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

CHAIR —I welcome representatives from the Australian Broadcasting Authority and the Department of Communications, Information Technology and the Arts.

Senator MARK BISHOP —Is Professor Flint attending?

Mr Tanner —We are trying to find out where he is. I expected him before now.

Senator MARK BISHOP —There are a few issues left to resolve. Can you explain why the government has decided to have the ABC and the SBS regulated by the ABA in terms of application for the datacasting licence? Why has that occurred?

Dr Badger —As we discussed earlier, I think the government's reasons for making these decisions are policy ones. Primarily, if you have the ABC and the SBS subjected to the same regulator as the commercial players, then you are looking to have consistency across the operators in the same service base.

Ms Page —One of the issues is that if you have a genre based regulatory regime, which is what is proposed, and the ABC and the SBS and the ABA had the ability to make judgments, conceivably you could have a system where three different bodies were making three different judgments on what constituted a certain sort of program.

Senator MARK BISHOP —That is right, because we are talking about how you classify a particular program that is going to be broadcast or datacast. Both the SBS and the ABC are creatures of parliament. They have an independent board and all other purchasing of program and programming decisions are decisions solely of the board, not decisions of government or of political parties or any other regulatory agency. But now for some reason the ABA is going to be given express power to second-guess decisions of those independent boards. That is a matter of some concern. Does the government not have confidence in the deliberations of the respective boards of those two corporations?

Mr Buettel —I think the regulatory regime in the Broadcasting Services Act applies to the ABC and the SBS in so far as they engage in subscription television broadcasting. So they are subject to ABA regulation to the extent that they engage in those activities.

Senator MARK BISHOP —How much subscription broadcasting do the ABC and SBS do?

Mr Buettel —I do not think they do any, but the way the structure of the act is set up—

Senator MARK BISHOP —Stop. They do not do any, hence that agency does not become involved. Thank you for the explanation. Let us come back to the issue. There is a significant policy decision that has occurred for the first time in 40 years since the ABC has been able to broadcast, and latterly with the SBS. The ABA is apparently going to be given power to make, in effect, programming decisions as to what is put on the air. My question is: what is the rationale for that?

Ms Page —As Dr Badger has indicated, we are unable to speculate in terms of the nature of the government's policy decision, but certainly when it released its original paper in relation to the datacasting review it did signal an intention that datacasting was going to be considered by the government as a new type of service and it indicated things such as that there would be an important question as to how datacasting should be regulated and which agency, if any, should have responsibility for that regulation. So I think there was a policy intent, if you like, of the government's at the outset to create a different type of service.

Senator MARK BISHOP —That might be correct, but let us not get too far ahead. The issue of programming is consequential upon going to a genre based approach, because you need to have an arbiter to resolve the issues in dispute.

Ms Page —Correct.

Senator MARK BISHOP —Let me ask this question: does the government have any criticism of programming decisions to date of either the ABC or the SBS?

Ms Page —I am not aware that that was a relevant consideration in relation to the determination of the regulatory framework.

Senator MARK BISHOP —No, you are getting a little bit ahead of me. The ABC has been purchasing content for 40 years and the SBS has been doing it for 15 years. They have been programming hundreds of hours a week. I am not aware of any criticism by this government or previous governments of their decisions.

Dr Badger —I think there is a difference. We are not talking about the ABA determining programming decisions of the ABC. The ABC board and management will decide on what goes to air in so far as that is the programming decision. The role of the ABA as the datacasting regulator is to decide whether a particular program would contravene the genre constraints. There are two different assessments. One is an assessment of the sort of program that should go to air by the people who purchase and whatever. The other is a judgment by the regulator, amongst the sorts of programs that those people wish to put on the air, whether some of those contravene the genre restriction. That is the ABA's judgment.

Senator MARK BISHOP —I must say I really do not appreciate that distinction. If the ABC and the SBS are uncertain as to whether a particular program may or may not come within the relevant category A or category B distinction, the only option is to flick it off to the ABA to issue a determination, and that really must occur before you spend hundreds of thousands of dollars purchasing particular product by those two corporations. So it seems to me that the ABC and SBS are being required to surrender independent authority in terms of purchasing programming to another regulatory agency.

Dr Badger —The discussion about the government policy we have talked about, why the government made this decision, is a matter we cannot comment on. But I will just point out a number of other things. Mr Buettel referred to the principles of the BSA. The principles of the BSA are quite clear: if the ABC ran a subscription service, then for that service it would be subject to the regulatory authority of the ABA. The ABC did have a subscription television licensee back four or five years ago.

Senator MARK BISHOP —If they had used it.

Dr Badger —If it had used it. The other example where an ABC activity is subject to the regulatory authority of the ABA is in fact the online environment. The ABC provides online services through its online activities and they, like everybody else, are subject to the online content regulatory environment of the ABA.

Senator MARK BISHOP —In terms of the take down provisions for offensive material?

Dr Badger —Yes. Like everybody else, to the extent that they are affected.

Senator MARK BISHOP —I suppose that is probably as significant as the reference made by Mr Buettel. I am not aware that the ABC has ever been in the business or intends to be in the business of putting out offensive or illegal material online.

Dr Badger —No, but the point I am trying to draw out is the fact that we are talking about particular activities. The datacasting service is a new range of activity. We do not have any evidence about the extent to which the ABC would get into that. The principle, though, is in the act, that it is inherent in the existing act that there are activities which could be undertaken by the ABC which would be subjected to the same regulatory environment as the commercial broadcasters.

Senator MARK BISHOP —Following that line of argument, Dr Badger, we had the extensive online discussion in terms of offensive material 12 months ago, and Mr Buettel has made another reference to subscription broadcasting. It appears that a policy decision has been made that in future—from 12 months ago—the ABC and the SBS will now be subject, in new spheres of activity, to general regulatory principles and not solely responsible to their own charter and their own independent board.

Dr Badger —The regulatory environment that I am referring to, the one particularly to do with subscription television, goes back to the 1992 act, so that principle has been there for a very long time. I do not think you can draw any conclusions from the independent decisions relating to online content and going back to the 1992 stuff on subscription and the recent decision on datacasting.

Senator MARK BISHOP —With due respect to Mr Buettel, I do not have much regard for that argument on the subscription being regulated by the BSA on the basis that neither the ABC nor the SBS have ever been involved in it. But we had the amendment last year to the BSA in terms of online content, regulation by the ABA to the ABC, and now we have the bill before us, again with the ABC and the SBS to be subject to regulation by the ABA. That appears, as a simple conclusion, to be a policy directive of government that those two corporations will be regulated by the ABA in new fields of endeavour.

Dr Badger —There is no evidence in what we are dealing with that there has been that decision.

Senator MARK BISHOP —No, the only evidence is that the two major amendments to the BSA in the last two years have both had the ABC to be regulated by the ABA. That is my entire argument. Whilst Professor Flint is here, we may as well explore with Professor Flint and his organisation how this will occur in terms of the category A and category B genre distinctions in the bill if passed in that form. How will the ABA give effect to it, Professor Flint? Can you perhaps educate us?

Prof. Flint —We will obviously on occasions, I suppose, have to use our determination power, but I would expect that to be the exception and that there will be a great degree of self-regulation. A lot of those genre distinctions are pretty obvious and I would have thought that the datacasters will themselves apply them, but if it comes to our having to issue a determination there is a staff in the ABA which is very well experienced in making decisions of this nature and they would advise the board on the proper way of exercising its discretion.

Senator MARK BISHOP —If the ABA does receive a request to make a determination by whoever is entitled to make such a request, is the process before you issue a determination a public process? Is it like a court of law: are submissions received and is argument heard and then a decision issued? Or is it simply a matter of the responsible officer issuing a determination?

Prof. Flint —The officers are well trained by our general counsel in observing all the proprieties of natural justice so that every opportunity would be given to a consideration of any submission. They would be treated properly. It would not just come straight to the board and we would not make a decision without that proper process.

Senator MARK BISHOP —No, I had not assumed that. Let us assume I am an interested stakeholder and I am aggrieved at a decision of the ABC to broadcast a particular program. I am of the view that it is a category A program, not a category B program. How do I approach the ABA to resolve that issue, and what will the ABA do in resolving that issue?

Mr Corker —The process is one whereby the instrument is of a legislative character, which is what the bill presently says. In those circumstances I would have thought that the ABA would have to run a fairly open and transparent process in reaching any determination, which would involve perhaps some public input. It is a policy issue for the ABA as to how it would run that process, but the net result being a legislative instrument, which is like a law making power, I would have thought that it would have to be a fairly broad process and involve a number of inputs before any final decision was made.

Senator MARK BISHOP —When the determination is issued, is that subject to appeal either to an appeal court type administrative body or an outside court?

Mr Corker —Action could be taken against the ABA, I would have thought, in the Federal Court, even though it is an instrument of a legislative character; and it is a disallowable instrument under the bill.

Senator MARK BISHOP —Can it be disallowed by both houses of the parliament?

Mr Buettel —Either.

Senator MARK BISHOP —Is there any express power in the bill for an aggrieved person to appeal the determination to a court?

Mr Corker —Not in the bill, but in other pieces of legislation such as the Federal Court Act or the Judiciary Act.

Senator MARK BISHOP —Is there power in those acts to appeal what is essentially an administrative determination of a regulatory agency?

Mr Corker —These are not, as I understand it, instruments of an administrative character. They are instruments of a legislative character. That is what the bill presently says.

Senator MARK BISHOP —If they are instruments of a legislative character, how can they be reviewed by a court?

Mr Corker —For example, for abuse of power or power exercised in good faith. There are a number of grounds upon which even delegated legislative decisions can be challenged in a court of law.

Senator MARK BISHOP —The instrument having been made a disallowable instrument, would that not seek to exclude review by courts, because the appeal is essentially to the parliament to disallow?

Mr Corker —It does not exclude the right to go to a court. It is a different regime. It is not a decision that would be reviewable under the Administrative Decisions (Judicial Review) Act.

Prof. Flint —As I understand it, the plans which we adopt for each licence area are of a similar nature. That is why we go through a very broad consultative process. But they could be challenged in a court if we had not behaved properly in coming to those conclusions.

Senator MARK BISHOP —Okay. I understand what you are saying there. Earlier today I think it was the representatives of Fairfax who made the complaint that there is no injunctive power in the bill to get an injunction from the Federal Court to stop the issue of a determination. That is the first issue. Secondly, if a determination has been issued, there is no stay power in the bill to apply to the Federal Court. Are both of those complaints correct?

Mr Corker —Certainly in the bill there is no stay power in relation to—

Senator MARK BISHOP —The issue of a determination.

Mr Corker —The issue of a determination.

Mr Buettel —Perhaps I could clarify here that the provision that stops the courts being able to issue a stay of proceedings relates only to certain ABA powers. One is the decision to impose or vary a condition of a datacasting licence. One is a decision to give a remedial direction to a datacaster. The final one is the decision to suspend or cancel a datacasting licence. In relation to those three powers, if the ABA takes action, an aggrieved party will be able to take administrative law action against them—either go to the AAT or the Federal Court—but the tribunal or the court will not be able to stay the operation of the decision pending their decision.

Senator MARK BISHOP —So the harm, if any, that has been occasioned by the determination by the ABA at first instance will continue until the court proceedings in the Federal Court are concluded.

Mr Buettel —Yes. If the ABA decides that, for example, particular programs that are being broadcast offend the genre rules and they impose a condition on the licensee that they not transmit that material, then they will not be able to transmit that material until that decision is overturned.

Senator MARK BISHOP —That is right. So even if in good faith the ABA has gone through proper process and natural justice, but in the final analysis come to a wrong decision—wrong in the context of it being overturned later by the Federal Court—there is no ability in the meantime to get a stay to stop the occasion of the damage.

Mr Buettel —Yes. There is no ability to stay the operation of the decision until such time as it is overturned.

Senator MARK BISHOP —So that is the stay power. There is no express power in the bill to get injunctive relief as well, is there?

Mr Corker —I do not believe there is such a power in this bill that is being examined, no.

Senator MARK BISHOP —You said no then, in the end, didn't you?

Mr Corker —I did say no.

Senator MARK BISHOP —I might ask, Professor Flint, for you to take on notice and advise us in writing as to the processes that the ABA will adopt when an application is made by an interested party for you to issue a determination so that we have that on the record.

Prof. Flint —Certainly, Senator.

Senator MARK BISHOP —Dr Badger, we had a discussion where Cable and Wireless Optus had valued the datacasting transmission licences at $2 billion. My question to either you or the ABA is: has either the department or the ABA done any independent assessment or analysis of the potential value of those licences?

Mr Tanner —The ACA, not the ABA, would be selling the licences.

Dr Badger —We have not done any structured assessment of the valuations of the spectrum. We are aware that some people in the marketplace have done some. An enormous number of scenarios are possible, upon which you value those licences, and it would depend on the final additions for the sale. But we have not done that.

Senator MARK BISHOP —Professor Flint, how is the ABA going to differentiate between enhanced programming involving video and multichannelling?

Mr Corker —I am not sure what you mean by `multichannelling'.

Senator MARK BISHOP —Multichannelling is when a public broadcaster or a free-to-air can broadcast on two channels at the one time.

Mr Tanner —My understanding of the legislation is that the difference is in the relationship of the program to the primary program. That is a subset of multichannelling. It is going to be legitimate—and other material which may otherwise be datacasting—on the grounds that it is enhanced programming because it has a sufficiently close relationship to the programming which is the same as on the analog service. That is my understanding of how the legislation works.

Senator MARK BISHOP —I think that is right, Mr Tanner. The agreement that was reached back in December of last year prohibited multichannelling and allowed enhanced programming in a very limited way—that is, when a TV match was on, it would be connected to the evening news bulletin or whatever. It has now been extended from a particular news program to any scheduled programming. I do not understand the difference between enhanced programming and multichannelling. We have been sitting here for two days trying to explore the difference. I am asking you, because it is going to come to you: what is the difference? How are you going to apply that difference? It really is the same.

Mr Tanner —The difference is going to come back to the meaning of the letters of that law. It is going to come down to an examination of the content in question and whether it is the view of the enforcing agency that the content has the requisite relationship which is set out in the legislation. I do not know that I could say any more hypothetically or in abstract about that.

Dr Pelling —There are three categories in the bill. There is what we refer to as category A program enhancement content, which is a range of content where:

(h)the sole purpose of the transmission of the content is to enhance a television program (the primary program); and

(i)the subject matter of the content is closely and directly linked to the subject matter of the primary program; and

(j)the licensee transmits simultaneously the content and the primary program ...

So that is a fairly specific set of conditions in one category of enhancement.

Senator MARK BISHOP —So if we are at the Australian Open, that will permit us to broadcast two semifinals at the same time attached to any scheduled program?

Dr Pelling —Not that particular provision. There is another provision called a category B digital program enhancement. To paraphrase, when somebody is transmitting a sports program, it allows the transmission of another program in the same sport at the same venue at the same time when both are occurring live. So that is the second category of enhancement.

Senator MARK BISHOP —And that is, for example, two semifinals at the Australian Open?

Dr Badger —That is.

Dr Pelling —But they are both very specific kinds of additional program enhancements. They are not multichannelling in the broad sense of the word.

Senator MARK BISHOP —Prior to the bill being published it was the industry's understanding that the extent of enhanced programming essentially went, on the second channel, to a different camera angle of the match or some text as to past performances, ratios and the like. It has now been extended, as you just read out, to two separate and different matches occurring in the same venue at the same time. If that is not multichannelling, with due respect, I do not know what is.

Dr Pelling —It is not an extension in that the act, as it currently stands, has no reference to enhancements and does not allow multichannelling. The only reference to enhancements is in the review: there was to be a review of program enhancements. So essentially we are not extending something from a particular position in the act to a new position; we are coming up with a range of enhancements that are allowed.

Senator MARK BISHOP —What is occurring is that the bill, as currently drafted, in this respect is significantly different from the understanding of industry last December where the enhanced programming was very limited with, for example, different camera angles of the same tennis match. But now it is much broader and much more liberal with different matches at the same venue. Whilst the other could be readily accepted as an `enhancement' in the traditional understanding of the word, we are now talking about different content being broadcast at the same time. That is why I asked Professor Flint what the difference was between enhanced programming and multichannelling, because in that context I am having trouble getting my mind around it.

Mr Corker —The ABA would approach it as if there were three exceptions to the simulcast requirement. Each one is quite specific. As Mr Tanner said, we would then have to look at the actual `enhancement'—in the general sense of the word—that went to air, see whether it came within any one of those exceptions and make a decision about that.

Senator MARK BISHOP —Do you regard a separate match between two different people as a different broadcast or merely as an enhancement of the original match?

Mr Corker —It depends on all the facts and circumstances at the time. You have to have a look at the tape and you have to have a look at the way in which it is being handled.

Senator MARK BISHOP —These are the facts and circumstances: we are at the Australian Open down in Melbourne and on court A we have person A and person B in a semifinal; on court B we have person C and person D in a different semifinal being played at the same time. They are the facts and we do not need any more. Is that enhancement or multichannelling?

Dr Pelling —In terms of the bill before you it is a category B digital program enhancement.

Senator MARK BISHOP —Okay. Let me give you another example. Several witnesses have suggested that elite subject matter within category A product would allow old episodes of the same show to be broadcast at the same time. Take the Seinfeld show. It is on Channel 9 or whatever it is at 7 o'clock at night and they want to run old episodes on the second channel. Is that enhancement or multichannelling?

Dr Pelling —If you refer to the provision in the bill, it would have to meet a number of characteristics. The sole purpose of the content would have to be to enhance the primary program. The subject matter of the content would have to be closely and directly linked to the subject matter of the primary program and the two must be transmitted simultaneously. Whether or not a particular kind of program was considered to be an enhancement or to go beyond the limit of the law would depend on whether it met those three particular characteristics.

Senator MARK BISHOP —Would different programs of the same series be an enhancement or different programming?

Dr Pelling —It is a bit difficult to comment on the spot on specifics. It is going to have to depend on a judgment at the time about whether it meets specific characteristics.

Senator MARK BISHOP —It is difficult to put you on the spot at the time but it is a live issue.

Dr Badger —If you are talking about it in the context of the earlier discussion about the tennis matches—

Senator MARK BISHOP —No, we have shifted from that.

Dr Badger —Yes, I know—they are expressly permitted. This takes it back to the discussion that you were having with the ABA. But on the general discussion—and we will talk now about the public discussion about what `closely and directly linked' means—I do not know that anybody has suggested, and certainly not to us—it might have happened in the last couple of days—that two episodes of the one program would be permitted.

Senator MARK BISHOP —That was the query that was raised this afternoon.

Dr Badger —I think we will have to look at that. It is not my understanding of the intention of the enhanced services provision.

Senator MARK BISHOP —Has the issue been raised with you at all, Professor Flint?

Prof. Flint —No, it has not. But, again, I would say that, when you first look at the provisions, it does not seem as though it would fall into that category.

Senator MARK BISHOP —Okay. I think we have explored this as far as it can go. Professor Flint, you gave a speech in Sydney on Monday evening, I think. I have only heard third-hand reports but the reports I have received are that you are of the view that there is no power in the ABA to engage in spectrum clean-up. That is what has been reported to me third-hand. Was that the thrust of your remarks some time this week at a public venue?

Prof. Flint —Yes, I would have said that.

Senator MARK BISHOP —So you are of the belief that there is no power in the ABA to issue directives to engage in spectrum clean-up?

Prof. Flint —I was talking about our present power and what I thought would be our power. But, of course, I do not know how the bill will develop as it goes through parliament.

Senator MARK BISHOP —So there is no present power in the act; is that your belief?

Prof. Flint —That is my understanding.

Senator MARK BISHOP —Does the bill as currently tabled remedy that deficiency?

Mr Tanner —Senator, these are extremely vague terms we are talking in. I have had the benefit of reading the chairman's speech as well.

Senator MARK BISHOP —I have not.

Mr Tanner —I think the term `spectrum clean-up' is sufficiently vague to be, perhaps, a little mischievous here. The ABA has some powers under the digital scheme to change the existing operating arrangements of analog broadcasters as part of the development of digital channel plans.

Senator MARK BISHOP —Which you have done in the Latrobe Valley?

Mr Tanner —Yes. We have done that in the Latrobe Valley. That is a very good example.

Senator MARK BISHOP —And it was mentioned during the telemetry discussion we had last week during estimates—people were required to vacate spectrum in the hospital area.

Mr Tanner —Yes, that is right. The issue, which I think is relevant to the datacasting issue, is that the ABA in the Latrobe Valley example was able to secure compensation for the service that was clearing so that it was completely compensated for the move from the channel it was using by the broadcaster that was acquiring the benefit of that move, which was actually Channel 9 in Melbourne, which was taking over Channel 8. The ABA has been able to arrange such compensation where clearance is desirable in terms of maximising spectrum efficiency and outcomes. However, the present powers it has do not seem to make it so easy or appear to prevent the ABA from arranging a similar kind of compensation deal that would allow clearance or changes to an analog technical arrangement to make room for a datacaster. I guess the fundamental issue there is that the datacaster is an unknown person. As they have not yet been successful at auction, we have no way of doing a deal with them that they would fix up all the damage and trouble and make sure that the community did not suffer at all. That is a limitation, I suppose, on how to clean up.

More generally, the term `spectrum clearance' has its origins, I think in public debate, in the Productivity Commission report. In that report the Productivity Commission is talking about a somewhat different process—a process that would facilitate the full clearance of analog services or an analog service from the spectrum so that that spectrum would become available for digital, presumably by assisting the community, the broadcasters or whoever it was who needed assistance in some way to bring an early end to the analog transmissions.

For example, there was a submission from Fairfax made to the Productivity Commission—this is an extreme example of what is meant—which said, `Surely the value of this spectrum exceeds the cost of putting a set-top box on every television set in the country so why don't we just clear analog?' The Productivity Commission took up that idea and ran with it, but in fact there is no spectrum clearing power as such for the ABA or anyone else in the legislation at present, so in that sense of spectrum clearing there is no power to the ABA. I hope that is not just drowning you in detail, but I am trying to clarify the meanings which have been given to this term `spectrum clearing'.

Prof. Flint —I was asked questions at that conference. I was speaking of it in the second meaning of spectrum clearance, that is, in relation to potential datacasting, and the discussion was about the SFNs.

Senator MARK BISHOP —I understood that. I had presumed, and I was surprised when it was raised with me, that if there is power to allocate spectrum and power to retire spectrum—and that is not in dispute— there would be power in the clean-up which is essentially a form of reallocation, and I was surprised when your remarks were passed in that context. The reason I am raising this is that the value of a datacast licence, as I understand it, lies in its national approach, that you can cover all of Australia. A critical part of the market is indeed the Sydney market, and there needs to be vacation, as I understand it, of some spectrum, particularly in the Wollongong area, if datacast licences are going to be allocated. That being the case, if you have not got the power, two issues arise for me: how have you done it in the past and how are you going to accommodate the problem in Sydney in the future?

Mr Tanner —Perhaps once again I could offer the explanation that the situation in Sydney is that the ABA has already found and planned one datacasting channel. That was done in the middle of last year. That will require no clearance.

Senator MARK BISHOP —Will that go down to Wollongong?

Mr Tanner —It has some limitations on its power to protect analog services around Sydney. I am not sure if it could reach Wollongong. It is quite a complicated question with digital, isn't it, Fred, because they can change the modulation and extend the accuracy and ability.

Mr Gengaroli —And extend the coverage effect. Yes, they could do that. I think in its present form, though, it probably would not be able to cover Wollongong, no, because of the power capping.

Mr Tanner —In the single frequency network review which the ABA is undertaking and which our director of technology published a report on a couple of months ago, he canvassed a number of options that had come out of that process that would have increased the supply of channels in Sydney. I think by increasing the use of single frequency networks the report identified that there could be a second channel made available in Sydney without any clearance. It also identified—and ntl, which has done a lot of work on this, has been quite vociferous in touting it around—that there might be another, that is, a third channel available, if a channel, channel 35, currently in use in Wollongong by the ABC, I think, were vacated. We think that is correct. Before it could be vacated there would need to be somewhere that it could be vacated to, and I understand ntl has done some work on some quite complicated shifts that could be done between other services in the area to free up channel 35 and move the analog transmission elsewhere.

To my knowledge, the engineers have not yet formed a view on how feasible that is, but the problem the ABA has, which has been quite difficult to get into the public debate with everyone running around saying, `Oh, but it's easy', is that, unlike the situation in Latrobe, the ABA, while it would have the power to order the ABC to move off channel 35, has no power to compensate the ABC and has no power to direct anyone else to compensate the ABC. If there were any downstream costs to the community, ditto with that. Now this has been a difference, if you like, between the situation as regards datacasting and as regards where we know the beneficiary. In Latrobe we know the beneficiary of clearing channel 8. The beneficiary is Channel 9. Channel 9, as I understand it, has made an extremely good offer which will ensure that there will be no disruption and no financial disadvantage to the broadcaster.

Senator MARK BISHOP —I understand that. You have power to require the ABC to vacate channel 35 there but no power to order or arrange compensation for the ABC's loss or indeed the loss suffered by the—

Mr Tanner —Community or any other broadcasters. As I understand it—and Fred would know a lot more than me on this—ntl have made a proposal that would allow clearance of different frequency but it would involve moving several broadcasters to different frequencies.

Senator MARK BISHOP —Wouldn't a simple solution be to make the cost of clearance a part of the datacasting licence that is subsequently issued? Have you given any consideration to that?

Mr Tanner —We do not believe we would have the power to attach such a condition to a transmitter licence.

Senator MARK BISHOP —Why is that?

Mr Tanner —We simply believe it would exceed our power to make those conditions.

Senator MARK BISHOP —Beyond power?

Mr Tanner —Yes. That is the advice I received informally on that question.

Senator MARK BISHOP —Thank you. I might leave it there. We are getting very technical for late at night.

Mr Gengaroli —The use of channel 35 in Sydney will require, as Mr Tanner said, a shift in translators at not only Wollongong but also Bowral, Stanwell Park and possibly Ulladulla.

Senator MARK BISHOP —How many people would be affected? Do you have any idea?

Mr Tanner —I think it is about 10,000 homes at Wollongong but I am not sure. Whether they are affected would depend on where the service moved to. It may well be moved to a place where they could receive the signal as well.

Senator MARK BISHOP —Turning to the regional equalisation plan, has the department done any estimate of the costs for all of the free-to-airs involved in the conversion to digital?

Dr Badger —Of those eligible for regional equalisation funding?

Senator MARK BISHOP —No. There are two issues there. I will come back to the regional equalisation plan. There is a cost involved for the conversion for the free-to-airs from analog to digital and spectrum has been allocated as part or whole payment. Have you done any assessment of the cost involved in the conversion by the free-to-airs?

Dr Badger —We had a consultant look at the cost of conversion for the regional broadcasters and the ABC and the SBS. We have examined arguments or submissions or costings that the metropolitan free-to-airs have published about their costs. But our major interest was the regionals and ABC and SBS as well because of the government funding of their service.

Senator MARK BISHOP —What was the cost involved in the conversion for the ABC, the SBS and the regionals? Is that private?

Ms Page —For the regionals the government announced a $260 million package over 13 years.

Senator MARK BISHOP —No, I understand the package. I am asking for the cost of the conversion.

Ms Page —They are going to receive a benefit equivalent to half their conversion costs.

Senator MARK BISHOP —And does the same apply to the ABC and the SBS?

Ms Page —The arrangements there are different. In relation to the capital for the ABC and the SBS, there is a mixture of arrangements. The ABC and the SBS have already received what is called phase 1 capital which required varying degrees of contribution by the two broadcasters. In relation to transmission and distribution, which is by far the biggest chunk, the government has advised the broadcasters that it will meet their actual costs for transmission and distribution, but both those processes are subject to competitive tendering processes at the moment. In other words, the government is underwriting those costs in full.

Senator MARK BISHOP —So the conversion for the regional free-to-airs was in the order of $520 million.

Ms Page —Double $260 million, yes.

Dr Badger —It is of that order. Obviously it is a best guess.

Senator MARK BISHOP —And you received that best guess figure from a consultant's report?

Dr Badger —There was a detailed submission put in by the broadcaster and we had two consultants look at it.

Senator MARK BISHOP —So you commissioned two consultants and they gave you reports on the cost of conversion for the regional free-to-airs. Have you let consultancies for the cost of conversion for the metropolitan free-to-airs?

Dr Badger —No.

Senator MARK BISHOP —So we do not have any independent assessment of the real cost of conversion?

Dr Badger —No, not as an aggregate.

Senator MARK BISHOP —If I said to you it was going to cost $700 million or $1.7 billion, you could say neither yea nor nay?

Dr Pelling —The Federation of Australian Commercial Television Stations, I believe, uses a figure of about $1 billion.

Dr Badger —You could do the exercise of taking the information we do have on the regionals, for example, and extrapolating.

Senator MARK BISHOP —Have you done that exercise?

Dr Badger —No.

Senator MARK BISHOP —Dr Badger, we had a discussion on what happens at the end of the moratorium period for the datacaster transmission licences. You advised us from the departmental perspective. Does your organisation have any say in that, Professor Flint?

Prof. Flint —It is a question of government policy. It was not a matter on which the ABA would have an opinion.

Senator MARK BISHOP —That is okay. I just wanted to know that. I do not have any further questions.

Senator HUTCHINS —I have had correspondence today from the New South Wales Minister for Information Technology, Mr Yeadon, who expressed some concern in relation to consultations the Commonwealth has had with state and territory governments over the ability to make use of datacasting to deliver online services to communities without costs. The concern is that there is no mention of it in this bill. Is there any reason for that, Dr Badger? As I am advised, there was a ministerial council meeting—

Dr Badger —There have certainly been discussions with the states at Online Council and we have had discussions at officials level. In terms of the arrangements for the conditions for the sale of spectrum, which is what the New South Wales minister's concerns go to, there are no relevant provisions that need to be put in this act.

Senator HUTCHINS —Why would that be? As I understand it, Professor Flint is due to make a report on this. Is that correct?

Dr Badger —The Communications Authority is preparing a report on the arrangements and conditions for the sale of spectrum.

Senator HUTCHINS —Not the ABA?

Dr Badger —The ABA is doing the spectrum planning.

Senator HUTCHINS —Where is that up to, then?

Dr Pelling —One of the reviews which was required under the digital television legislation passed in 1998 was a review into, amongst other things, the regulatory arrangements for the allocation of datacasting spectrum. As part of that, the ACA conducted an extensive consultation process with people and has provided some advice to the minister. But until the whole planning process is further progressed and we got a better idea of the total quantum of spectrum available, the government cannot really formulate a view on the regulatory arrangements which apply to the sale of that spectrum. So the minister has not completed his review on that matter yet.

Senator HUTCHINS —Which review is this, Dr Pelling?

Dr Pelling —In clause 59 of schedule 4 there is a whole series of statutory reviews, which include the ones into datacasting and high definition television and so on. One of those is a review into the regulatory arrangements that should apply to the allocation of datacasting spectrum. The work is being done on that but the minister has yet to complete it.

Senator HUTCHINS —Is this one of these reviews that is due shortly?

Dr Pelling —Yes.

Senator HUTCHINS —So it is not Professor Flint's one?

Dr Pelling —It will be looking at the regulatory arrangements applying to the sale of that spectrum. Until we have a better idea as to the amount of spectrum that is available, it is not possible to complete that and make those final decisions.

Senator HUTCHINS —Will the recommendations of that review require legislation or can that be done by regulation?

Dr Pelling —It will depend on the outcome of the review. There is a range of powers in relation to spectrum which the ACA already has under the Radiocommunications Act. A range of changes are made in schedule 2 of this bill in relation to datacasting transmitter licences, so it would really depend on the outcome of the process.

Senator HUTCHINS —Do you think that there is enough spectrum there for the outcomes that the state and territory governments are after?

Dr Badger —That is a question that is almost impossible to speculate on.

Senator HUTCHINS —Dr Pelling looked like he was about to speculate until you jumped in, Dr Badger.

Dr Badger —I doubt it.

Dr Pelling —What I was going to say was that the state governments have not really given us any clear indication of what they intend to do.

Senator MARK BISHOP —Except that they want it.

Senator HUTCHINS —They want it free of charge. I do not have any more questions, Mr Chairman.

Senator TCHEN —I want to get my mind clear about this enhancement. If Senator Bishop is hoping to see the two semifinals of the Australian Open at the same time, I think he is going to be disappointed, because semifinals are all played on centre court and they are played consecutively.

Dr Badger —That was a very important issue at one stage!

Senator TCHEN —Did you say that there were three categories of enhancement or two?

Dr Pelling —There are two categories of enhancement and a third which we call overlap multichannel, which is where programs overlap.

Senator TCHEN —I was intrigued by category A. You said that it is the broadcasting of supplementary material—for example, things on different angles, information about players and that sort of thing. Isn't that being done at the moment—the split-screen technique, the instant replay on one half of the screen with the main match continuing on the other?

Dr Pelling —I believe that the technology exists in analog for you to show, for example, picture-in-picture. You could certainly do these in the same format. But, for example, a second camera angle on a cricket game would require that you do the equivalent of changing channels, so to speak. So, in other words, I believe that the technology is available for them to show the second camera angle in a corner of the screen, if that is what they want to do, but you could also change completely from one picture to the other.

Senator TCHEN —I am pretty sure that the analog broadcast is capable of doing that now with this insert.

Dr Pelling —It is, but it is more in the form of one stream—a picture with another picture inside it—rather than two distinct streams of programs.

Senator TCHEN —So category A is actually just a continuation of existing capacity?

Dr Pelling —It allows you to go a bit further than the existing capacity permits, but some of what you could do in category A you could probably do as a picture-in-picture on an analog.

Senator TCHEN —So category A is basically supplementary information?

Dr Pelling —I will not read them out again, but it has to comply with those categories.

Senator TCHEN —And the category B ones have to comply with this at the same place at the same time?

Dr Pelling —Yes, it is a very specific category.

Senator TCHEN —I am not sure whether the ABA or the department would like to answer this question. There are a number of submissions from people, apart from the ABC, the national broadcasters and me. Other people have come here and suggested that the public broadcasters should be allowed to multichannel. What would be the pluses and minuses of such a regime—where the commercial stations are not allowed to multichannel but the national broadcasters are allowed to? What are the pluses and the minuses?

Ms Page —The various arguments for and against were set out in the various review documents that the government has tabled. There are essentially three possible approaches on open multichannelling, restricted multichannelling and no multichannelling. The review reports have indicated the stakeholder views.

Dr Pelling —You can find a lot of that information in the regulation—

Senator TCHEN —I just want to put it on record that in fact you have undertaken the research and the consultations.

Dr Pelling —Yes.

Senator TCHEN —Another proposal that has been put very strongly by a number of people to this committee is that the review of whether we should introduce HDTV should be carried out now instead of waiting four years. The argument is: why wait? Can you give us some indication of the disadvantages of carrying out a review now without this trial period?

Dr Pelling —We have just had a review of high definition TV goals formats and targets as required under the act, and this has been reported to parliament. Most of the stakeholders who have been here over the last couple of days made submissions to it.

Senator TCHEN —But we have a full panel of pay TV representatives here who are saying that we should carry out the review now.

Senator MARK BISHOP —They want the next review brought forward; they do not understand the previous decision.

Senator TCHEN —But, if such a review were carried out, it would essentially be using the same information.

Dr Pelling —You would get the range of views that you have seen here today.

Senator TCHEN —One of the major features of this bill is this approach of triplecasting during the interim period, which would basically allow people a choice during this eight years. Again, arguments have been put to us that it should be standard definition straightaway—that we should drop the high definition—in fact, in some cases there is a suggestion that we should drop the analog altogether. Under this triplecast regime will there be any community disbenefit if HDTV eventually is not taken up by the market at a rapid rate? Would there be any disbenefits if the market actually ignores HDTV?

Dr Badger —We have a system which has mandated standard definition television carriage along with high definition. By doing that we believe we have the best of both worlds: the opportunities for development of the high end-quality product but at the same time the provision of a pathway to digital television which is less expensive, which allows you access to digital services but does not require the costs of high definition.

Senator TCHEN —Say in four years time or eight years time we review it and we find that there has been negligible take-up of HDTV, would there be any community cost? Would it represent any community loss?

Dr Badger —I suppose if you said that people who had bought high end, high definition television sets, and there was no high definition television—

Senator TCHEN —No, they are still being broadcast.

Dr Badger —Still being broadcast?

Senator TCHEN —Yes.

Dr Badger —You would have the position as you have now, I suppose.

Senator TCHEN —What about the reverse situation? Say HDTV takes off much quicker than some of the evidence that we have been given says, then there would be a real community benefit coming from triplecasting.

Dr Badger —The principle still remains. Even if HD takes off very quickly, then there is still a range of people who would prefer the standard picture for economy reasons, if you like, or there are probably some types of sets, smaller sets, where the standard picture would be just as acceptable to some people, so you are going to have the same trade-offs.

Senator TCHEN —I have a final question which is on community television. As I said to the committee earlier, I have some personal interest in community television. I am not directly involved anymore; I have knowledge of it. As a number of community television witnesses have said to us, they have serious concerns about the government not appearing to have made a decision about community television—

Senator MARK BISHOP —They have made a decision.

Senator TCHEN —Or whether there is a place for community television in the future when the spectrum is divided up. Is that a problem? Does in fact the decision about community television need to be contingent on community television proving itself capable of providing a service in a financially viable way and in an organisationally viable way? Is that a problem at the moment? Is that a reason why the decision has not been made so far?

Ms Page —Again I cannot speak on the reasons for the government's policy decision.

Senator TCHEN —Let me rephrase that. I am probably still pushing you into areas asking you for comment on policies.

Senator HUTCHINS —Or speculation.

Senator TCHEN —Speculation, yes. I should not have phrased it that way. I had better leave that one alone, I think.

Senator MARK BISHOP —I have one quick question for the ABA. Professor Flint, does the ABA have an opinion on the six-megahertz channel being allocated for datacasting?

Mr Tanner —Not an official settled view as such. There were suggestions early on during the digital debate that it might be made available as a six-megahertz channel. We actually took some soundings when we were formulating the terms of the current datacasting trial about whether there will be interest in using the six-megahertz channel. There was not. There was fairly emphatic preference for seven megahertz. I guess that is explained by the information we have received to date, which I think is still current, that ordinary digital television sets and set-top boxes will not be able to tune to the six-megahertz without a special box.

Mr Gengaroli —You have to have a special set-top box just to get the information on the six-megahertz, yes.

Mr Tanner —The six-megahertz channel in question, channel 9A, could potentially be used for a range of applications with that quite major limitation on its value, or alternatively it could be the basis for a seven-megahertz channel at such time as it becomes feasible in public policy terms to retune channel 10 upwards by one megahertz. I do not think the ABA has a view on which is preferable or when. We come to those questions with an open mind.

Senator MARK BISHOP —So would you recommend dropping the six-megahertz allocation at this time?

Mr Buettel —I would like to make the point that the provision gives discretion to the ABA as to allocating six megahertz or seven megahertz. It does not actually mandate that they have to allocate it as six or seven. It just gives them the discretion.

Senator MARK BISHOP —The advice I have received is that if you allocate the six megahertz—accepting there is discretionary power—you will have to get a whole range of different equipment in from the US, and that obviously has a range of problems associated with it.

Mr Gengaroli —Furthermore, it would have to behave like a seven-megahertz channel in terms of compatability with existing television services otherwise you would have a technically incompatible system within the broadcasting services band. You would have a dual complication there, yes.

Senator MARK BISHOP —So it is a non-goer at this stage?

Mr Tanner —I do not know whether we would have a view. It is just giving us a discretion. In fact, there is a six-megahertz channel. One option for that six-megahertz channel is that it be used for some sort of six-megahertz application. The ABA does not have a view on the run on whether that is ultimately a Sydney strategy.

Dr Pelling —Senator, that was actually a very technical amendment to the bill which has caused undue alarm that it was never intended to.

Senator MARK BISHOP —I see. There have been some unintended consequences, have there?

Dr Badger —On doing something very sensible.

Senator MARK BISHOP —Yes, right. Thank you, Chair, and ladies and gentlemen.

CHAIR —Thank you, Senator Bishop. This concludes the committee's hearings into the Broadcasting Services Amendment (Digital TV and Datacasting) Bill 2000. I would like to thank the witnesses who appeared during this hearing, the committee staff, Hansard and the senators for their participation. I hereby declare these hearings closed.

Committee adjourned at 8.16 p.m.