Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Broadcasting Legislation Amendment (2021 Measures No. 1) Bill 2021

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

 

2019-2020-2021

 

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

BROADCASTING LEGISLATIon AMENDMENT (2021 MEASURES No. 1) BILL 2021

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the

Minister for Communications, Urban Infrastructure, Cities and the Arts, the Hon Paul Fletcher MP)

 

BROADCASTING LEGISLATION AMENDMENT (2021 Measures No. 1) BILL 2021

 

GENERAL OUTLINE

 

The Broadcasting Legislation Amendment (2021 Measures No. 1) Bill 2021  (the Bill) contain a package of five measures designed to improve the operation for services in the broadcasting sector and to simplify regulation by removing redundant and otherwise unnecessary provisions.

 

The proposed measures in the Bill would amend the  Broadcasting Services Act 1992  (the BSA) and the Radiocommunications Act 1992 (the RA) to:

 

a.        reduce regulatory burden on subscription television broadcasting licensees by halving the annual expenditure requirement for Australian drama programming from 10 per cent to 5 per cent and amend on an ongoing basis;

b.       move the subscription television captioning rules from the BSA into a disallowable Ministerial instrument;

c.        repeal a redundant provision from the digital radio framework in the RA to reflect that there is now only one spectrum band for digital radio;

d.       extend grandfathering arrangements for new population determinations made by the Australian Communications and Media Authority (ACMA); and

e.        extend the timeframe for ACMA to implement grants under the Regional and Small Publishers Innovation (RASPI) Fund beyond 30 June 2021.

FINANCIAL IMPACT

The measures in the Bill will not have any significant impact on Commonwealth expenditure or revenue. Any financial impacts will be met from existing appropriations. It is anticipated that there will be a net positive benefit as the amendments explicitly reduce public burden, improve and streamline regulatory regimes and remove redundant provisions.  

 

REGULATORY IMPACT

 

Regulation impact statements are provided for:

 

(1)           Screen Content Reforms (including the annual Australian drama expenditure requirement for subscription television broadcasting licensees); and

 

(2)     Australian Communications and Media Authority (ACMA) Population Determination Grandfathering Arrangements

 

The other three measures (items (b), (c) and (e) were assessed by OBPR and granted exemptions as they were deemed to have no impact or only a minor regulatory impact.

 

 

 

 

(1)                    Screen Content Reforms - Regulation Impact Statement

September 2020

1.       Context

Access to Australian content, including drama, documentary and children’s content, has been traditionally provided through a framework of regulatory intervention and funding support. This framework includes funding of the national broadcasters, broadcast quotas, expenditure obligations, direct funding and platform-specific tax rebates.

Audiences, however, are increasingly using online services, specifically streaming video services, as a primary way of accessing narrative content. Streaming services are affordable relative to subscription broadcasting, and offer consumers complete freedom to choose programs and viewing times that suit their taste and schedule. As audiences migrate to different, unregulated platforms, the impact of regulation has reduced, and the strain on the regulated domestic sector has increased.

As part of its response to the recommendations of the Australian Competition and Consumer Commission’s (ACCC) Digital Platforms Inquiry, the Government determined that there should be an immediate focus on Australian content obligations on free-to-air television broadcasters (including drama and children’s content). In April, the Government released an Options Paper prepared by the Australian Communications and Media Authority (ACMA) and Screen Australia - Supporting Australian Stories on our Screens . The Screen Options Paper considered Government intervention and support for Australian screen content and stories, particularly drama, documentary and children’s programming.

This Regulation Impact Statement examines the options for reform of the existing Australian content obligations, drawing on the views and evidence presented by interested parties through the Screen Options Paper consultation process.

2.       Why is Australian content important?

Australian screen content promotes a collective sense of identity, in turn helping to support cultural sovereignty and identity. Screen Australia’s report ‘Screen Currency: Valuing our screen industry’ notes that: [1]

Screen content regularly defines and embodies national pride, cultural identity, social cohesion and points of connection between Australian citizens, to the extent where lines from The Castle, Kath and Kim and Muriel’s Wedding have become part of our national lexicon.

Australians have strong demand for Australian content. In 2019, all of the top 100 programs on commercial television were Australian, with many of these drama and documentary programs. [2]

Australian screen content provides cultural, social and educational benefits. A qualitative study by Ipsos on Australian screen stories found that participants value Australian content, particularly Australian drama, for a number of reasons [3] :

·            The ‘teaching’ aspect of Australian screen stories are highly valued, particularly when it came to stories about Indigenous Australia. For example participants discussed how films like Rabbit Proof Fence opened their eyes to parts of Australia’s history that are not well understood. 

·            Participants enjoyed the sense of ‘home’ and familiarity they experienced when watching Australian screen stories full of characters, humour, locations and a way of life they recognised and could relate to.

·            Stories that captured the Australian way of life were discussed as being particularly easy to relate to, be they drama/comedy on commercial TV or iconic Australian films. For example one participant noted that the film The Castle was iconic and relatable.

·            Participants also felt that Australian film and television had matured and ‘come of age’. With one participant stating “It’s the stories not the actors that are important”.

In line with this, a survey commissioned by Screen Australia in 2011 suggests that Australians place high value on Australia content. Of those surveyed, 79 per cent agreed (32 per cent strongly) that Australian stories are vital for contributing to our sense of Australian national identity, while 75 per cent agreed (35 per cent strongly) that they would miss the Australian film and television industry if it ceased to exist. [4]

The Australian Children’s Television Fund emphasised the importance of Australian Children’s content in their submission to the Screen Options Paper. They argue that Australian children’s content can have a significant impact - building a sense of community and citizenship, firing imaginations, providing positive role models and shared childhood memories. [5] Vital social, cultural and educational objectives are achieved with quality locally produced children’s content.

Australian content plays a key role in educating children about where they come from. For example Little J and Big Cuz is an Australian animation for pre-schoolers that is set in the dusty outback and follows five-year old Little J and his cousin as they explore the world around them. This show has supported the transition to primary school for Indigenous children and their families and is a Logie-award winning series. [6]

Quality Australian content is just as important for older children and teens, helping them to rehearse strategies for coping with life’s challenges and disappointments. In the series Lockie Leonard , 12 year old Lockie struggles with his transition to a new town, a new school, and his mum’s hospitalisation due to depression. The series’ sensitive depiction of depression helps its tween and teen viewers to process personal experiences with mental illness, just as Paper Planes teaches them about perseverance, and Mustangs FC forefronts leadership and teamwork. These age-appropriate portrayals model social and emotional skills for children of all ages, and give parents and teachers a springboard for discussion and learning.

Australian content also has a range of economic benefits.  It is estimated that than 230,000 international tourists visit or extend their stay in Australia each year as a result of viewing Australian screen content, generating an estimated $725 million in tourism expenditure. [7] The total economic contribution of Australian screen content (under Australian creative control) is over $2.6 billion. [8] The sector as a whole directly contributes $3.3 billion annually in value-add to the economy, employing more than 25,000 people (FTE). [9]

1986 film Crocodile Dundee remains the highest film in Australian box office history when adjusted for inflation, beating high budget American films like Avatar . [10] The success of the film overseas created a boom for Australian tourism, with overseas tourist arrivals doubling from 1 million annually in 1984 to 2 million in 1989. [11] [12]

3.       What are the current regulations?

Current regulatory settings are no longer creating the conditions necessary to maximise the many cultural and economic benefits of Australian content. The settings are outdated and burdensome, and no longer result in the protection and promotion of quality Australian screen content. Current regulatory settings impose burdens that risk damaging the industry permanently, leading to a reduction in Australian content.

The Government’s policy objective of reflecting Australian perspectives and identity is identified in the Broadcasting Services Act 1992 (BSA), which includes - among a number of objects - ‘to promote the role of broadcasting services in developing and reflecting a sense of Australian identity, character and cultural diversity.’ [13] The Government also places a priority on supporting a strong and vibrant screen production sector.

In line with these objectives, the current legislative and regulatory settings require free-to-air commercial television broadcasters to transmit a set amount of Australian content (including sub quotas for drama programs and documentary programs), and require licensed subscription television broadcasters to meet minimum spend requirements for Australian drama. A summary of these requirements is provided in Table 1 .

The aim of these Australian content regulations is to guarantee that Australians have access to a variety of recognisably-Australian screen content that would not otherwise be provided by the market. The quotas acknowledge that without regulation Australian content, particularly drama, documentary and children’s content, would be under-produced as the viewing audiences and markets for Australian content are small; Australian content is expensive to produce; and broadcasters have access to cheaper international content in English. [14]

While Australian content is popular with Australians, it is commercially more risky as the production costs generally have to be recouped against a small domestic market. In contrast, popular foreign content such as syndicated programs from the US or UK, can be sold into the Australian market at a fraction of the cost of commissioning a domestic production. A 2015 report found that on average, an hour of Australian drama costs broadcasters a minimum of $450,000, while a ‘safe bet’ American program can be purchased for $200,000. [15]  

Table 1 : Minimum annual and triennial content quota requirements

Type of content

Minimum requirements

Average Annual compliance by broadcasters in 2019

Commercial television

Australian programming

55 per cent of all programming broadcast between 6am and midnight on primary channels each year.

69 to 79 per cent

 

1460 hours between 6am and midnight on multi-channels each year. (s 121G BSA)

2488 to 4927 hours

First release Australian drama

250 points each year.

860 points each set triennial period. (s 10 ACS)

270 to 332 points

 

445 hours

First release Australian C rated drama

25 hours each year.

96 hours each set triennial period. (s 12 ACS)

32 to 33 hours

 

96.3 hours (2017 triennial figure)

First release Australian documentary

20 hours each year. (s 16 ACS)

40 to 81 hours

First release Australian C rated programs

130 hours (s 14 ACS)

130 hours

All C rated programming

260 hours each year. (CTS 8)

261 to 270 hours

All P rated programming

130 hours each year. (CTS 8)

130 hours

Repeat Australian C rated drama

8 hours each year. (s 13 ACS)

34 to 106 hours

Subscription Television Licensees

Australian drama        

10 per cent of a channel provider’s total program expenditure must be on new eligible drama programming. (s 103N BSA).

$24.7 million



Note: Lines shaded in red demonstrate where broadcasters are only just meeting their obligations, indicating that regulation is a determining factor in providing the content.

Source: ACMA Comparison of Compliance Results - Metropolitan Commercial Television Networks

These content requirements are complemented by a number of other measures to support the provision of Australian content, including funding of the national broadcasters, direct funding to Screen Australia and a range of platform-specific tax rebates.

·            Tax rebates offered for Australian content (via the Producer Offset), post, digital and visual effects work (via the Post, Digital and Visual Effects (PDV) Offset), and international footloose productions shot in Australia (via the Location Offset). In 2018-19, total certified rebates were worth $383.7 million. The Government announced in 2018-19 that it would provide $140 million over four years from 2019-20 through the Location Incentive Program to attract large budget international footloose productions to Australia.

·            One-off grants to attract production into Australia. The Government provided $22 million in 2018-19 in a one-off grant to attract the production Aquaman to locate in Australia.

·            Direct funding to Screen Australia. Screen Australia received $81.8 million in 2018-19 to support quality Australian content with cultural value.

·            Funding to key institutions such as the Australian Film, Television and Radio School ($22.6 million in 2018-19), Australian Children’s Television Foundation ($2.8 million in 2018-19), Ausfilm ($1.7 million in 2018-19) which provide targeted support to the sector.

Government interventions work in tandem. Indirect funding (tax rebates) provides incentives to produce a broad range of Australian programs, direct funding (provided for specific programs) makes available additional support for drama and documentary content, and regulation (quotas) guarantees that Australian programs are broadcast on commercial television.

4.       What is the policy problem?

The effectiveness of this framework of support has been declining in recent years as audiences are shifting to watch programs on online services which have no obligation to make or source Australian content. In contrast, commercial and subscription broadcasters are facing declining audience numbers and subscribers, and have to comply with content obligations which do not apply to their online competitors.

Viewing preferences are shifting towards online services

Over the past two decades there has been a fundamental shift in the way media content is produced, distributed and consumed. A plethora of online services have entered the Australian market and take-up by Australian consumers of these services has been rapid.

In the past four years, the percentage of Australians using a subscription video on demand services has risen significantly from around 25 per cent in 2016, to nearly 70 per cent in 2020 [16] (see Figure 1 ). Streaming video services have been a highly appealing innovation, allowing consumers to choose what to watch at a time that suits them.

ACMA reported that 12.9 million Australian adults (around 65 per cent) watched professionally produced online content in 2019, compared with 9.63 million Australian adults the previous year [17] . Australian streaming video services subscriptions totalled 12.3 million at the end of June 2019, representing a 29 per cent increase from 9.5 million at June 2018. [18]

In contrast, audience numbers for free-to-air broadcasters have declined over the past decade, though still remain a significant share of the population. The percentage of Australians that viewed free-to-air television (over a seven day period) has declined from 92 per cent in 2011, to 80 per cent in 2019 ( Figure 2).  

In line with this, the audiences for the highest rating Australian television dramas on free-to-air networks have decreased dramatically over recent years. In 2016, the highest rating program had an audience of 2.92 million, whereas the top spot in 2019 had only 1.24 million viewers. [19]

 

 

Figure 1: Number of Australians aged 14+ that used a content platform over a four week period

Source: Roy Morgan Media Survey.

 

Figure 2: Number of Australians aged 14+ that viewed free-to-air television over a seven day period

Source: Roy Morgan Media Survey.

 

Subscription television broadcasters, such as Foxtel, have experienced a decrease in the number of subscribers. Meanwhile, the Australian streaming video service user base has increased rapidly, and is now three times the size of ‘traditional’ pay television ( Figure 3 ). Telsyte estimates that the total subscription broadcasting market ‘maintained just over three million subscriptions at the end of June 2019’, accounting for about a fifth of the total subscription (streaming video service and subscription broadcasting) market. [20]

 



Figure 3: Australian subscription television penetration

Source: Ampere Analysis webinar - Australia television 2.0: strategies for entertainment and sport, August 2020

 

The type of content that Australians prefer to watch via broadcast television is also changing. Time-sensitive content such as live news, sport and reality television are still popular on television and consistently rate well. [21] Audiences for drama, documentary and children’s content on commercial free-to-air television have declined significantly, though this content is still popular with many Australians. This is particularly the case for older Australians, lower income families and people in regional and remote areas.

Drama is proving to be particularly well-suited to online, on-demand consumption which facilitates the viewing of multiple episodes in succession. Although top-performing Australian dramas still attract significant audiences on free-to-air television, broadcast drama audiences overall have declined. [22] A decade ago, top Australian free-to-air dramas such as Packed to the Rafters could reasonably expect around two million viewers on terrestrial television, but now any show with more than a million viewers would be considered a hit. [23]

Documentary audiences on free-to-air television have also declined, though analysis of the top 50 documentary titles for each year suggests this decline is more gradual. Titles such as Australian Story and Back Roads often exceed one million viewers, while feature films Jimmy Barnes: Working Class Boy and Mystify enjoyed strong free-to-air audiences after grossing more than $1 million at the Australian box office. Feature film The Final Quarter averaged 700,000 viewers on Ten [24] , while series such as Australia In Colour and War on Waste have also reached wide audiences for the ABC and SBS. [25]

Children’s viewing habits and preferences have seen significant shifts in recent years, with child audiences increasingly shifting away from television to online platforms such as subscription streaming and user-generated services. [26] Children in all age groups; 0-4, 5-12 and 13-17, have reduced their average time spent viewing free-to-air television between 2013 and 2019 ( Figure 4 ).

Children’s viewing preferences on free-to-air television have also shifted towards dedicated ad-free destination services, such as those on the ABC, which attract significantly higher ratings than those on commercial television. Reflecting this, all of the top 75 Children’s programs watched by 0-14 year olds in 2019 were broadcast on ABC channels. [27]

Research undertaken by ACMA in 2017 about the viewing habits of Australian children (aged 0 to 14 years) found that in a typical week, 47 per cent of children watched free-to-air television broadcasts and the same proportion watched online subscription services; well behind on-demand internet services such as YouTube which were watched by 68 per cent of children. [28]  

Existing regulatory arrangements aim to provide access to Australian content such as children’s programming, documentary and drama, but with declining audience numbers the effectiveness of this policy measure is declining. 

Commercial free-to-air broadcasters are under pressure

Declining audiences have led to decreasing revenues for the advertising-reliant business models of the commercial free-to-air broadcasters.

·            Total television advertising revenue in the second half of 2019 (including free-to-air, subscription and broadcasting video on demand (BVOD), which includes catch-up television) totalled $1.95 billion, a decline of 5.9 per cent compared to the prior corresponding period, despite an approximate 43 per cent increase in BVOD revenue. [29]

·            Between 2014 and 2019, the broadcast revenues of the three metro commercial broadcasters decreased at an annual compound rate of 0.6 per cent (Ten), 0.7 per cent (Seven) and

2.9 per cent (Nine). [30]

 

Figure 4: Average time spent viewing free-to-air television, 2013 to 2019.

Source: OzTAM Report - Children’s Viewing

 

As the revenues of commercial free-to-air broadcasters have declined, they have still been required to meet Australian content obligations. While broadcasters are comfortably meeting the overall 55 per cent transmission quota - which requires that 55 per cent of all programming broadcast between 6am and midnight on primary channels each year to be Australian - they have argued that they are struggling to meet the sub-quota requirements for drama, documentaries and children’s content.

These sub-quota obligations are costly for broadcasters, and in some cases can be difficult to monetise. It can be significantly more profitable for broadcasters to broadcast other genres that aren’t regulated, such as light entertainment and news, as these have both lower production costs and higher audience numbers.

It is expensive to create Australian screen content. ABS data shows that drama is the most costly genre to produce, with an average cost of $645,700 per hour, with children’s drama not far behind at $476,100 per hour (see more in Table 2 ). These are significantly higher than the average costs per hour for light entertainment or news, which also typically bring in significantly more ratings and advertising revenues.

Australian content is also significantly more expensive to create when compared to the cost of importing overseas drama, documentary and children’s content which can attract similar ratings. [31] While the cost of purchasing content can vary, an Australian network can generally import a high-quality program for $100,000 to $300,000 per hour. [32] Commissioning an equivalent Australian program may cost a broadcaster anywhere from $500,000 to more than $1 million per hour. [33] Older foreign content can be imported for as little as $1,000 per hour. Australian content, therefore, can be a less attractive option for broadcasters to broadcast than foreign programming. [34]

 

Table 2 : Production costs of television programs (2015-16)

 

Commercial broadcast hours

Production costs ($m)

Average cost per hour ($’000)

Drama

497

320.8

645.7

Children's programs

 

Children's drama

120

57.2

476.1

Other children's programs

745

24.0

32.2

Total

865

81.2

93.9

Television documentaries

444

102.0

230.0

Light entertainment and variety

5,433

499.1

91.9

News and current affairs

50,160

594.4

11.9

Sport

909.9

 

Other television programs

15.5

 

Total programs

87,466

2,522.8

28.8

Source: Australian Bureau of Statistics, 8679.0 - Film, Television and Digital Games, Australia, 2015-16

 

Audience ratings drive advertising revenues for the commercial free-to-air broadcasters. OzTAM data (Table 3) shows that Australian drama and documentary were the two least common genres present in the top 1500 rated shows in 2019, with 1 per cent and 3 per cent of programs in the top 1500 respectively.  The genres with the highest maximum viewership are light entertainment and sports events, which are not required by specific genre quotas under existing regulations.

It is clear that Australian drama, documentary and children’s content are less profitable for broadcasters than other genres. A PricewaterhouseCoopers economic study estimated that if quotas were eliminated on commercial television, children’s programs would cease to be produced, drama programs would reduce by 90 per cent and documentary programs would be halved. [35]  Rather than business decisions determined by the market, quotas have become the driver for production of Australian content. 

Table 3 : Top 1500 programs 2019; genre, number of programs and viewers

 

Total number of programs in top 1500

Average Viewers

Maximum viewers

News/Current Affairs

83

440,253

993,000

Light Entertainment

104

641,077

1,734,000

Sports Event

660

423,870

2,214,000

Australian Drama

17

490,059

692,000

Foreign Drama

83

387,807

812,000

Foreign Documentary

88

293,580

703,000

Australian Documentary

52

431,885

1,112,000

Source: OzTAM data - Analysis of top 1500 television shows.

 

For children’s content, the current system of quotas is disproportionately burdensome on commercial broadcasters, requiring that they show large volumes of Children’s (C) and Preschool (P) programs that are expensive to produce, difficult to monetise due to strict advertising restrictions, and are largely not watched by child audiences when compared to G-rated programming.

·            In the 2015-2016 financial year, children’s programming cost an average of $32,000 per hour, while children’s drama cost $476,000. [36]

In contrast, children’s programs on free-to-air channels are attracting very few viewers and as a result earn very little advertising revenue, if any.

·            In February 2020, Channel Seven stated that producing 400 hours of children’s programming had cost $8 million, equivalent to $20,000 per hour, with the vast majority attracting less than 1,000 viewers. [37]

·            In 2019, the average child audience (age 0-13) on commercial free-to-air channels in metropolitan areas was 1000 for C and P qualifying programs, with many of these shows being watched by fewer than 1,000 children. [38]

Current regulatory arrangements mean that commercial broadcasters are meeting their quotas with the most cost-efficient content that the market can generate. The amount that broadcasters have spent on Australia drama, documentary and children’s content has declined significantly in the past decade, whilst spending on sports and light entertainment, news and current affairs and other have increased (Figure 5). This decrease in expenditure is despite the number of hours they have broadcast remaining broadly stable or decreasing (Figure 6).

In the first half of 2020, COVID-19 halted the production of Australian screen content making it difficult for free-to-air and subscription television broadcasters to meet Australian content obligations. As part of the Government’s immediate COVID-19 relief for Australian media, content obligations were suspended until the end of 2020. This included Australian drama, children’s and documentary quotas on free-to-air, and drama expenditure requirements on subscription television.

 

Figure 5: Expenditure by the commercial free-to-air broadcasters by genre, 2009-2019

Source: ACMA Program Expenditure data

 

5.       Why is Government action needed?

There is public value in screen content that speaks directly to Australians through its depiction of Australian themes, language and social values that can enhance understanding and experience of our national culture.

 

Figure 6: Compliance with first release Australian drama obligations

Source: ACMA summary of compliance 2010 to 2019

 

Australian content reflects who we are as a nation, to ourselves and to the world. These stories make sense of our past ( First Australians , Gallipoli , The Sapphires ), defines ourselves in the present ( The Castle , Home and Away , Mystery Road , Offspring , Bluey ) and promotes our people, our creativity and our country to the world ( Crocodile Dundee , Australia , Mad Max , Lion , Wentworth , McLeod’s Daughters , Cleverman , Miss Fisher’s Murder Mysteries ). Australian stories help define us as a nation and make us recognisable on the international stage. The cultural significance of Australian content is not easily quantifiable, but it is highly recognisable, and supported by the vast majority (76 per cent) of surveyed Australians who are in favour of government support to the sector. 3

Current regulation is aimed at guaranteeing that Australians have access to a variety of recognisably-Australian screen content that would not otherwise be provided by the market, as well as supporting a vibrant and strong production sector. This includes regulation of ‘at-risk’ Australian content, particularly drama, documentary and children’s content that in the absence of regulation would be under-produced as the audiences and markets for Australian content are small; Australian content is expensive to produce; and broadcasters have access to cheaper international content in English.

While audiences for Australian content, particularly drama, documentary and children’s content have declined on free-to-air television, there is still a significant number of Australians watching this content (around 80 per cent). Free-to-air television still remains the primary source of screen content for many Australians, particularly those who do not have access to/or cannot afford subscription video on demand services. This includes older Australians, lower income families and people in regional and remote areas.

Some form of regulation of Australian content of Australian Content on free to air television is likely to be necessary to meet public policy outcomes and public expectations. However, current regulations are no longer fit for purpose. Regulation is fit for purpose if it is appropriate, effective and efficient. [39]

The regulation faced by commercial and subscription television broadcasters can be complex, overly prescriptive and burdensome. This is jeopardising the ability of these businesses to continue to operate and produce quality Australian content.

The current regulatory environment is impacting on the long-term sustainability of Australia’s production sector as it is preventing innovative or lower cost approaches to meet the intended outcomes of the regulation. Regulation needs to create an environment that provides certainty and stability to businesses, while supporting Australian screen content. Regulation also needs to support a minimum level of Australian content on free to air television. The reform proposals canvassed in this RIS seek to address this situation and provide simpler and more effective regulation.

6.       What policy options is the Government considering?

A number of policy options have been identified to address the problem noted in Section 4. These options have been informed by the Screen Options Paper and the feedback provided by stakeholders and the public in relation to the proposals canvassed in that paper. The Options Paper canvassed the full range of possibilities from no action to full deregulation. Over 340 submissions were received and this feedback has been taken into account in developing the policy options below.

Option 1 - retain existing regulatory framework

Under this option, the existing regulatory framework would be retained in its current form, with its sole focus on traditional media platforms. Under this option, significant regulation of commercial and subscription broadcasters would remain, while streaming services would face no specific obligations. The national broadcasters would not be subject to any specific requirements to provide Australian content.

Obligations under proposed Option 1

·          Commercial free-to-air broadcasters : the transmission quotas, including sub-quotas for drama, children’s and documentary content set out in the ACS and CTS, would be retained in their current form.

·          Subscription broadcasters : the New Eligible Drama Expenditure (NEDE) scheme, which requires subscription broadcasting licensees and channel providers to spend at least 10 per cent of total program expenditure for each drama channel on new Australian drama programs, would continue to apply.

·          Streaming video services : no change to current arrangements, and no Australian content obligations would be imposed.  

Option 2 - modify and reduce existing regulation , extend regulation to streaming video services

Option 2 would provide a more flexible and balanced approach for supporting the provision of ‘at risk’ genres of Australian content. It would involve the imposition of a modified content obligation which could be met with any mix of Australian drama, children’s and documentary content. This would provide broadcasters with the flexibility to determine which content they broadcast to meet the overall quota and would replace the current sub-quotas for Australian drama, children’s and documentary content. Existing children’s (C) and preschool (P) content obligations on free-to-air commercial broadcasters would be removed as part of this option and the NEDE obligation on subscription television licensees would be lowered from 10 per cent to 5 per cent.

Obligations under proposed Option 2

·          Commercial free-to-air broadcasters : the overall 55 per cent transmission quota would remain in place, while sub-quota requirements, including the C and P classifications, would be removed. A modified points system encompassing drama, documentary and children’s content would enable broadcasters to flexibly meet a requirement for at-risk content through any combination of genres (Box 1).

·          The modified points system would:

o    Be set at a level that represents a lower regulatory burden than existing sub-quota requirements

o    Incentivise higher value drama due to its cultural value, international distribution appeal and longevity, by assigning higher points values to drama over expenditure thresholds

o    Retain the protections for children’s television content that are currently covered through the C and P classifications

 

·          Subscription broadcasters : the expenditure obligation in the NEDE scheme would be reduced from 10 per cent to five per cent.

 

Box 1: How would the modified content quota work in practice?

The modified content quota would require each broadcaster to reach 250 points of Australian genre content in a calendar year which could be met by broadcasting commissioned Australian drama and documentaries, including children’s drama and documentaries, and acquired Australian films. Each hour of content would receive different points depending on its hourly production budget.

 

This would mean that a broadcaster could meet their annual quota of 250 points with any combination of genres. However, a maximum of 50 points would be able to be acquitted on commissioned documentaries. To qualify as commissioned content, the broadcaster would need to have made a financial contribution to the production budget before the production has been completed. 

  

In-house productions would be treated equivalently to commissioned programming for the purposes of the new quota. To qualify for the new quota, Australian films would need to have been produced in the last two years and to have not been televised before in the relevant commercial television licence area.

 

Genre

Points per hour

Commissioned documentary

1

Commissioned children’s content (non-drama)

1.5

Commissioned drama (<$450,000 production budget per hour)

1.5

Commissioned drama ($450,000 - $700,000 production budget per hour)

4

Conditioned drama ($700,000 - $1 million production budget per hour)

5

Commissioned drama ($1 million to $1.4 million production budget per hour)

6

Commissioned drama (>$1.4 million production budget per hour)

7

Acquired Australian film (licence fee less than $50,000)

1

Acquired Australian film (licence fee more than $50,000)

2

 

Option 3 - remove all regulation

Option 3 would remove all content regulation, and remove or revise existing incentives to produce Australian programs. In essence, the market would determine the amount and composition of Australian content on broadcast channels and online platforms.

Obligations under proposed Option 3

·          Commercial free-to-air broadcasters : Removal of transmission quotas and sub quotas for Australian drama, children’s and documentary programming. 

·          Subscription broadcasters: Removal of NEDE Scheme.

·          Subscription streaming services : No Australian content regulation would apply (status quo).

·          National broadcasters : No Australian content regulation would apply (status quo).

7.       What is the likely net benefit of each option?

A qualitative assessment of each option has been undertaken, including the costs and benefits to particular stakeholder groups. Where available, impacts on the screen production sector and broadcasters have been quantified with data from ACMA and Screen Australia. The Options Paper consultation process has been used to support the assessment of the net benefit of each option.

Option 1 - retain existing regulatory framework

The retention of existing regulatory settings was canvassed as a proposal in the Screen Options Paper. There was little support for retaining the status quo from submitters, with most acknowledging that the current regulatory approach is no longer targeted towards the platforms which most Australians are using to access screen content.

Maintaining the status quo is likely to lead to a decline in quality Australian programming as broadcasters struggle to reach quotas, which would in turn negatively impact the local production sector.

The potential impacts of this option on stakeholders and the public are canvassed below.

Screen production sector - modest impact

Demand for content by commercial free-to-air broadcasters for existing types of sub-quota content would be expected to be maintained under this option. In 2018-19, commercial broadcasters spent $95.7 million on Australian drama, $24.8 million on Australian children’s content and $9.6 million on Australian documentary content. While the amount of expenditure by broadcasters is likely to remain static or reduce, the current content sub-quotas provide guaranteed demand for children’s, drama and documentary content. As broadcaster revenues continue to decline it is likely that the production sector will face increased pressure to find alternative or international funding to make up the shortfall in production costs or otherwise create lower quality content. This may impact on exportability of Australian content.

While providing some guarantee of annual demand, maintaining the status quo provides little incentive for innovation and longer-term growth as commercial broadcasters are constrained by obligations and unable to run their business with full flexibility.

Commercial and subscription broadcasters - high impact

The direct costs to commercial broadcasters of complying with sub-quota obligations was $130.1 million in 2018-19. Direct costs do not include the foregone profits to broadcasters from broadcasting quota content instead of non sub-quota Australian content (for example light entertainment) or international content that tends to be more profitable. The amount of foregone profits is anticipated to be significant as the cost of content subject to quotas - Australian drama, documentary and children’s content - is higher than non-quota and international content.

·            In 2015-16, the average cost of producing an hour of adult drama and children’s drama was $645,700 and $476,100 respectively, compared $11,900 for news and current affairs and $91,900 light entertainment and variety on average per hour.

·            While the cost of international content can vary, an Australian network can generally import a high-quality program for $100,000 to $300,000 per hour. Commissioning an equivalent Australian program may cost a broadcaster anywhere from $500,000 to more than $1 million per hour. Older foreign content can be imported for as little as $1,000 per hour. [40]

Revenue for commercial and subscription television broadcasters will likely continue to decline as audiences increasingly shift to unregulated online platforms. As broadcasters face rising financial pressures, their ability to invest in Australian content will lessen, with a likely impact on the quality of Australian content produced. This, in turn, may impact on ratings and advertising revenue during broadcast of sub-quota content.

Regional networks would be particularly impacted, noting that regional revenue has already significantly declined in recent years. Regional broadcasters pay up to 50 per cent of revenue to metropolitan broadcasters as a fee for content, and are losing viewers to metropolitan broadcasters’ BVOD platforms accessed through internet (e.g. 7plus, 9now and 10play).

As broadcasters struggle to meet sub-quota requirements, particularly for genres that do not attract significant audiences, non-compliance may start to occur. For example, prior to the forbearance announcement earlier in 2020, Channel 7 announced that it would no longer be able to meet C and P quota requirements. [41]

The subscription television sector spent $24.67 million on Australian drama programs in the 2018/19 financial year to comply with its obligations under the NEDE scheme. Unlike commercial broadcasters, subscription broadcasters have no obligation to broadcast Australian content, just to invest in the production of Australian drama, which makes the scheme less impactful on programming decisions of subscription broadcasters.

Like commercial broadcasters, subscription broadcasters have also been facing declines in profitability and this is likely to continue under the status quo. Direct competition from online streaming services is heavily impacting on subscription broadcasters’ ability to attract subscribers. In 2020, the Australian streaming user base is three times the size of ‘traditional’ subscription television. Meanwhile, Foxtel’s revenue decreased at an annual compound rate of 3.5 per cent over the period 2014 to 2019, [42] as declining ad revenue has exacerbated the loss of subscribers and falling revenue per subscriber.

Consumers - modest impact

For consumers, the quality of Australian content available would be expected to decline and the amount of content available to consumers may fall if broadcasts are unable to continue to meet the existing Australian content obligations. As audiences from metropolitan and larger regional areas increasingly move to online platforms to consume content, the amount of Australian content available to them may decrease.

Option 2 - simplify regulation, enhance incentives

Option 2 seeks to balance the benefits and costs of providing Australian content across all sectors, while accounting for the different business models of commercial broadcasters, subscription broadcasters and streaming services.

Screen production sector - moderate impact

This option would have a moderate impact on the production sector. The reduced and flexible sub-quota obligation may negatively impact the producers of sub-quota content that work exclusively with commercial broadcasters. Screen Producers Australia have suggested that a more simplified and reduced quota system could result in a decline in the production of Australian content and result in potential job losses. [43]

To mitigate the decrease in demand from the removal and simplification of quotas, and support the production of at-risk genres, the Government will provide a total of $53 million in additional funding to Screen Australia and the Australian Children’s Television Foundation (ACTF).

·            The ACTF will receive $10 million per annum over two years (a total of $20 million) to boost the development, production and distribution of high quality Australian children’s content.

·            Screen Australian will receive $10 million per annum over three years (total $30 million) to support the production of Australian drama, documentary and children’s screen content across film and television.

·            Screen Australia will also receive a further $1 million per annum over three years (a total of $3 million) to establish a competitive grants program to support quality Australian screenwriting and script development.

This additional funding will assist the sector to adjust and respond to the new regulations.

Commercial and subscription broadcasters - moderate impact

This option would positively affect commercial free-to-air broadcasters by reducing the current sub-quota obligations. The combined points system for at-risk genres (drama, documentary and children’s) will give broadcasters greater flexibility in how to acquit their obligations. This will allow them to focus on the genres that perform best for their audience, and better align their programming with their business model. For example, while Channel 7 has stated it is unable to continue to produce children’s content at current rates, Channel Ten recently announced plans to launch a children’s multi-channel. [44] The modified system will reduce the regulatory and associated financial burden on the commercial broadcasters, making for a more sustainable and effective arrangement.

Option 2 would also provide benefits to subscription broadcasters by halving the yearly expenditure requirement under the NEDE scheme. For 2018-19, this would have reduced the expenditure obligation by $12.3 million. As discussed above, Foxtel, like the commercial channels, is experiencing declining audiences and profits as it faces direct competition with streaming video services. Option 2 would release the regulatory burden imposed on this sector of the industry.

Consumers - moderate impact

Removing the ‘one size fits all’ approach of prescribed genres may result in higher quality Australian content being produced that is better targeted to audience demands and preferences. This is particularly relevant in the case of the removal of children and preschool quotas from the commercial channels. At present, broadcasters respond to the obligation for children’s content with primarily lower quality content, as these programs attract few viewers and consistently screen at a financial loss.

It is possible that commercial broadcasters may withdraw from the children’s content market after deregulation, and will apply that expenditure to more popular and viable content, including other at-risk Australian content covered by the modified model. Funding to the ACTF is intended to support the children’s content sector in absence of commercial broadcaster investment and help to encourage a market for children’s content. The ACTF provides services including development support, attracting finance, brokering local and international distribution deals, creation of educational materials and business and professional development opportunities. The ACTF negotiates with various distribution platforms, including streaming services, to secure broadcast for Australian children’s content.

Providing additional support to the ACTF will enable it to fill the potential gap left by the withdrawal of the commercial broadcasters and make sure that quality Australian children’s content continues to be made and is available to Australian audiences .  Similarly, funding for Screen Australia will support the production of Australian drama, documentary and children’s film and television content, including through funding to establish a competitive grants program to cultivate quality Australian screenwriting and script development .

Option 3 - remove all regulation

Under Option 3 all regulation of Australian content would be removed and market forces would determine which content is shown across the various platforms. This would provide a net benefit for broadcasters and streaming video services to the detriment of the screen production sector and consumers.

Screen production sector - high impact

During the Screen Options Paper consultation process, the production sector argued that quotas are crucial to the sustainability of the sector and that the Government’s decision to suspend the sub-quotas in 2020 as part of its response to the COVID-19 pandemic, has had significant adverse effects. Given that the cost of sourcing internationally produced content is often lower than funding domestic production, and taking into account the financial situation of commercial free-to-air broadcasters, it is likely that deregulation would lead to less Australian content being commissioned, and also to lower quality production being favoured.

While the production sector is open to modernising the quota system, there is widespread concern in the sector that removal of quotas altogether would have a significant detrimental effect on the production sector beyond that identified in relation to option 2.  It is unclear the extent to which broadcasters would continue to commission Australian content. Although it is likely that they would continue to produce profitable genres such as news, sport and light entertainment but reduce less profitable genres such as drama, children’s and documentary.

Commercial and subscription broadcasters - high impact

Removing all regulation on commercial and subscription broadcasters would benefit broadcasters by allowing them to make content decisions that maximise profits, although this would be to detriment of consumer outcomes (see below). 

Commercial broadcasters contend that the existing content sub-quotas are unsustainable due to declining audience numbers and should be removed, and would be in favour of deregulation. For example, Seven West Media argue that the existing regulatory settings focus the content production industry on servicing an inflated demand for regulated genres that do not match audience tastes for content, and do not position Australia to take advantage of the opportunities of a growing global content market. Peak body FreeTV has suggested that deregulation of sub-quota obligations, alongside strong production support and incentive based policies, would be the best way to future-proof the industry.

Subscription television broadcasters would also be in favour of deregulation. Were the 10 per cent new drama expenditure obligation removed, subscription television providers would have the option to reallocate these funds, and invest in genres other than drama.

Consumers - high impact

Under this Option, broadcasters would be likely to focus on content that offers the highest return, and genres of Australian content with low commercial value would likely cease to be produced at scale. A PricewaterhouseCoopers (PwC) economic study estimated that if quotas were eliminated on commercial television, children’s programs would cease to be produced, drama programs would reduce by 90 per cent and documentary programs would be halved. In the absence of supporting regulatory mechanisms culturally significant Australian content would struggle to make it on screen at all. [45]

As a result, Australians access to Australian access to Australian content on free-to-air television would decline and this be detrimental to Australian’s who derive benefit from this content, in terms of cultural, social and educational benefits. Around 80 per cent of Australians watch free-to-air television and many of these don’t have access to subscription video on demand services.

Deregulation would not achieve the policy objectives as set out in the BSA, particularly (1)(e) ‘to promote the role of broadcasting services in developing and reflecting a sense of Australian identity, character and cultural diversity’.

 

8.       W ho did you consult and how did you incorporate their feedback?

The Government has conducted extensive consultation on Australian content regulation over the last ten years, most recently in 2020 with the Supporting Australian stories on our Screens - Options Paper . Other notable consultations include the 2017 Australian and Children’s Screen Content Review , and the 2012 Convergence Review .

Supporting Australian Stories on our Screens - Options Paper

The Screen Options Paper was released for consultation between 15 April 2020 and 3 July 2020. As outlined earlier in this document, the paper presented a number of options for reform:

·            status quo - retain existing regulations and incentives, focussing on traditional platforms;

·            minimal change - fine-tuning and modernising existing regulatory and funding arrangements;

·            significant change - establishing platform-neutral, future facing obligations and incentives which reflect the business models; and deregulation - removing all regulation and removing or revising incentives.

The Minister for Communications, Cyber Safety and the Arts also conducted a number of roundtable discussions and meetings with a wide range of stakeholders.

The majority of submissions provided strong support for the continued production of Australian content and for Government support for the sector through incentives and offsets. The bulk of submissions also indicated support for the retention of some form of quota or investment obligation to produce Australian content, and for the extension of these demand-side obligations to streaming services.

The majority of submitters (two thirds) who commented on the options supported Option 3 - Significant change, which proposed platform-neutral, future facing obligations and incentives that take into account individual platform offerings and audience engagement.

While the production sector was broadly supportive of retaining obligations to produce Australian content (with modifications to modernise the system to implement a flexible approach suitable for different distribution services), the commercial broadcasters consider the current obligations are unsustainable and should be removed. Over half the submissions supported retaining the children’s content sub-quota in some form, and many expressed concern about calls from free-to-air commercial broadcasters for the scrapping of the current requirements.

An expenditure obligation on streaming services was supported in a large number of submissions to the Options Paper, with many stakeholders arguing that regulation should be harmonised across all platforms that provide screen content. The streaming services themselves indicated support for voluntary measures and recognition of their existing investments instead of the introduction of quotas.

Both Foxtel and the Australian Subscription Television and Radio Association (ASTRA) supported Option four (deregulation), and the removal of the NEDE scheme, on the basis that this will allow subscription television broadcasters and channel providers the opportunity to adapt and direct funding and investment based on existing environmental factors.

Other stakeholders, including the Media, Entertainment and Arts Alliance supported the retention of the NEDE Scheme. They state the requirement is already flexible in so far as Australian content drama spending is linked to overall company performance.

2017 Review of Australian and Children’s Screen Content

The 2017 Review was conducted by the Department of Communications and the Arts, ACMA and Screen Australia. The Review undertook an extensive consultation process, including the release of a consultation paper which received 70 submissions from a wide range of stakeholders, commissioning a qualitative market research report, and undertaking more than 70 face-to-face meetings and workshops with key members of the screen production industry.

The Review also took into consideration consultations that were undertaken as part of the House Standing Committee on Communications and the Arts inquiry into factors contributing to the growth and sustainability of the Australian film and television industry.  The Inquiry received over 150 submissions and undertook eight public hearings. Consultation was held with key broadcasting and screen development stakeholders, including Free TV Australia, the national broadcasters, Screen Australia, Screen Producers Australia, and the Australian Children's Television Foundation (ACTF).

 

2012 Convergence Review

The 2012 Convergence Review was conducted by the Convergence Review Committee; Mr Glen Boreham AM, Mr Malcolm Long and Ms Louise McElvogue. The review looked at the operation of media and communications regulation in Australia and assess its effectiveness. The report recommended a new principles-based policy framework that provides the media and communications sector with reduced compliance costs, increased certainty and flexibility while ensuring that services continue to meet the expectations of Australians.

This review gathered input from over 340 detailed submissions and over 28,000 comments and undertook an in-person consultation programme across Australia.

 

9.       What is the best option from those you have considered?

A summary of the impact of the three options considered is at Table 4 .

Option 2 is expected to provide the greatest net benefit as it will support the objective of providing quality Australian content, while not stifling the market. Simplifying obligations on commercial broadcasters and subscription television providers will reduce the regulatory burden on these businesses and enable them to produce higher quality consumer content.

In contrast, the current regulation of Australian content is not achieving its policy objectives and is distortionary. Maintaining the status quo (option 1) is likely to lead to a decline in quality Australian programming as broadcasters struggle to reach quotas, which would in turn negatively impact the local production sector.

Option 1 would deliver benefits to the Australian production sector, as it prioritises the production of Australian drama, children’s and documentary content, irrespective of audience appetite for that content on commercial or subscription television. However, it would negatively impact commercial and subscription broadcasters who would continue to bear the burden of producing Australian content, even where the audience for that content is insufficient to ensure that revenue outstrips the expense of acquiring or producing content.

Option 3 - deregulation - would fail to achieve the stated policy objectives as it is likely to lead to a significant decline in Australian content broadcast, including at-risk genres with negative flow on impacts for the production sector. Commercial broadcasters are likely to source international content and low-cost Australian content that is much cheaper to produce than Australian drama, documentary and children’s content. This would be detrimental to Australian’s who derive benefit from this content, in terms of cultural, social and educational benefits. Around 80 per cent of Australians watch free-to-air television and many of these don’t have access to subscription video on demand services.

Table 4: Impact Assessment Matrix

 

Option 1 (retain existing regulatory framework)

Option 2 (simplify regulation, enhance incentives)

Option 3 (deregulation)

Impact on sectors

Commercial free-to-air broadcasters

Direct cost of $130M to comply with regulations, while indirect opportunity costs worsen as broadcasters follow projected -3 per cent revenue annually

Positive impact with the removal of children’s quotas and a modified quota system that is more flexible. A more ‘level’ playing field with online streaming services.

Strong positive impact for broadcasters who would maximise return by maximising lower cost programs.

Subscription broadcasters

Direct cost of around $25 million to comply with the 10 % NEDE requirement, impacting their ability to compete with streaming platforms.

Modest positive impact from a reduction in the NEDE scheme to 5%.

A more ‘level’ playing field with online streaming services.

Strong positive impact of maximising return through offering lower cost programs.

Production sector

Minimal impact with status quo maintained. Little incentive for innovation in the sector.

Moderate negative impact on the production sector. The reduced and flexible sub-quota obligation will impact producers that work exclusively with commercial broadcasters producing sub-quota content.

Significant negative impact, it is likely commercial free-to-air broadcasters will source internationally produced content as it is often cheaper than funding domestic production.

Assessment against policy outcomes

Hours of Australian content produced

While broadcasters are currently meeting content minimum content obligations, there is a risk that they would fail to comply in the medium-term as their business models continue to come under pressure.

The decrease in demand from the removal and simplification of quotas would, in part, be offset by funding to the Australian Television Children’s Foundation and Screen Australia for the production of Australian content.

Children’s programs may cease to be produced, drama programs would reduce by 90 per cent and documentary programs would be halved (PwC report)

Quality of Australian content produced

Quality of content would decline due to financial difficulties of commercial broadcasters. For subscription broadcasters, expenditure on drama would reduce in line with reduced revenue, leading to lower quality drama content.

Higher quality content is encouraged under the modified points system which stipulates points by expenditure level.

Removal of incentive to produce low quality content to meet quotas, without an incentive to produce high quality content at scale. Likely a very small amount of high quality content annually.

 

10.   How will you implement and evaluate your chosen option?

Implementation

Implementing the modified content quota would be implemented by a Ministerial direction to ACMA to revoke and remake the Broadcasting Services (Australian Content) Standard 2016 (ACS) and the Children’s Television Standards 2009 (CTS). ACMA would be directed to maintain appropriate safeguards for child audiences on commercial free-to-air television, which exist in the CTS alongside C and P quotas. Reducing the expenditure obligation on subscription television licensees will be achieved through amendment to the BSA.

Evaluation

It is be important for each of the measures to be carefully evaluated. It is proposed that the measures are subject to review after two years, in 2022.

 

(2)      Australian Communications and Media Authority (ACMA)

Population Determination Grandfathering Arrangements -

Regulation Impact Statement

 

What are the current regulations?

The Broadcasting Services Act 1992 (BSA) is the primary legislation that sets the rules and regulations for the media industry in Australia. Part 2 of the BSA sets out the categories of broadcasting services to which the BSA relates, including national broadcasting services; commercial broadcasting services, including television and radio; community broadcasting services, including television and radio; and subscription television services. [46]

This Regulation Impact Statement (RIS) assesses the regulatory impact on commercial radio licence holders (licensees) with respect to the making of population determinations by the Australian Communications and Media Authority (the ACMA) under section 30 of the BSA, which give effect to population licence areas.

Part 3, Section 30 - Population Determinations

Under section 30 of the BSA, ACMA may, by notice in writing, determine the licence area population of a licence area, [47] including the populations of areas where licence areas overlap, and the total population of Australia for the purposes of the BSA. In making such a determination, ACMA is to have regard to the most recently published census count prepared by the Australian Statistician. A determination under section 30 of the BSA is not a legislative instrument.

Once made, a section 30 determination is used by ACMA for the exercise of any of its functions under the BSA that refer to licence area populations or the population of Australia. For example, a determination of the population figures for a licence area affects the application of the media control and diversity rules in the BSA.

The BSA currently contains a number of rules regarding the control and diversity of media ownership in Australia. These rules support the objects of the BSA to promote a diverse media sector by limiting the number of media operations that can be controlled by a person or organisation in any single licence area.

A ‘media operation’ is defined in the BSA as a commercial television broadcasting licence, a commercial radio broadcasting licence, or an associated newspaper. [48] The three main rules that apply to commercial radio are:

·          Section 43C - local content obligations for regional commercial radio broadcasting licenses;

·          Section 54 - the two-to-a-market rule for commercial broadcasting radio licences;

·          Section 61AB - the minimum voices (5/4) rule.

The BSA also places limitations on the number of directorships that a person can hold for commercial radio under section 56. Where a licensee has been affected by a change in control, including as a result of a section 30 population determination, it is referred to as a ‘trigger event’.

A trigger event occurs under subsection 61CB(1) of the BSA when there is a transfer of a regional commercial radio licence. ACMA has authority to investigate a trigger event and advise compliance action, as prescribed in the BSA and the Australian Communications and Media Authority Act 2005 .

 

Part 3, Section 3 - Objects of the Act

By underpinning the media control and diversity rules in the BSA, section 30 determination supports the objects of the BSA in section 3 of the BSA, especially objects 3(1)(a), 3(1)(b), 3(1)(c), 3(1)(e),  3(1)(ea) and (g):

·          (a)  to promote the availability to audiences throughout Australia of a diverse range of radio and television services offering entertainment, education and information; and

·          (b)  to provide a regulatory environment that will facilitate the development of a broadcasting industry in Australia that is efficient, competitive and responsive to audience needs; and

·          (c)  to encourage diversity in control of the more influential broadcasting services; and

·          (e)  to promote the role of broadcasting services in developing and reflecting a sense of Australian identity, character and cultural diversity;

·          (ea)  to promote the availability to audiences throughout Australia of television and radio programs about matters of local significance; and

·          (g) to encourage providers of commercial and community broadcasting services to be responsive to the need for a fair and accurate coverage of matters of public interest and for an appropriate coverage of matters of local significance.

 

1. What is the policy problem?

There are two grandfathering provisions in the BSA - subsection 43C(4) and section 52 - that provide protection to a broadcaster when a new population determination is made under section 30 of the BSA, by ACMA. In making such a determination, ACMA is required to have regard to the most recently published Census count from the Australian Bureau of Statistics. Population determinations inform a range of provisions in the BSA, including media ownership and control limits and local content obligations for regional commercial radio.

As drafted, these provisions only afford protection in relation to a previous population determination. If a broadcaster (i.e. a commercial broadcasting licensee) were to continue maintaining existing operations, when a new population determination takes effect, it could inadvertently breach the relevant statutory control and local content obligations, as determined by the BSA.

ACMA is due to update the existing population determination, under section 30 of the BSA, to have regard to the 2016 Census results. The existing population determination was made in April 2016 and is based on the 2011 Census figures. ACMA has delayed the making of a new determination following the 2016 Census, pending the resolution of the media control and local content obligations matters outlined below.  As the 2021 Census approaches, the urgency for the ACMA to make a new section 30 Determination increases. ACMA has advised that the next section 30 determination based on the 2016 Census figures, as it will: 

(1)      Change the overlaps in two regional commercial radio licences to more than 30 per cent, meaning the two licence areas will be treated as one licence area (section 51 of the BSA refers).  The current population for these two regional license areas are 69,899 and 60,088 respectively. The overlap of these two population areas is 18,311. This will put a commercial radio broadcaster in breach of the two-to-a-market radio rule, unless it surrenders two of its licences.

 

·            The two-to-a-market rule of section 54 of the BSA stipulates that no person can be in a position to exercise control of more than one commercial radio broadcasting licence in the same licence area.

·            A breach to this rule will require the licensee to divest its assets (two radio businesses) in order to revoke two licenses and avoid a penalty of 2000 penalty units costing $444,000. Further information on the costs is provided at Question 4.

 

(2)      Increase local content obligations for regional commercial radio licence holders from

30 minutes to 3 hours per business day (section 43C of the BSA refers). This will put a commercial television broadcaster in breach of its local content obligations in this licence area, unless it increases its broadcast of eligible local content to meet the new obligation.

 

·            ACMA understands that the licensee for both regional licences in this scenario provides close to the minimum level of local content (30 minutes per business day), and would be required to meet the costs of increasing this six-fold to meet the new requirement of 3 hours of local content each business day. The cost of this requirement is discussed at Question 4.

·            The current population for this regional licence area is 33,262.

 

2. Why is Government action needed?

The reported changes to existing statutory control and local content rules, resulting from a new population determination, cannot be anticipated by broadcasters. Consequently, broadcasters cannot plan for this risk event nor be expected to immediately comply with new requirements, without ACMA applying a level of regulatory forbearance. While regulatory forbearance is an option for ACMA, it is not a long-term or permanent measure, and would not provide sufficient regulatory certainty to stakeholders, including the affected licensees. ACMA could exercise regulatory forbearance on a temporary basis, and offer provisional guidance and assistance to the sector to meet their obligations, while a more robust approach to support industry compliance is developed. In addition, the cost of compliance for broadcasters may be disproportionately high, depending on the type and level of a breach. Further detail on the implications of ACMA’s regulatory actions, and the cost of compliance is provided at Question 4 .

The Government is able to minimise the regulatory risk to businesses, through a variation to the BSA that enables a retrospective application of grandfathering powers to protect broadcasters - that is with regard to the ‘most recent determination for which a licensee was not in breach of the condition’, upon the making of population determinations under section 30 of the BSA. Further, a time-limited application of the amended grandfathering powers (i.e. through a sunsetting provision of 5 years, commencing in 2021), would clearly signal to licensees the Government’s commitment to review the state of the market and their provision of services in relation to these provisions. While it is important to support broadcasters meet their requirements through the proposed deregulatory measures, it must be balanced with respect to net population movements that affect licence population areas (as per section 30 determinations); and have regard to market conditions that support competition and low barriers for new licensees.

 

3. What policy options are you considering?

Option 1: Status quo - retain existing regulation

Make no changes to subsection 43C(4) and section 52 of the BSA. This option would require ACMA to exercise regulatory forbearance for affected licensees in the short-term, if licensees were assessed to be in breach of media ownership and control limits and local content obligations under the BSA, (as the protection would no longer be operational). However, noting the significant cost to industry to meet compliance requirements (see Question 4), there is likely to be significant resistance from the sector and the potential for reputational risk to the Government, if more flexible options, including new legislative arrangements were not considered.

 

Option 2: Modify existing regulation and reduce regulatory burden to licensees over a five-year period

Amend subsection 43C(4) and section 52 of the BSA in order to reinstate grandfathering powers with respect to the making of future population determinations (under section 30). These amendments would provide protection to impacted licensees on a time-limited and retrospective basis , where there have been no changes other than to the determination of new population figures. This option would provide sufficient regulatory certainty to stakeholders, including licensees, within a five year period (from the passage of the new legislation), as well as an opportunity for legislative review, triggered by proposed sunsetting of the legislation.

 

Option 3 :   Modify existing regulation and reduce regulatory burden to licensees indefinitely

Amend subsection 43C(4) and section 52 of the BSA in order to reinstate grandfathering powers of a permanent and ongoing nature , with respect to the making of future population determinations (under section 30). These amendments would provide protection to impacted licensees on an indefinite and retrospective basis , where there have been no changes other than to the determination of new population figures. This option would provide absolute regulatory certainty to stakeholders, including licensees, with respect to long-term changes in population figures and would ensure these protections remain operational for an indefinite period.

 

4. What is the likely net benefit of each option?

Option 1: Status quo - retain existing regulation - more than minor regulatory impact

The Media Control Radio Licence Scenario

If this option were chosen, it would result in a breach. A broadcaster in a regional licence area would be in breach of the two-to-a-market rule (section 54) and another broadcaster in a regional licence area would be in breach of its local content obligations (section 43C). The net costs and benefits pertaining to these breaches are discussed below.

 

Regulatory action by ACMA

In respect of the overlaps of two commercial radio licences , ACMA may give notice under section 70 of the BSA to the licensee and to the relevant directors to take action so that they are no longer in breach. This may require the licensee to divest itself of 2 radio licences in the regional licence area. 

 

Net cost of breach for the licensee: 

If the regional licensee does not divest, as an action required to address this breach, they would be guilty of an offence under section 72 (failure to comply with a notice) which carries a penalty of 2,000 penalty units with an estimated cost of $444,000 . This compliance burden could possibly be delayed by a period of regulatory forbearance to allow the licensees reasonable time to make the necessary changes to their operations before subjecting them to the appropriate compliance action.

 

Net costs to the licensee, consisting of the loss of future revenue:

The net costs to the licensee, with respect to divesting the asset, would be partly be offset by the price received for the radio licence as an asset. Although any sale prompted by the threat of regulatory compliance action would place a downward pressure on price, as would a sale in the current post-COVID-19 market.

 

Other costs include, the cost of disentangling two radio businesses from the greater business and preparing them to be viable, standalone businesses (e.g. disentangling costs of common contracts, employment, shared assets etc.), as well as the costs of a change to the existing business strategy and business model to the business owner.

 

Neutral cost/benefit to the community:

Community costs are difficult to quantify because, assuming that the existing licensee would take the highest value option of selling two licences in one licence area, rather than one licence in each licence area, the potential benefit of diversity in ownership caused by a new owner would only apply to the population in the overlap area of the two regional licences (which would receive programming from all four services).

 

In the licence area where the businesses are sold, outside the overlap, one licensee would be replaced with another. Additionally, even assuming that the licences were purchased by an experienced broadcaster (i.e. an existing network) it is not certain that the quality of service would be improved, as two networked services would be likely to be replaced with another. On this basis, the benefits and costs to the community are likely to cancel out.

 

Regional Radio Local Content Scenario

Regulatory action by ACMA

ACMA understands (but cannot confirm) that the licensee for both regional licences in this scenario provide close to the minimum level of local content (30 minutes per business day). Under this option, the licensee would be required to broadcast 3 hours of local content - six times the current requirement.

With respect to compliance with local content rules for this scenario, ACMA may take compliance action if it were made aware of non-compliance by the licensee with respect to the licences in that area (for example, from a listener complaint). Failure to broadcast the applicable number of hours of material of local significance, as required by section 8 of the Broadcasting Services (Regional Commercial Radio — Material of Local Significance) Licence Condition 2014 (the local content licence condition) is a breach of a licence condition.

 

Where it is satisfied that a licence has breached or is breaching a licence condition, ACMA may issue a remedial direction to the licensee in accordance with subsection 141(1) of the BSA to require it to take specified action within a prescribed time so that the person/licensee does not breach, or is unlikely to breach the relevant provision in the future. If ACMA issued a remedial direction to the licensee for breaching the local content licence condition and the licensee breached the direction - it would be guilty of an offence under subsection 142(3) of the BSA (breaches of a remedial direction). This carries a penalty of 500 penalty units with an estimated cost of up to $111,000. A contravention of this kind is a separate offence in respect of each day during which the contravention continues.

 

·            A breach of a remedial direction is alternatively subject to civil penalties ordered by the Federal Court in respect of each day during which the contravention continues.

 

·            As part of ACMA’s graduated and strategic risk-based approach to compliance and enforcement, continued breaches of the licence condition could eventually be enforced with the suspension of or cancellation of the broadcasting services licence (section 143 of the BSA). However, this would be a response of last resort and the risk of this occurring is considered very low.

 

Net costs to the licensee, consisting of the loss of future revenue:

The Government is aware that the commercial radio broadcasting sector has previously noted the difficulty to meet local content obligations in 52 weeks of the year in its advice to the ACMA, as well as its formal submission to the Productivity Commission, in its Annual Review on the Regulatory Burdens on Business released in September 2009. The Productivity Commission report noted that the objective of the regulatory provisions was to ensure a minimum amount of material of local significance is broadcast on regional commercial radio. However, it found that the obligations to meet the required level of local content are rigid and do not allow radio stations to tailor their local content to meet listener expectations. The Productivity Commission’s report also noted that the reporting framework for regional commercial radio broadcasters was onerous.

 

In its submission to the Productivity Commission, Commercial Radio Australia, the national peak organisation representing radio broadcasters, noted that the estimated annual legal costs of complying with the local content requirements was $25,000 per regional radio station, and $50,000 for radio stations required to comply with the trigger event related reporting requirements . ACMA reported in its Local Content Levels Investigation Report of 2007 (page 4 of the report) that “the cost of complying with a requirement to broadcast 12.5 minutes of local news each business day is estimated at $12,000 - $60,000 per annum, representing as much as 15-26 per cent of the profit of some licences ”.  The Department considers that the requirement for a six-fold increase to meet local content requirements in this scenario, which is compounded by the economic downturn and loss of advertising revenue to the sector during the COVID-19 pandemic, could be untenable and undermine the viability of the regional licensee in question, under the current economic conditions.

 

While ACMA cannot uncover the actual net cost to the licensee in this scenario at present, in 2014, it estimated that the burden of regulation associated with obligations relating to material of local significance were estimated at $10.9 million for the industry at large, inclusive of 210 regional radio licences.

A net benefit to the community

The six-fold increase in local Australian content that is available to consumers under this option has the potential to improve the state of media diversity in this regional license area. Given the known challenges to retaining traditional local media sources and local content production/distribution in the move towards digital platforms, particular types of local content could deliver greater socio-economic benefits to consumers and communities. Benefits to be realised may include greater civic participation and an increase in production of public interest journalism - both of which are integral to a healthy functioning democracy. It could also provide for more tangible benefits from increased business activity, including new employment and greater supply chain opportunities for local/regional businesses. While there are expected benefits in this scenario, it would arguably offset a minor portion of the costs required by the regional licensee to meet their local content obligations.

The administrative cost to the ACMA for the application of regulatory forbearance (to minimise cost to licensees)

 

In addition, there are two alternative options ACMA could take with respect to section 30 population determinations. ACMA have provided advice on the associated costs and benefits of implementing these options below:

 

1.    Exercise indefinite regulatory forbearance for the affected commercial radio licensees, by making the section 30 determination and allowing affected licensees to operate in a business-as-usual fashion, without taking any action against them, despite being in breach of the statutory control rules and local content rules for commercial radio , ACMA arguably has a discretion not to give a notice under section 70.

 

This is not an option that ACMA would be likely to agree to. While regulatory forbearance is an option for ACMA in certain circumstances, it is usually limited in time and generally not considered appropriate to be used as a long-term or permanent measure. It would not provide any regulatory certainty or stability to stakeholders (including the affected licensees). ACMA would generally exercise regulatory forbearance on a temporary basis while in the process of implementing a more permanent solution is pursued - for example, legislative change. If long-term or indefinite forbearance was adopted, ACMA would be regarded as sanctioning the ongoing breaches.

 

2.    Withhold section 30 determinations to prevent the cost to commercial broadcasting licensees that, through no action on their part, would otherwise be placed in breach of the statutory control rules and local content rules for commercial radio if they maintained their existing operations .

 

ACMA does not recommend withholding the making of the section 30 determination for the foreseeable future. Although section 30 is worded in discretionary terms (i.e. ACMA ‘may’ make the determination), in practice ACMA makes section 30 determinations based on each Census in order to promote the objects of the BSA (including the planning functions set out in Part 3) and to facilitate the operation of other provisions in the BSA. In addition, it is the expectation of industry stakeholders that ACMA updates the determination after every Census. ACMA has already delayed the making of a new determination following the 2016 Census, pending the resolution of this matter, but does not consider an indefinite delay to be a solution to this issue due to the flow-on impacts of other areas of the BSA (e.g. to planning powers in Part 3 of the BSA etc.), and would only consider a further delay for the time necessary to resolve the current issue via another means (e.g. legislative amendment). Note that as the 2021 Census approaches, the urgency for ACMA to make a section 30 Determination increases.

 

Current operation of grandfathering provisions to protect commercial radio licenses

 

With respect to section 52 of the BSA,  ACMA understands that when this section was originally enacted in 1992, it was intended to be ongoing. The explanatory memorandum to the original Bill sets out that, as a grandfathering provision, it was intended that licensees were not to be put in breach of audience reach limits in the (now repealed) sections 53(1), 55(1) and 55(2) by reason of a new section 30 determination. Further, the explanatory memorandum sets out the specific circumstances when this grandfathering rule was to no longer apply, which did not include reference to a sunsetting intention:

 

It should be noted that the protection afforded by this grandfathering does not extend to any transactions made by the licensee after such a [section 30] determination, whereby the licensee would be put in breach of [the reach rule]. The grandfathering also does not apply to any person who may subsequently acquire the licence.

 

When this provision was amended in 2015, ACMA’s understanding was that the amendments simply extended the operation of the original provision to cover the application of section 30 determinations the ‘one-to-a-market’ television rule and the ‘two-to-a-market’ radio rule, as per the explanatory memorandum to the Broadcasting and Other Legislation Amendment (Deregulation) Bill 2014 :

 

Item 2 extends existing grandfathering arrangements to prevent commercial radio or television broadcasting licensees from being adversely affected in relation to the statutory control rules as a result of the making population determinations by ACMA.

 

Although the grandfathering arrangements introduced by subsection 43C(4) was a new provision, ACMA understood that the same reasoning applied as for the section 52 amendments. The explanatory memorandum the Broadcasting and Other Legislation Amendment (Deregulation) Bill 2014 suggests that the arrangements are intended to be ongoing, noting that:

 

The effect of this amendment is to prevent regional commercial radio broadcasting licensees from having to meet a higher regulatory burden arising from factors beyond their control (changes in the population of licence areas).

 

There is no indication of any expectation that population changes would ever be in the control of a licensee warranting the non-application of the grandfathering arrangements over time.

 

Overall, to prevent the cost to the affected commercial licensees, ACMA could make licence area variations to change the borders of the affected licence areas, so that the licensees in question would not be in breach (in accordance with subsection 30(4), this would then require a new determination to be made for those licence areas). This is also not a preferred course of action by ACMA, as it is unlikely to be a reasonable exercise of ACMA’s power; may be contrary to the objects of the BSA; and would be a time-consuming process with resourcing implications for ACMA.

 

Assessment: an overall net cost to industry (more than minor regulatory impact)

 

Overall, Option 1 consists of the highest net cost to industry and the lowest benefit with regard to both commercial licensees’ scenarios (i.e. media control and regional local content scenarios).

In the first scenario, there is a significant net cost to the licensee to comply with the two-to-a-market rule (s54 of the BSA), which would involve divestment of two radio businesses, including administrative costs of settling the assets, a potential restructure to the company’s business and operating model, and the cost of common contracts for shared assets and employment. If the divestment of the licences secures the transfer of the business to a new licence holder, there is still no guarantee of a tenable media diversity situation or net benefit to the community, particularly if the buyer is part of the existing network.

With respect to the second scenario, the licensee would also incur a significant cost to broadcast local content at six times the current level in order to comply with local content obligations (section 43C of the BSA). A portion of this cost could be offset by the qualitative benefits to the community, including increased access to local content and other positive externalities, given local news and content is inherently a public good. However, overall the intangible benefits resulting from an increase in access to local content in the second scenario, does not offset the significant costs to revoking two licences associated with the first scenario.

This option will therefore have more than a minor regulatory impact and will not deliver a net benefit to the industry or the community.

Option 2: Modify existing regulation and reduce regulatory burden to licensees over a five-year period - minor regulatory impact

If this option is chosen, the licensees would not be found to be in breach of the statutory control and local content rules of the BSA.  

 

A net positive benefit to the industry and the Australian community:

This option will not impose any additional regulatory burden on licensees beyond what is already required until the sunsetting of the proposed grandfathering amendments (i.e. in mid to late 2026). The sunsetting of the grandfathering provisions (subsection 43C(4) and section 52 of the BSA) would commit the Government to a review of the legislation commencing from five years at the time of passage for this amendment bill. The review presents the Department and the Government with an opportunity to assess the impact of future changes to population licence areas on industry, consumers and the broader community. The Government’s assessment of the impact could lead to further legislative changes, if required, in order to uphold the objects of the BSA that underpin section 30 determinations. This means that the Government can account for the conditions that enable the news and media market to remain accessible and competitive with low barriers to entry in the long-term, while providing consumers with access to diverse and good quality news and media content, as required within the relevant statutory media control and local content rules. This opportunity presented through the legislative review mechanism may represent a high net benefit to the Australian community and the industry, with respect to supporting a robust and sustainable news and media market.

Zero net cost to the industry over the next 5 years

Although this option would not impose any additional costs to licensees over the next five years, the opportunity costs associated with the qualitative benefits to the community in the regional local content scenario outlined in Option 1, wherein the licensee would be required to deliver a six-fold increase in local content distribution, would not be fully realised under this option. This opportunity cost has not been quantified in the context of this RIS, but given the scope for a legislative and policy review in 2026, any losses incurred would be minimised or offset in the long-term. This is because a future review would ensure support for the long-term sustainability and diversity the news and media market with respect to future changes to population figures.

Assessment: an overall net benefit to industry

Overall this option presents the highest benefit to the industry in the prescribed period (five years from the passage of the legislation) with no additional compliance cost; and the greatest long-term benefits to both the industry and the Australian community based on the policy intent underpinning the proposed legislative review (triggered by the sunsetting provisions).

Any further compliance risks and costs to the industry can be captured in the review period and appropriately accounted for with respect to changing population figures (i.e. from 2026 onwards).

Option 3 :   Modify existing regulation and reduce regulatory burden to licensees indefinitely - more than a minor regulatory impact

This option is determined to have more than minor regulatory impact due to the permanent and ongoing nature of the protections afforded to the licensees. The application of grandfathering arrangements on an ‘indefinite’ basis, means that there would not be no additional compliance costs to the industry to what is required at present (as the licensees would be afforded permanent protection, inclusive of the most recent population determination broadcasters have complied with). However, there would be greater opportunity costs to the market and the Australian community overall (listed below). This elevates the regulatory risk to ‘ more than a minor regulatory impact’ .

 

Opportunity costs:

If grandfathering arrangements were to apply indefinitely, there would be a clear risk to the media diversity situation for radio media and less local content being produce over time. It would also raise barriers for new market entrants, as they would be required to service different and potentially larger populations in both metropolitan and regional licence areas, with respect to their statutory obligations, and accrue greater regulatory burden from existing licensees. This would generate unfair market conditions, decrease competition and would also impose challenges to existing broadcasters from adequately servicing future media markets. Ultimately, this option puts into question the relevancy and integrity of section 30 determinations with respect to changes in population figures and population licence area populations, and how they interact with the objects of the BSA (page 4 of the RIS refers). Further detail on opportunity costs relating to this regional licence area can also be found under Option 1 - status quo. 

 

Zero net benefit - media diversity

With respect to the divestment of two licenses in the regional population licence area (i.e. the media control scenario), ACMA does not have confidence in any direct improvement of the media diversity situation resulting from a section 30 determination, if it were to result in a change to the ownership of the licences. The replacement from one licence holder to another within one licence population area does not guarantee improvements to the quality of the service and content, particularly if it is an existing broadcasting network. The ACMA is not aware of any expectation from these communities that a section 30 determination should cause either the uncertain benefits of changes of ownership (i.e. media control scenario) or the benefits of increase local content (regional local content scenario).

Assessment: a net cost to industry

Overall, this option has a more than minor regulatory impact on industry, with high costs and limited benefit to the industry or the Australian community in the long-term. For this reason, Option 2 is preferred, whereby a legislative review of grandfathering rights to licensees would provide for long-term benefits, with suitable deregulatory measures that can be aligned with future population figures. 

 

5. Who did you consult and how did you incorporate their feedback?

In early 2020, the Department and ACMA agreed to amend the grandfathering arrangements for subsections 34C(4) and section 52 of the BSA, noting that the current version of the provisions, as per the 2015 amendment to the BSA, will not continue beyond the making of the next section 30 Determination by ACMA. Both agencies agreed that in order for the provisions to remain operative and to reinstate grandfathering rights under section 52, which was rendered in-operative due to a drafting error in the 2015 amendments, protections would need to be afforded, on an ongoing basis, where there have been no changes, other than to the determination of new population figures. The explanatory memorandum to the 2015 amendments states that:  ‘[The amended provision] will prevent broadcasting licensees being adversely affected as a result of factors that are entirely beyond their control (i.e. changes in the population of licence areas).

The respective agencies agreed that the legislation, as drafted, solely applies with respect to previous determinations , presenting significant compliance risks to licensees. An amendment to this legislation would ensure the existing provisions are consistent with the policy intention. In addition, there are no immediate costs to industry to reinstate grandfathering rights to licensees in the short- term. If there is potential for only minor costs in the longer-term, the Department expects broad support from industry on this proposal.

ACMA has advised there has been no formal consultation for the present proposal (inclusive of all options). ACMA considers that the proposed grandfathering amendments will support the objects of the BSA and is consistent with the policy decision dating from 2015 when the provisions were last amended. In the case of section 52, it was understood that the existing grandfathering arrangements for the 75% ‘reach’ rule were ongoing, and that these would be extended to cover the television and radio control rules. When the policy was implemented in 2015, ACMA’s understanding was that without ongoing grandfathering arrangements, these issues would re-occur at every new section 30 determination, which was seen as a problem to be avoided. At the time when the amendments to section 43C and 52 were proposed, these measures were included as part of the general industry consultation about potential ‘Spring 2014 repeal day’ measures undertaken by the Department. As part of the Broadcasting and Other Legislation Amendment (Deregulation) Bill 2014 the amendments were scrutinised by the Environment and Communications Legislation Committee. It is understood that no objections from the broadcasting sector were raised with the amendments as this was a proposal to avoid a regulatory impost.

ACMA notes that no RIS was conducted at that time and costings do not appear to have been undertaken. Consequently, it suggests that, as this is settled policy, a different approach is not warranted on this occasion.

Industry concerns:

Licensees concerns about the operation of the provisions relating to local content obligations (section 43C) were considered as part of ACMA’s Local Content Levels Investigation Report (2007). In submissions to the review, a number of regional broadcasters commented that the compliance burden for the local content and local presence provisions was considerable and affected the ability of operators to do core functions such as programming, engineering, sales and administration. Many of the submissions called for greater flexibility in meeting the requirements for ‘material of local significance’ and argued that the requirement to broadcast local content for all 52 weeks of the year did not take into account factors such as annual leave for staff. A number of submissions called for local content broadcast on weekends to contribute to their minimum requirement. However, this has the potential to reduce local content levels on weekdays. The current provisions do not prevent broadcasters from providing local content on weekends.

 

6. What is the best option from those you have considered?

Option 2 is the preferred option.

The reinstatement of grandfathering rights to licensees on a time-limited and retrospective basis, through a legislative amendment to subsection 43C(4) and section 52, would provide a legally effective approach to implementing the policy objective for these measures - that is to afford ongoing protection to licensees with respect to the most recent determination they were compliant with, when a new population determination is made over a period of five years. This addresses the lack of certainty of protections under current arrangements, which has regard to ‘previous determinations’.

This option would enable ACMA to make a new population determination before the proposed amendments come into effect (i.e. with respect to the 2016 Census population figure), as the grandfathering rights would be restored to protect licensees in relation to ‘the most current determination’ (i.e. 2011 Census population figure). Overall, there are no identified risks to the ACMA’s implementation of section 30 determinations, as a result of these amendments.

The Department considers this option to have a net benefit to the Australian community and with a minor regulatory impact to industry, given it is deregulatory in nature, and minimises compliance requirements for licensees over the defined five-year period, where there have been no changes other than to the determination of new population figures.

 

7. How will you implement and evaluate your chosen option?

The passage of the Broadcasting Legislation Amendment (2021 Measures No. 1) Bill 2021, including Option 2, is expected by mid to late 2021. The operative measures, (proposed for subsection 43C(4) and section 52) would sunset after five years of enactment (approx. until mid-late 2026). At this point, the legislation would trigger a review, in which case subsection 43C(4) and section 52 would be examined by the Department for relevancy, effectiveness and continuity with respect to future population figures and their impact on population licence areas - and with a view to support a competitive market to minimise economic and regulatory barriers for current and new licensees. Where there is a relevant cause or precedent for an alternate operative measure, these amendments could be repealed or removed.

Overall, the proposed sunsetting of this legislation presents less regulatory risk for licensees, compared to an administrative review process that is not legally binding, and would rely on the commitment of a future elected Government.

 

Appendix A

 

Local Content and Local Presence Requirements for Regional Commercial Radio

 

The local content and local presence requirements for regional commercial radio licenses were introduced as part of the Government’s media reform package in 2006. The provisions aimed to ensure that commercial radio services in regional areas continued to provide local content and maintain a local presence in the event that control of a licence changed. Additional reporting requirements were introduced to enable ACMA to monitor the levels of local content and ensure that licensees met their obligations to maintain a local presence following a trigger event.

 

Section 43C of the BSA requires ACMA to make and maintain a licence condition requiring all regional commercial radio licensees to broadcast, between 5am and 8pm each business day, a specified minimum level of material of local significance. That level has been set at 3 hours for the majority of licensees and 30 minutes for licensees in small towns. ACMA has defined ‘material of local significance’ as material that is hosted in, produced in, or relates to a regional commercial radio licensee’s licence area.

 

To ensure compliance with these requirements, regional commercial radio licensees must compile a local content statement setting out how these minimum levels will be provided each business day.

 

In addition, the BSA includes rules for licensees that have been subject to a ‘trigger event’ (the transfer of a licence, formation of a new cross-media group or a change of controller for a cross-media group). Section 43B of the BSA requires ACMA to make and maintain a licence condition requiring each trigger event-affected licensee to maintain the local presence (the employment of local staff and the use of local studios and production facilities) for a licence at the same levels that existed in the 3-month period before the trigger event for a 2-year period.

 

Division 5C of Part 5 of the BSA requires trigger event-affected licensees to meet minimum standards for local news and information by providing specific levels of news and information content each week.

 

These broadcasters must also provide:

·            at least 62.5 minutes of local news bulletins per week, consisting of a minimum number of local news bulletins per business day (either one per business day, or the average number of local news bulletins broadcast under the licence on per business day during the year before the trigger event, whichever is greater);

·            one local weather bulletin per business day;

·            one community service announcement per week; and

·            emergency warnings as required.

 

The local content that is broadcast to fulfil this requirement can be counted towards to the material of local significance requirements for all regional commercial radio licensees in the licence condition made by ACMA in accordance with section 43C of the BSA.

 

ACMA has advised that the commercial radio industry has expressed concern about the burden that the provisions place on regional commercial radio broadcasters. 

 

ACMA has advised that 151 regional commercial radio broadcasting licences have been affected by at least one trigger event since 4 April 2007 (when the provision was introduced). 41 licensees have been affected by a single trigger event and 110 licensees have been subject to multiple trigger events.

 

The Productivity Commission report stated that these obligations can seriously affect the operation of regional radio stations, preventing them from responding to changes in technology, local labour markets and product market conditions. In its annual review report, the Productivity Commission also asserted “stations subject to this trigger event provision are likely to be at increased risk of business failure because of the constraints of their ability to respond to changing circumstances” (page 167 of the report refers).

 

The perceived value of local content 

 

The objectives of the BSA include the provision of “appropriate coverage of matters of local significance” (subsection 3(1)(g)) and promoting “the availability to audiences throughout Australia of a diverse range of radio and television services” (subsection 3(1)(a)). These requirements are not met purely through the provision of commercial radio services, but through a range of broadcasting services available to regional communities, including those provided by the community and national broadcasting sectors of the industry.

 

There is evidence to suggest that local content is valued by regional audiences. The level of local content in regional media services has been reviewed a number of times, including by House of Representatives and Senate standing and legislative committees and by ACMA [49] . Parliamentary inquiries have identified concerns arising from levels of consolidation of ownership in the regional radio industry, the loss of independently owned local stations and an increase in networked, pre-recorded, automated and syndicated programming.

 

In 2017, ACMA’s Local Content in Regional Australia - 2017 report found that 89 per cent of regional Australians consider local content important and 86 per cent consider local news important.

 

It has been a Government priority to ensure that the liberalisation of the media regulatory framework did not lead to further reductions in local content on commercial television or commercial radio and that, where possible, concerns about diminishing levels of local content were addressed within a flexible regulatory framework. When introducing the media ownership changes in 2006, the Government intended to ensure that, should cross-media regional media companies emerge following the removal of cross-media restrictions, such companies, which would be operating across a number of markets and multiple media, continued to provide adequate local services to each licence area in which they operate. The Government considered the continued provision of these services was necessary on the basis of equity to ensure that regional and rural Australians received local content which reflected local identity and culture and was comparable to the services received in metropolitan areas.

 

 

 



 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Broadcasting Legislation Amendment (2021 Measures No. 1) Bill 2021

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the  Human Rights (Parliamentary Scrutiny) Act 2011 .

 

OVERVIEW OF THE BILL

The  Broadcasting Legislation Amendment (2021 Measures No. 1) Bill 2021  (the Bill) amends the  Broadcasting Services Act 1992  (the BSA) and the Radiocommunications Act 1992 (the RA) by:

a.        halving the annual expenditure requirement for Australian drama programming on subscription television broadcasting licences from 10 per cent to 5 per cent on an ongoing basis, to reduce the regulatory burden;  

b.       moving the subscription TV captioning rules from the BSA into a disallowable Ministerial instrument;

c.        removing a redundant provision from the digital radio framework in the RA to reflect that there is now only one spectrum band for digital radio;

d.       extending grandfathering arrangements to protect commercial radio broadcasters from breaching statutory control and local content obligations as a result of new population determinations made by ACMA; and

e.        extending the date for ACMA to implement grants under the Regional and Small Publishers Innovation (RASPI) Fund beyond 30 June 2021.

  

HUMAN RIGHTS IMPLICATIONS

 

Australia is a signatory to the International Covenant on Civil and Political Rights (the ICCPR), and the International Covenant on Economic, Social and Cultural Rights (ICESCR).  These conventions are listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 . The Bill engages several human rights:

 

·          Rights of people with a disability (CRPD)

·          Right of accessibility to information and communications (Article 9, CRPD) 

·          Right of equality and non-discrimination (Article 5, CRPD, Article 26 ICCPR)

·          Right to enjoy and benefit from science and culture (Article 15, ICESCR)

 

Item (a) New Eligible Drama Expenditure Arrangements  

The Bill potentially engages the following human right:

·            Right to take part in cultural life (Article 15 ICESCR).

 

Right to take part in cultural life

The objectives of the New Eligible Drama Expenditure (NEDE) Scheme provisions of the Bill are to reduce the minimum level of Australian drama expenditure required by subscription television broadcasting licensees and certain subscription television channel providers from 10% to 5%.

With the amendments, Division 2A of Part 7 of the Broadcasting Services Act 1992 requires certain subscription television channel providers and licensees to spend at least 5% of their total programming expenditure on new Australian or New Zealand drama productions or co-productions.

 

Item (b) - Subscription TV Captioning Arrangements 

The proposed item (b) potentially engages the following human right:

·            Rights of people with a disability (CRPD)

 

Rights of people with a disability

 

The CRPD recognises the barriers that people with a disability may face in realising their rights. The rights under all human rights treaties apply to everyone, including people with disability. However, the CRPD applies human rights specifically to the context of people with disability.

 

The proposed item (b) objectives relate to the rights of people with a disability. They maintain current access to television services for people with a hearing impairment. This is consistent with Australia’s international obligations under the CRPD and domestic policies, such as the government’s social inclusion policy.

 

The proposed item (b) engages Australia’s obligations under the following human rights law treaties:

·            The CRPD, in particular:

o     Article 5 which provides for the right to equality and non-discrimination, and obliges States Parties to take all appropriate steps to ensure that reasonable accommodation is provided

o     Article 9 which obliges States Parties to take appropriate measures to ensure that persons with disabilities have access, on an equal basis with others, to information and communications

o     Article 21 which states that States Parties must take all appropriate measures to:

§    ensure that information intended for the general public is provided to people with disability in accessible formats and technologies appropriate to different kinds of disabilities in a timely manner and without additional cost (Article 21(a));

§    urge private entities that provide services to the general public to provide information and services in accessible and usable formats for persons with disabilities (Article 21(c)); and

§    encourage the mass media to make their services accessible to persons with disabilities (Article 21(d))

 

o     Article 30 states that countries must take all appropriate measures to ensure that persons with disabilities:

·                 enjoy access to cultural materials in accessible formats; and

·                 enjoy access to television programs, films, theatre and other cultural activities, in accessible formats.

·            The International Covenant on Economic Social and Cultural Rights (ICESCR), particularly:

o     Article 15 - which obliges States Parties to recognise the right of everyone to take part in cultural life

·            The International Covenant on Civil and Political Rights (ICCPR), particularly:

o     Article 26 - which provides for the right to equality and non-discrimination

 

The proposed item (b) objectives are directed at continuing to deliver appropriate captioning obligations on STV licensees and that these obligations are amended in a flexible and timely manner. It achieves this by replacing obligations on STV licensees currently set out in Division 3 of the BSA rules set out in a legislative instrument to be made by the Minister of Communications.

 

The benefit of setting out the STV captioning rules in a legislative instrument instead of within the BSA is that the rules may be appropriately amended in a more timely and efficient manner in line with the changing circumstances of the STV industry and the views of Australians for whom captioning enhances their access to broadcast television. Failure to implement these measures would mean that persons relying on captioning on STV licensees are likely to be affected by inappropriate rules which cannot be amended in a more flexible manner.

 

It is expected that future legislative instruments will be made following public consultation in which the views of persons with a disability are expressly sought.

 

 

Item (c) Removing redundant digital radio provision.

 

Item (c) in this Bill does not engage any of the applicable rights or freedoms.

 

Item (d) - Grandfathering arrangements relating to new population determinations made by ACMA

 

Item (d) in this Bill does not engage any of the applicable rights or freedoms.

 

Item (e) - Extending the timeframe for RASPI Package financial beyond 30 June 2021

 

Item (e) in this Bill does not engage any of the applicable rights or freedoms.

 

 

 

 

 

CONCLUSION

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the  Human Rights (Parliamentary Scrutiny) Act 2011 .

To the extent that the measures in the Bill may engage rights in the ICCPR and ICESCR, as outlined above, the measures are reasonable and proportionate to the goal of reducing the regulatory burden on the broadcasting industry.

 

 

ABBREVIATIONS

 

The following abbreviations are used in this explanatory memorandum:

 

ACCAN                      Australian Communications Consumer Action Network

ACCC                         Australian Competition and Consumer Commission

ACMA                        Australian Communications and Media Authority

Bill                              Broadcasting Legislation Amendment (2021 Measures No. 1) Bill 2021

BSA                            Broadcasting Services Act 1992

COVID-19                  Coronavirus                

CRPD                         Convention on the Rights of People with a Disability

DAB                           Digital Audio Broadcasting

DRMT                         Digital Radio Multiplex Transmitter

ETSI                            European Telecommunications Standards Institute

ICCPR                                    International Covenant on Civil and Political Rights

ICESCR                      International Covenant on Economic, Social and Cultural Rights

JSCEM                        Joint Standing Committee on Electoral Matters

Minister                       Minister for Communications, Urban Infrastructure, Cities and the Arts

NEDE                         New Eligible Drama Expenditure

RA                              Radiocommunications Act 1992

RASPI                                    Regional and Small Publishers Innovation program

STV                             Subscription television

 



 

NOTES ON CLAUSES

 

1.              Clause 1 provides that the Bill, when enacted, may be cited as the Broadcasting Legislation Amendment (2021 Measures No.1) Act 202l.

2.              Clause 2 deals commencement provisions of the Bill. All Schedules will commence on the day after the Act receives Royal Assent, except for Schedule 6.

3.              The provisions in relation to Schedule 2 dealing with subscription television captioning will commence on the day after a proclamation is made. If a proclamation is not made within 12 months beginning on the day the Act receives Royal Assent, the provisions will be repealed on the day after the end of that period.

4.              Clause 3 provides that legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in that Schedule, and any other item in a Schedule has effect according to its terms. 

Schedule 1 -New Eligible Drama Expenditure Scheme

Schedule 1 to the Bill proposes to amend the BSA to reduce subscription television broadcasting licensees’ minimum levels of expenditure on new eligible drama programs, from 10% to 5%.

 

These amendments will reduce the regulatory burden on subscription television broadcasting licensees by halving the expenditure requirement for Australian drama programming from 10% to 5%. These changes are part of a broader set of reforms to the regulation of Australian content, the first of which was implemented through the Broadcasting Services (Australian Content and Children’s Television) Standards 2020 , which apply to commercial television broadcasting licensees and commenced on 1 January 2021.

 

Broadcasting Services Act 1992

Item 1 - Section 103A

Item 2 - Section 103N (heading)

Item 3 - Subsections 103N(1) and (2A)

Item 4 - Subsection 103N(3) (note)

Item 5 - Paragraphs 103NA(1)(c) and 103P(1)(d)

Item 6 - Subsection 103P(3) (definition of shortfall amount)

Item 7 - Paragraph 103Q(1)(d)

Item 8 - Subsection 103Q(3) (definition of shortfall amount)

Item 9 - ­Section 103R (heading)

Item 10 - Subsections 103R(1) and (2A)

Item 11 - ­ Subsection 103R(4) (note)

Item 12 - Paragraphs 103RA(1)(c) and 103S(1)(c)

Item 13 - Subsection 103S(3) (definition of shortfall amount)

Item 14 - Section 103T (heading)

Item 15 - Subsections 103T(1) and (3)

Item 16 - Paragraph 103TA(1)(c)

Item 17 - Section 103U (heading)

Item 18 - Subsections 103U(1) and (2A)

 

 

Item 19 - Subsection 103U(3) (note)

Item 20 - Paragraphs 103UA(1)(c) and 103V(1)(d)

Item 21 - ­Section 103R (heading)

Item 22 - ­Section 103R (heading)

Item 23 - Subsection 103W(3) (definition of shortfall amount)

Item 24 - Section 103X (heading)

Item 25 - Subsections 103X(1) and (2A)

Item 26 - Subsection 103X(4) (note)

Item 27 - Paragraphs 103XA(1)(c) and 103Y(1)(c)

Item 28 - Subsection 103Y(3) (definition of shortfall amount)

Item 29 - Section 103Z (heading)

Item 30 - Subsections 103Z(1) and (3)

Item 31 - Paragraph 103ZAA(1)(d)

 

Items 1 to 31 amend each reference to 10% in the specified provisions to omit the reference and substitute a reference to 5%.  The combined effect of this set of changes is to reduce the minimum level of expenditure on new eligible drama programs, in relation to a subscription TV drama service or channel for each financial year, from 10% to 5% of the total program expenditure for the particular service or channel;

 

The expenditure requirements (and carry-forward/ shortfall accrual arrangements) are set out in Division 2A of Part 7 of the BSA, also known as the New Eligible Drama Expenditure (NEDE) Scheme. This Division imposes requirements, as licence conditions on subscription television broadcasting licensees (licensees), for licensees that provide a subscription TV drama service, and drama channel providers who supply a channel that is televised as a subscription TV drama service, to ensure a minimum level of expenditure on new eligible drama programs each financial year.

 

Currently, if a licensee provides a subscription TV drama service, expenditure on new eligible drama programs for each financial year must be at least 10% of total program expenditure in relation to the service. If a channel provider supplies a channel that is televised as a subscription TV drama service, the 10% expenditure requirement is calculated by reference to the total program expenditure incurred by the channel provider.  Division 2A of Part 7 of the BSA sets out specific requirements where program material is supplied by a channel provider (subdivision B), a pass-through provider (subdivision C), a licensee (subdivision D), or partly by a channel provider (subdivision E), partly by a pass-through provider (subdivision F) or partly by a licensee (subdivision G).

 

Subdivisions of Division 2A of Part 7 of the BSA provide for the carry-forward of excess expenditure above the minimum requirement, or the make-up of a shortfall amount, is to be treated in the next financial year.

 

Licensees, channel providers and part-channel providers are required to lodge annual returns with ACMA about their program expenditure (refer sections 103ZA and 103ZB).

 

These items do not affect the operation of the NEDE Scheme in any other way.

Item 32 - Application of amendments

Item 32 provides that amendments made by Schedule 1 to the Bill (reducing the minimum level of required expenditure) will apply in relation to the financial year starting on 1 July 2021 and later financial years. In the event that Schedule 1 commences after 1 July 2021, the effect of this application provision is that the changes will have effect for the entire 2021-2022 financial year and following financial years. 

 

Item 33 - Pre July 2021 shortfall amounts and carry forward expenditure to be disregarded

 

Item 33 sets out the transitional arrangements that apply in respect of the reduction in the minimum level of expenditure under the NEDE Scheme. Under the NEDE Scheme, nominated carry-forward expenditure is able to be counted towards the minimum requirement in the following year and shortfall amounts must be made-up in the following year.

 

Item 33 provides two transition rules in light of the reduction in the minimum expenditure requirement for the 2021-2022 financial year and subsequent years. The first rule is that for the financial year 2021-2022, expenditure shortfall amounts from the 2020-2021 financial year are not required to be made-up in the 2021-2022 financial year. The second rule is that no excess expenditure from the 2020-2021 financial year may be nominated as carry-forward expenditure and counted towards the minimum requirement in the 2021-2022 financial year. 

Annual reporting obligations under the NEDE Scheme that relate to the 2020-2021 financial year will continue to apply, and compliance with 2020-2021 obligations will continue to be monitored by ACMA.

 

Schedule 2 - Captioning Obligations

Broadcasting Services Act 1992

Item 1 - Section 130ZK

Item 1 repeals a number of definitions contained in section 130ZK currently in use in Division 3 of Part 9D. The repeal of these definitions are consequential to the repeal of Division 3 outlined at clause 9, reflecting that these definitions will no longer be required.

The definitions to be repealed include:

(a)   Category A subscription television general entertainment service;

(b)   Category A subscription television movie service ;

(c)   Category B subscription television general entertainment service ;

(d)  Category B subscription television movie service ;

(e)   Category C subscription television general entertainment service ;

(f)   Category C subscription television movie service ;

(g)   channel ;

(h)   channel provider ;

(i)    designated viewing hours ;

(j)    general entertainment program ;

(k)   incidental matter ;

(l)    movie program ;

(m)  music program ;

(n)   part-channel provider ;

(o)   sports program .

Item 2 - Section 130ZK

Item 2 inserts the new definition subscription television captioning scheme into section 130ZK. The scheme is prescribed in section 130ZV.

Item 3 - Section 130ZK

Item 3 repeals the following definitions contained in section 130ZK .

a)         subscription television general entertainment service

b)         subscription television movie service ;

c)         subscription television music service ;

d)        subscription television news service ;

e)         subscription television sports service .

The repeal of these definitions are consequential to the repeal of Division 3 set out in Item 9.

Item 4 - Section 130ZK

Item 4 inserts the definition targeted viewing hours which has the meaning given by section 130ZL (see Item 6).

Item 5 - Sections 130ZKA, 130ZKB and 130ZKC

Item 5 repeals the sections 130ZKA, 130ZKB and 130ZKC. These sections define the meanings of channel provider , part-channel provider and supply of channel or package.

Item 6 - Section 130ZL

Item 6 repeals the existing section 130ZL— Designated viewing hours and substitutes a new section 130ZL— Targeted viewing hours . The section sets out the hours to which the captioning obligations of commercial broadcasters and national broadcasters (as set out in Division 2), apply.

The intention of the substitution is firstly to remove redundant provisions which applied before 1 July 2014.

The use of the one definition targeted viewing hours is also intended to achieve consistency across Part 9D of the BSA where the term targeted viewing hours is also employed, for example, throughout section 130ZUAA.

Item 7 - Paragraphs 130ZR(1)(a) and (b)

Item 7 omits designated viewing hours from paragraphs 130ZR (1)(a) and (b) and substitutes the term targeted viewing hours . These subsections provide for commercial broadcasting licensees and national broadcasters to provide a captioning service for television programs during targeted viewing hours and for news or current affairs programs outside targeted viewing hours (the basic rule).

Item 8 - Subsection 130ZUAA(7)

Item 8 repeals subsection 130ZUAA(7). This section defined targeted viewing hours in the context of the operation of target reduction orders. The definition of targeted viewing hours will now be set out in section 130ZL.

Item 9 - Division 3 of Part 9D

Item 9 repeals Division 3 of Part 9D of the BSA. Division 3 currently sets out the captioning obligations of STV licensees. This Item substitutes a new Division 3 which contains a new section 130ZV Subscription television captioning scheme .

The intention of section 130ZV is to require the Minister, by legislative instrument, to prescribe a subscription television captioning scheme which will deal with the provision of captioning services provided by STV licensees.

Subsection 130ZV(2), without limiting subsection (1), details the matters which the scheme may provide for. These matters may include:

·            annual captioning targets for STV services, including methods for working out the targets;

·            applications for partial or total exemptions from annual captioning targets, including who may make such applications, the information or documents that must accompany applications and the making of decisions in relation to applications;

·            reporting and record-keeping obligations of STV licensees; and

·            the publication of information relating to the scheme, including decisions made under the scheme.

The scheme may also provide for applications to be made to the Administrative Appeals Tribunal.

Subsection 130ZV(3) provides an option for the scheme to empower ACMA to make decisions of an administrative character in relation to particular matters. An example of matters of an administrative character in relation to which ACMA may make decisions may include the form in which applications for exemptions from captioning obligations should be made or the manner in which any compliance reports which may be established under the scheme should be submitted to ACMA or published by a STV licensee.

Subsection 130ZV(4) provides for the scheme to prescribe a matter or thing differently for different kinds of persons, things or circumstances. For example, the scheme may set out different captioning targets for different genres of STV services based on the program content the services provide. Genres of STV services provided in 2021 include movies, news, sports, general entertainment and music.

Subsection 130ZV(5) provides for the rules contained in the scheme to apply, adopt or incorporate information contained in other instruments or written documents. For example, should the scheme establish an exemption which has regard to a certain level of audience share, the scheme may reference particular written industry reports for television audience share reports published from time to time setting out audience share. In 2021 an example of industry standard data for television audience share data is OzTAM data.

Item 10 - Subsection 130ZZC(5)

Item 10 repeals subsection 130ZZC(5) which deals with the provision of annual compliance reports by STV licensees and substitutes a new subsection. Where the subsection referenced compliance with Division 3, it will now reference compliance with the STV captioning scheme.

Item 11 - Subsection 130ZZD(3)

Item 11 amends subsection 130ZZD(3) which deals with record keeping by omitting “the responsible person’s report” and substituting “all reports” for better clarity.

Item 12 - Subsection 130ZZD(3)

Item12 amends subsection 130ZZD(3) by substituting “is given” with “are given”, consequential to the amendment in item 12.

Item 13 - Division 7 of Part 9D

Item 13 repeals Division 7 of Part 9D of the BSA. The provisions of this division are spent. The Division provided for a review of Part 9D to be conducted by 31 December 2016.

Item 14 - Subsection 204(1)

Item 14 repeals items included in the table at subsection 204(1) of the BSA which sets out matters for which an application may be made to the Administrative Appeals Tribunal for review of a decision. The items to be removed reference decisions made by ACMA under section 130ZY to make or refuse to make an exemption order or target reduction orders. Section 130ZY, as part of Division 3 of Part 9D of the BSA, will be repealed (see Item 9).

Item 15 - After subsection 204(4)

Item 15 inserts a new provision after subsection 204(4) of the BSA which will allow applications to be made to the Administrative Appeals Tribunal for review of a decisions made under the subscription television captioning scheme, where the scheme provides that a particular decision is reviewable.

Item 16 - Paragraph 10(1)(e)(b) of Schedule 2

Item 16 amends paragraph 10(1)(eb) of Schedule 2 of the BSA which identifies the provisions of Part 9D of the BSA as a condition applicable to STV broadcasting licenses. The amendment includes provisions of the subscription television captioning scheme as a condition applicable to STV broadcasting licence conditions.

Item 17 - Paragraph 11(1)(bc) of Schedule 2

Item 17 amends paragraph 11(1)(bc) of Schedule 2 of the BSA which currently lists compliance with Part 9D of the BSA (if it applies to the licensee), as a condition applicable to broadcasting services provided under class licences. The amendment now includes provisions of the subscription television captioning scheme as a condition applicable to broadcasting services provided under class licences.

Item 18 - Application provision

Item 18 notes that the amendment of subsection 130ZZC(5) of the BSA made by item 10 of this Schedule applies in relation to reports required to be given in the financial year in which this item commences and later financial years.

 

 

Schedule 3 - Digital radio services

Radiocommunications Act 1992

Item 1 - Subsection 44A(10)

Item 1 repeals a provision which requires that all frequency channels allotted or reserved in a digital radio channel plan be within the same frequency band. This provision prevented issues caused by digital radio standards for both L-Band and VHF spectrum bands. Digital radio is now only provided in the VHF band, as the L-Band digital radio ETSI standard was removed in 2016.

This provision is now redundant and can be repealed.

 

Schedule 4 - Grandfathering arrangements with regard to population determinations made by ACMA

Broadcasting Services Act 1992

Item 1 - Subsection 43C(4)

Subsection 43C(4) of the BSA provides that a regional commercial radio broadcasting licensee does not breach a condition imposed as a result of subsection 43(1), if it is only as a result of the ACMA making a new licence area population determination under section 30 (which replaces any previous determination). Instead, “the previous determination” continues to apply. Item 1 would clarify the intent of this exemption; a licensee will not be in breach of the condition as a result of a new licence area population determination. Instead, the most recent determination that does not put the licensee in breach will continue to apply as if it remained in force.

Item 2 - After subsection 43C(4)

Item 2 would provide that subsection 43C(4), as amended by this Bill, ceases to have effect 5 years after the date of the amendment’s commencement (being the day after the Act receives the Royal Assent). The effect of this is that after the sunsetting date, licensees would no longer be protected from inadvertently breaching the local content rules once ACMA determines new licence area populations. This sunsetting provision signals the Government’s commitment to undertaking a review of the exemption in subsection 43C(4) within 5 years. The review will assist the Department to determine how changes to population licence areas over the prescribed period have affected licensees operating in the market, as well as the communities they service; ascertain whether these exemptions remain appropriate and relevant; and provide actions and recommendation to Government based on the formal assessment.

Item 3 - Section 52

Item 3 would insert the subsection numbering of (1) before the content of section 52. This change is consequential to Item 5 which would insert a new subsection 52(2).

Item 4 - Section 52

Section 52 of the BSA provides that a commercial broadcasting licensee and datacasting transmitter licensee do not breach their obligations under Divisions 2 or 3, if it is only as a result of ACMA making a new licence area population determination under section 30. Instead, similarly to subsection 43C(4), “the previous determination” continues to apply. Item 4 would clarify the intent of this exemption; a licensee will not be in breach of Division 2 or 3 as a result of a new licence area population determination, and the most recent determination that does not result in a breach will continue to apply as if it remained in force.

Item 4 would also correct a previous drafting error. The reference to “subsections” in section 52 is corrected to “provisions”, as the text of paragraph (b) refers to “provisions”.

Item 5 - At the end of section 52

Item 5 would add a new subsection 52(2) which provides that section 52, as amended by this Bill, ceases to have effect 5 years after the date of the amendment’s commencement (being the day after the Act receives the Royal Assent). The effect of this is that after the sunsetting date, licensees would no longer be protected from inadvertently breaching the local content rules once ACMA determines new licence area populations.

Similarly to Item 2, this sunsetting provision signals the Government’s commitment to a review of the exemption in section 52 within 5 years. The Government’s formal commitment to a review would lead to an assessment of how any changes to population determinations over time affect the market, licensees and the community; and articulate any further legislative change that would be required to support the policy intent and objects of the Act, with respect to section 30 (population determinations).

 

Item 6 - Application provision

Item 6 is an application provision relating to Items 1 and 4. Item 6 specifies that those amendments can apply on a retrospective or prospective basis, depending on the relevant licence area population determination’s point in time. The most recent licence area population determination that does not result in a licensee to be in breach of its relevant obligations will continue to apply as if it remained in force, regardless of when that determination was or is made.

 

Schedule 5 - Regional and Small Publishers Innovation Fund (RASPI Fund)

Broadcasting Services Act 1992

Item 1 - After paragraph 205ZH(1)(e)

Part 14F of the BSA provides that the ACMA may, on behalf of the Commonwealth, make a grant of financial assistance to constitutional corporations that publish a newspaper, magazine or other periodical, or a content service provider (within the meaning of Schedule 7) in respect of the financial years commencing 1 July 2018, 1 July 2019 and 1 July 2020.

Item 1 of this Schedule would add a new paragraph to subsection 205ZH(1) describing the financial year commencing on 1 July 2021. This change would provide ACMA with an extension of the legislative authority, by one financial year, to enable ACMA to continue its administration of the RASPI Fund, including making outstanding financial payments to grantees. There will be no change to the total amount of financial assistance allocated to the RASPI Fund.  

 




[1] Screen Australia (2016), Screen currency: valuing our screen industry . Pg. 9.

[2] OzTam data, Analysis of top 1500 shows 2019.

[5] Australian Children’s Television Foundation (2020), public submission to Screen Options Paper . Pg. 6.

[6] Australian Children’s Television Foundation (2019), Why is Australian children’s content so important?

[7] Screen Australia (2016), Screen currency: valuing our screen industry . Pg. 5.

[8] Screen Australia (2016), Screen currency: valuing our screen industry . Pg. 8.

[11] Australian Bureau of Statistics (1990), Overseas Arrivals and Departures .

[12] The Sydney Morning Herald Traveller (2014), Hogan hero: why this is our best tourism ad ever .

[13] Broadcasting Services Act 1992, s3(1)(e).

[17] ACMA (2020), Communications report 2018-2019 . Pg. 11 and pg. 95.

[20] Telsyte (2019), Australians turn to multiple subscriptions for entertainment

[21] IBIS World (2019) , Against the stream: Competition from streaming video services has negatively affected revenue. Pg. 7.

[22] OzTAM and RegionalTAM data.

[24] Source: OzTAM and RegionalTAM data, 5-city-metro, combined markets, total people, average audience, consolidated 28.

[25] OzTAM and RegionalTAM data, compiled by Screen Australia. See historical data and 2019 in review .

[27] OzTAM data.

[30] ACMA and Screen Australia (2020), Supporting Australian Stories on our Screens Options Paper . Pg. 28.

[31] ACMA and Screen Australia (2020), Supporting Australian Stories on our Screens Options Paper . Pg. 5.

[32] ACMA and Screen Australia (2020), Supporting Australian Stories on our Screens Options Paper . Pg. 5.

[33] ACMA and Screen Australia (2020), Supporting Australian Stories on our Screens Options Paper . Pg. 5.

[34] ACMA and Screen Australia (2020), Supporting Australian Stories on our Screens Options Paper . Pg. 5.

[35] PwC (2011), How Do Local Content Requirements Impact Australian Productions? Review and Analysis of Broadcast Sector Minimum Content Requirements. (report prepared for the Department of Broadband, Communications and the Digital Economy) Pg. 49.

[36] ABS data.

[39] Productivity Commission (2011), Identifying and Evaluating Regulation Reforms .

[40] Australian Communications and Media Authority and Screen Australia, Supporting Australian Stories on our Screens p5

[42] Venture Consulting, The effects of COVID-19 on the Australian media industry, report to the Australian Government Department of Infrastructure, Transport, Regional Development and Communications, 2020.

[45] PwC (2011), How Do Local Content Requirements Impact Australian Productions? Review and Analysis of Broadcast Sector Minimum Content Requirements. (report prepared for the Department of Broadband, Communications and the Digital Economy) Pg. 49.

[46] Section 11 of the BSA.

[47] A licence area is the designated geographical area of Australia that defines where a service is authorised to be provided under a commercial or community broadcasting licence. Licence areas for broadcasting service band licences are described in a licence area plan or television area plan (section 29 of the BSA).

[48] Section 61AA of the BSA

[49] Investigations into local content in regional areas conducted by the ACMA include: Investigation into Local Content on Regional Commercial Radio - Trigger Events (March 2007); Local Content Levels Investigation (June 2007); 2009 Regional Radio Local Content Report (November 2009); 2012 Regional Radio Local Content Report (November 2012); Regional Television Local Content Investigation (December 2013); and Local Content in Regional Australia - 2017 report (May 2017).