARK BISHOP —Can you give us any update on the uptake of HDTV around the world? We have had quite a range of evidence that sales to consumers and dealers in the United States are very minimal, that the uptake in the United Kingdom has been driven by pay TV and that Japan is now backing off from mandating HDTV. It appears that Australia is going to be leading the world and is the only country that is mandating HDTV. Is that correct?

Dr Badger —Let us go back to your first question. It is certainly true that the take-up of HDTV in the US has been a lot slower than people anticipated. We would have to check as to the situation there now. There are any number of reasons for that. One is that it appears there have been transmission difficulties with the standard that was adopted in the US. I think the ins and outs of that are best left to the engineers, but certainly that has been one of the reasons why the take-up there has been less than a range of people expected. With the UK system, they decided—predominantly, I think, because of a range of spectrum shortages that they had—to wait until they switched off the analog system before they contemplated HD, so there obviously would not be any demand for HD in the UK environment.

Senator MARK BISHOP —But they are essentially driving it through pay TV, aren't they?

Dr Badger —You are saying that a lot of the major driving for the take-up of even SDTV is via the major role played by the pay TV operators. Once again, there is a range of countries that are about to make detailed decisions about their regulatory environments—which standard they are going to adopt, whether they are going to go for the European or the US standard. I am not absolutely sure whether anybody else has mandated HD, but certainly broadcasters in the US will have the physical capacity in spectrum to provide HD—and people generally follow the US.

Senator MARK BISHOP —That is right, but let us go back to the first point. There is no other country in the world that has mandated HDTV. That is the evidence we have received. If you have advice to the contrary, please tell us.

Dr Badger —In terms of the legislative requirements in these countries, I have no reason to disagree with that.

Senator MARK BISHOP —We will accept that as agreed ground, and there may well be the ability and the capacity to offer HDTV in the United States. I do not quarrel with that as a statement. But the evidence has suggested to us that, for a range of reasons related to desires of consumers and how they allocate their scarce funds in purchasing a consumer product, consumers are not purchasing the HDTV. Some of the reasons advanced are: that a range of the other services are available through SDTV; that the improved quality of the screen is not so high as to warrant spending the extra funds; and that the extra funds are somewhere between $5,000 and $30,000 for a TV, and 99 per cent of the world does not have those sorts of funds. That being the case, where is this whole issue going to go?

Dr Badger —If you look at the Australian system and what we have done with the legislation—and this is where there is a difference between the 1998 framework and the legislation we have got in place—you see that we have effectively mandated a dual HD-standard definition system. That was a response to the range of representations that the government had from consumer groups, et cetera, and a response to the sorts of arguments you have just put forward. In the Australian system, we have the flexibility for people to go down the standard definition path if they believe that the improvement in picture quality from a standard picture to a high definition picture is not for them or if they cannot afford the high-end sets. The system will also provide for them by mandating standard definition.

Senator MARK BISHOP —They will be able to enjoy a system better than analog through the SDTV with a range of additional services. It really does beg the question: if you are getting most of the additional services, Internet, interactive TV, some degree of picture improvement and some degree of audio improvement, why would you want to take the next step and go to HDTV?

Dr Badger —I suppose the answer to that in terms of the way it has been approached is to turn the question the other way: why would you close off the option of HDTV now when you are unsure as to whether it will in fact down the track be a significant driver of take-up or something that consumers want? It is the other side of the coin.

Senator MARK BISHOP —That is the other side of the coin, but the other side of that coin is a big punt, based on the advice we have received from the retailers, the consumer groups and the industry organisations and experience in the UK, the US and Japan. Yes, why would you write off that option? But, having chosen to have it, the question then becomes one of cost. We can grow strawberries in Antarctica if we want to.

Dr Badger —There are people who are very pro-HDTV. Certainly the broadcasters or the major number of the broadcasters believe that the increase in picture quality that comes with HD will be the major driver once the amount of program that is available on HD comes on stream and increases dramatically. Really that will depend on the US settling its problems with its transmission system.

Senator MARK BISHOP —Dr Badger, you and I earn incomes greater than nearly every person in this country, probably 90 per cent of the population. Are you going to spend $5,000 or $6,000 to put one of those in your living room?

Senator CALVERT —Up to $30,000.

Senator MARK BISHOP —Senator Calvert reminds me it is up to $30,000 to put one of those in your living room.

Dr Badger —The question is more—

Senator MARK BISHOP —That is the question.

Dr Badger —No, it is not, because I can decide to buy the lower end set. Somebody who wants to spend the money on HD can do that now or down the track, as others have argued, when the price of HD sets will drop over time dramatically. But in our system we have not closed off the option of you, I or anybody deciding to go down the standard definition route.

Senator MARK BISHOP —No, we have not closed off that option. We have left open the option for Australians across the board to spend somewhere between $6,000 and $30,000 to buy a TV set. We have left that option open. I agree with you, and we might have a discussion in two or three years time to see how many of them purchase those TVs. We both know where that discussion is going to go in two or three years time. But, having left that option open for people to spend so many thousands of dollars on TVs, the cost that is being paid is the allocation of spectrum. Five-sevenths is being allocated to the broadcasters. That is the real cost that is being paid. The opportunity cost of that spectrum allocation, according to the man from Optus, was $2.1 billion. Do you have any reason to doubt his figure?

Dr Badger —No, I do not. It is a highly speculative game, valuing spectrum.

Senator MARK BISHOP —It is.

Dr Badger —Especially that type of valuation. But at the end of the day, if we had gone down the route of dividing up the spectrum and not allowing seven megahertz to go to each of the broadcasters, they would not have the option of HD down the track. If you put that together with the ban on additional broadcasters until 2007, or whatever year, you are left with the question: why would you take the other approach?

Senator MARK BISHOP —There are a number of reasons why you would take another approach, and one of them does not involve giving $2 billion worth of scarce resource to the free-to-airs. On that point, have you done any analysis or assessment of the value of that spectrum?

Dr Badger —The only valuations that have been done have been in the context of the potential sale of datacasting spectrum, and that is not being done in a systematic way by us. People in the marketplace have done it. But, once again, Senator, we have mandated HD and we have loaned the seven megahertz to the free-to-airs, the understanding being that, at the end of the simulcast period, they will return seven megahertz. That is the approach that has been taken in the United States. While they have not mandated—there is a difference there—they have allowed the broadcasters to have the capacity to provide high definition television.

Senator MARK BISHOP —Another analogy is that you and I might want to buy a Jensen Healey interceptor at $230,000. They are in the marketplace, and we can import them from wherever they are made—Britain or Italy these days. It might be nice if the government reserved us the option to be able to purchase them in three or four years time, but this right for us to watch HDTV at somewhere between $6,000 and $30,000 strikes me as being an illusory right.

Dr Badger —I have canvassed the issues. The $6,000 to $30,000 are prices that we are talking about now. In three, four or five years time, you are talking about a different environment. The world changes as you get a much greater supply of HDTV product out of the US.

Senator MARK BISHOP —If we get a greater supply of HDTV product out of the US.

Dr Badger —And there is the argument from the broadcasters of very strong support for HD, and particularly allowing the system to provide it. They are the issues involved, and the government has taken its decision.

Senator MARK BISHOP —The datacast licences are going to have a life which expires when—30 December 2006 or 2007?

Dr Pelling —There are two kinds of licences: the content licence and the transmitter licence. Which one are you referring to?

Senator MARK BISHOP —The content licence.

Dr Pelling —The content licence does not have an expiry date.

Senator MARK BISHOP —Well, in that case, I am talking about the transmitter licence—the one that expires.

Dr Pelling —The transmitter licence will have a term of up to 15 years in total.

Senator MARK BISHOP —What happens in 2007 when the datacast licence expires? What does it become? Does it become a nothing with no—

Dr Pelling —The licence does not expire. Basically, if a person buys a datacasting licence now they get the right to operate a transmitter in that spectrum for up to 15 years. It is a 10-year period with one five-year period of renewal. The bill provides that, for the matter that can be transmitted through that transmitter prior to the end of 2006, the service has to be a licensed datacasting service—in other words, a service which has a datacasting content licence.

Senator MARK BISHOP —I am talking about the moratorium period for the licences for the free-to-airs which expire in 2006. If nothing is done, what status will those licences have at that time?

Dr Pelling —If you have a datacasting transmitter licence after 1 January 2007 you will be able to use it for any licensed service under the Broadcasting Services Act.

Senator MARK BISHOP —Will it convert to a broadcasting licence?

Dr Pelling —No; it allows you the option of taking out a broadcast licence, subject to all the other requirements of the act. So you could either do licensed datacasting or you could do a licensed broadcasting service—or both.

Senator MARK BISHOP —On the relevant date, 1 January 2007, could I apply for a broadcasting licence?

Dr Pelling —There are different classes of broadcasting licence and different conditions will apply. If you are referring to, for example, a subscription broadcasting licence—yes, you can. That is an easy licence to apply for. You apply in writing to the Australian Broadcasting Authority and pay an administrative fee. If you are referring to a commercial broadcasting licence, that is a different matter because, under the current legislation, there are a range of provisions which apply to a commercial broadcasting licence such as planning provisions and ownership and control provisions. You would have to meet all those requirements before you could get a licence. It leaves open the option but it does not give you any automatic entitlement to it.

Senator MARK BISHOP —I am trying to establish what is meant by `leaves open the option'. Does it give me a start in the race to have a broadcast content licence, or does it have no significance at all? Now I apply for and receive a datacast licence and I can transmit datacast program material. Come 2006, that period expires. I want to know what is the significance of that datacast licence. Does it just become like an out-of-date driver's licence and hold no value, or does it have some residual value?

Dr Pelling —No, you will be in effect occupying the spectrum for a period of up to 15 years. What that provision does is say that the range of things you can do on that spectrum are increased. I also point out that there is a review in 2005—as you are aware, because you have asked a number of questions about it—into the regulatory arrangements that should apply to that conversion process, if you like, and the financial arrangements that should apply to it as well.

Senator MARK BISHOP —I understood that there will be a review, and we have had a lot of questions about bringing it forward, on the regulatory and revenue implications. At the moment, subject to that review and any changes deriving from it, that datacast licence that I now have will enable me to do extra things post-2007. What are all of those extra things that I might do?

Dr Pelling —They are other forms of licensed broadcasting service. For example, if I can give you a highly speculative scenario, you might be providing datacasting services under a datacasting licence until that date; and, after that date, you might decide you want to provide, as part of your service, a channel of pay television. What you would do then is go to the Australian Broadcasting Authority for the relevant licence, and that would provide you with the ability to provide that service.

Senator MARK BISHOP —If I wished to go into the commercial broadcasting business, as opposed to the pay TV broadcasting business, would I be able to do that?

Dr Pelling —Not automatically. Mr Buettel might like to clarify the range of regulatory issues which apply to getting a commercial broadcasting licence. There are a number of provisions set out in the Broadcasting Services Act about how commercial broadcasting licences are allocated.

Senator MARK BISHOP —They are in the BSA.

Dr Badger —Those processes have to be followed.

Dr Pelling —They would all have to be gone through.

Senator MARK BISHOP —Has the department done any analysis of the value of the datacast licence that we are discussing in enabling me to do a whole range of extra things that I am not currently able to do?

Dr Pelling —That is basically the point of the review in 2005. It is going to be looking at issues like the value and whether there is any additional revenue which the Commonwealth should be getting for the use of that spectrum for the additional purposes. I presume that business will factor those sorts of things into their business calculations up-front anyway.

Senator MARK BISHOP —Doesn't that mean that those organisations that apply for and receive the datacast licences now are going to have a head start in converting over to a form of general broadcasting in the next six-year period?

Dr Pelling —Anybody who buys a licence now will have a head start over anybody who buys a licence later, yes.

Senator MARK BISHOP —But what you buy with a licence now is the simple right to datacast category B programs.

Dr Pelling —According to the rules set out in schedule 6, yes.

Senator MARK BISHOP —That is right. You buy a limited right to datacast. You can datacast a limited range of product but, post 2007, you will be able to broadcast a much more significant range of product.

Dr Pelling —Yes.

Senator MARK BISHOP —And the review process in 2005 is intended to calculate the value of the licence in the lead-up to that conversion process.

Dr Badger —That is only one aspect of it.

Dr Pelling —That is part of it, yes.

Dr Badger —It is basically to set the environment for that process.

Senator MARK BISHOP —If you have previously allocated a licence for the 10 plus five years—the 15 years—between now and 2005 or between now and 2007 and all of a sudden it has a whole range of potential extra value, how does the government propose to recover that extra value if it is not in the licence now?

Dr Pelling —The review will look at the revenue arrangements that should apply to that licence. There will be a range of mechanisms presumably available. Just to give you one example, some sort of a betterment tax—if that is the right way of putting it—could be applied at the time. I imagine the government will be able to look at a range of options for recapturing the additional value of the licence if it considers that it has any.

Dr Badger —If you mean in a mechanical sense, we are essentially selling a transmission licence with the datacasting licence, the 10 to 15 years. The licences that we are talking about people using post 2006 are the content type licences. So there are two types of licences involved. This process is probably about the conditions under which you are able to change the type of content that you are able to transmit.

Senator MARK BISHOP —So a datacast content licence issued now will have a value and be sold off, but there is going to be so much extra content that will be able to be broadcast post 2007 that, presumably, the value of the licence will be higher then. My question now is: how is the government going to capture that value as it issues it?

Dr Badger —That is one of the essential elements of the 2005 review.

Senator MARK BISHOP —If that is the essential element of the 2005 review, between now, 2000, and 2005, how are you going to properly price the value of the licence issued prior to the review?

Dr Badger —The licences will be sold by auction, so the market will put a price on them, taking all those things into account.

Senator MARK BISHOP —So those who purchase the licence at auction have to take into account, perhaps, embedded value in the future, additional value that might be realised in the future or, indeed, the government attempting to reprice it post 2007?

Dr Badger —Or the government looking at the options available to it at that time.

Senator MARK BISHOP —Turning to the streaming audio-video review, where are the references to that in the bill? It is referred to in the minister's second reading speech. Where is it in the bill?

Dr Pelling —It is not a statutory review. It is not in the bill. The reason for that is that it is a much broader issue than just a digital television issue. So it has been referred to the ABA in a more generic sense.

Senator MARK BISHOP —Because of the social and cultural issues?

Dr Pelling —No. The issue in a nutshell is whether those services are broadcasting services and, if so, how they should be regulated.

Senator MARK BISHOP —Yes, that is right.

Dr Pelling —That is an issue which goes well beyond digital television. It is a broader convergence issue, so it is being dealt with a little bit separately from digital television.

Senator MARK BISHOP —Have the terms of reference of that review being finalised?

Dr Pelling —No, not yet.

Senator MARK BISHOP —When do you anticipate that will be done?

Dr Pelling —We do not have a specific timetable in mind, but we have started working on them.

Senator MARK BISHOP —You have already started working on the terms of reference?

Dr Pelling —Yes, and I believe it is a review which will be gazetted. It is a normal reference to the ABA.

Dr Badger —It really depends on the final form of the review and the way we refer the review to the ABA. It could be done as a formal direction. If it is a formal direction, then that implies certain things about the way it is done.

Senator MARK BISHOP —I accept that. From memory, there was a reference to the review within 12 months in the minister's second reading speech.

Dr Badger —That is right, there was.

Senator MARK BISHOP —But when we looked in the bill—

Dr Badger —No, it is certainly not in the bill. That is a different sort of review.

Senator MARK BISHOP —So it is intended to be an ABA review of a fairly wide nature, I take it.

Dr Pelling —It will involve full public consultation in the process.

Senator MARK BISHOP —In terms of allocation of spectrum to the community broadcasters, the minister, in a press release back in March 1998, made a fairly strong commitment to allocating one spectrum channel to the community broadcasters. Are you familiar with that undertaking, Dr Badger?

Dr Badger —I think the undertaking was that, as part of the spectrum being made available to a datacaster, there would be provision of capacity for community broadcasters.

Senator MARK BISHOP —It says:

The digital environment opens up new localised programming opportunities for all broadcasters, including the community television sector which will be guaranteed free access to the spectrum needed to broadcast one standard definition digital channel.

That was from the minister's media release on 24 March. The community broadcast people, when they appeared before us today or yesterday, were quite critical that, while the promises were made, no action had been delivered. Where are we at with delivering on the promise?

Ms Page —The government has decided to defer the transition of community television from analog to digital transmission and has agreed to allow the sector to continue to have access to the seven megahertz of spectrum for analog transmission for the time being. So it is the status quo at the moment.

Senator MARK BISHOP —When was that decision made?

Ms Page —That decision has been made in recent weeks and is being communicated to the community television sector.

Senator MARK BISHOP —They were unaware of it this morning.

Ms Page —Yes, I think the correspondence to them is being finalised.

Senator MARK BISHOP —So the decision has been made and the letter is in the post, is that what you are saying?

Ms Page —I am unclear as to whether the letter has been signed.

Senator MARK BISHOP —Arising from this morning's discussion, the decision has been made and will be communicated in writing to the community broadcasters sometime in the future, is that where we are at?

Ms Page —Yes.

Senator MARK BISHOP —So we are going back on our promise, are we?

Dr Badger —No, this is about the continuation of the community broadcast on the analog spectrum, which originally was supposed to cease at the end of this year. As far as the commitment on digital television is concerned, the operative word is that the commitment is still there.

Senator MARK BISHOP —Perhaps I misunderstood Ms Page. The promise that was made back in March 1998 stands?

Ms Page —Yes, there has been no decision contrary to that commitment given by the government. No date was given in the original commitment by the government either.

Senator MARK BISHOP —That is correct, no date was given in this document at all. But I think it was presumed by readers of this document that sometime between 1998 and 1 June 2000 there might have been some action consequent upon the promise.

Ms Page —The roll-out of digital services generally, television and datacasting, and the sale of spectrum will happen over a period of time, which means that there may well be other opportunities for the allocation of spectrum to the community broadcasters.

Senator MARK BISHOP —And we know seven megahertz has been given out until 2007 and is coming back after that. So the community broadcast people could be waiting a long time, couldn't they, Ms Page?

Ms Page —Not necessarily.

Senator MARK BISHOP —Let me ask this question: does the government have any specific plans to allocate the one standard definition digital channel in the next 12 months to the community broadcast people?

Ms Page —The government has no plans that I am aware of that would cut off options for the allocation of spectrum to community television broadcasters.

Senator MARK BISHOP —That is a good answer, but I did not ask you that. You have answered in the negative; I asked you in the positive. Has the government any plans to allocate the one standard definition digital channel in the next 12 months?

Ms Page —I am not aware of any plans, but that does not cut off options for the community broadcasters. All spectrum is unlikely to be allocated in the immediate future.

Senator MARK BISHOP —You are unaware of any plans. Is it your area of responsibility, Ms Page?

Ms Page —Yes, I am the responsible division head.

Senator MARK BISHOP —You have not been directed to do any work on that issue, then?

Ms Page —In terms of allocation of spectrum for community television operators?

Senator MARK BISHOP —Yes.

Ms Page —No, not at this stage.

Senator MARK BISHOP —Or any preparatory work for that?

Ms Page —Certainly there is a range of issues that we are dealing with in relation to the migration of community television to digital, and that work is ongoing.

Senator MARK BISHOP —That is general work. Have you been allocated any work since 24 March 1998 to allocate the one standard definition digital channel to the community broadcast people?

Ms Page —Allocation of spectrum would not ultimately be the responsibility of the department. The department's responsibility is to provide policy advice on possible migration paths and issues in relation to the status and licensing of community television. That work has been going on over that period and is continuing.

Senator MARK BISHOP —If I were the minister in six months time and I said to the head of the department, `I want to honour that promise of Senator Alston and allocate one standard definition digital channel to the community broadcast people,' who would the secretary to the department allocate that work to?

Ms Page —That work would have to be done in consultation with both the ABA and the ACA, because it would be linked inextricably to the planning process for digital television.

Senator MARK BISHOP —Who would I ask to be responsible for that work? Dr Badger, or you, Ms Page?

Dr Badger —In terms of setting up the environment for the policy work, the people who deal with the community television function would do that. They reside within Ms Page's division. In terms of the technical work which would have to be done to identify the particular piece of spectrum, the ABA would have to be involved, and that would be determined by its planning process.

Senator MARK BISHOP —That is the technical work, but the policy work gets done before the technical work, and that is the responsibility of Ms Page's division, and you have not been asked to do any of that work since March of 1998, have you?

Ms Page —There has been, as I said, ongoing work that involves the transition, and that involves a variety of issues—

Senator MARK BISHOP —I know there has been ongoing work about allocation of spectrum and planning work and policy work related to that. We have done nothing but discuss it for about three years. My specific question is the allocation of one standard definition digital channel to the community broadcast people. I am putting to you that you have not been asked or directed to do that policy work preparatory to the technical work. Is that correct?

Ms Page —Yes, that is correct.

Dr Badger —Having said that, Senator, before Ms Page took over the division, there was a range of work done about not only the technical side but also how you would fit a community television service within a seven-megahertz multiplex along with other services.

Senator MARK BISHOP —When did you take over the division, Ms Page?

Ms Page —3 February.

Senator MARK BISHOP —This year?

Ms Page —Yes.

Senator MARK BISHOP —Who was your predecessor?

Ms Page —Dr Alan Stretton.

Senator MARK BISHOP —Dr Stretton is still around, isn't he?

Ms Page —He is in Paris.

Senator MARK BISHOP —Was Dr Stretton asked to do that work?

Ms Page —I think Dr Badger has answered the question in terms of the nature of the work. There was certainly work done prior to my arrival in the division on various options for accommodating community television. But your question related to the allocation of a particular technical model.

CHAIR —Senator, with respect, I think we are getting away from the bill and getting into something that vaguely resembles an estimates hearing and we should be talking about the bill.

Senator MARK BISHOP —I have made the point. I do not need to pursue it any further.

Senator BOURNE —In that letter that you are sending, are you extending the analog licence for the community broadcasters for a period, for another year?

Ms Page —The letter is Senator Alston's.

Senator BOURNE —Is Senator Alston extending the period?

Ms Page —I would be unwilling to speak about the correspondence until it is signed.

Senator BOURNE —Whenever you decide to actually allocate that two megahertz or whatever for a standard definition television station to the community sector, if the datacasting licences have already been allocated—and we do not know how long the extension is for, so they may have been allocated—and you then attempt to change the licence conditions, don't you think that is going to cause some legal problems?

Ms Page —As I said earlier, there are a number of options open to the government in terms of the allocation of spectrum for datacasting purposes for digital. It is not necessary, for instance, that all spectrum will be sold at once. Given that the digital channel planning process is still going to extend over a period of time, it is likely that spectrum may be allocated in more than one allocation process. Indeed, while ever the community television licensees are occupying channel 31, that is another possible area of spectrum which the government has indicated it is not about to release and they are able to continue to occupy that. So there are a number of options open to the government in terms of release of spectrum and combinations.

Senator BOURNE —That is all true but they cannot simulcast analog and digital on channel 31. They have seven megahertz. They can only simulcast one or the other. You are going to need spectrum from somewhere else as well as 31, unless you intend to cut out their analog licence and only give them a digital licence and not have them simulcast. Is that the case?

Ms Page —The government has not made a decision on the transition path yet for community television.

Senator BOURNE —It seems to me the government have made very few decisions about the community broadcasters. They have made a lot of decisions about everybody else and the community broadcasters are well and truly behind the eight ball. That is not your fault. I must have a word with the minister. Thank you.

CHAIR —Will you be back after dinner?

Senator BOURNE —No. I am going to have to go unfortunately.

CHAIR —I did not understand that. I am sorry. I apologise to you for not letting you have the floor to ask questions. Do you have other questions which you would like to put on notice?

Senator BOURNE —Yes.

Dr Badger —Do you want us to stay or come back?

CHAIR —We are going to hear from Dr Duane Varan, an academic at Murdoch University. After that we will have a dinner break. So can you come back at 7 p.m.?

Dr Badger —Yes.

[5.40 p.m.]