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Tuesday, 15 November 1983
Page: 2663


Mr DUFFY (Minister for Communications) —by leave-In 1978, and again in 1979, the former Minister for Post and Telecommunications made major policy statements setting out policy guidelines for development of the broadcasting system. Those statements were designed to keep the Parliament and, through it, the public informed of government intentions and proposed actions relating to particular areas of the broadcasting system and they received bipartisan support. They were useful contributions to informed discussion of communication matters. On this occasion I wish to spell out the Government's intentions as they relate to the impact of the satellite system upon broadcasting. Because they are interrelated matters, I will also cover supplementary licences for television and radio and, at a later date, issue a statement on implementation of the supplementary licence scheme.

Ownership of Aussat Pty Ltd

I wish to inform the Parliament of the Government's decision on the future of Aussat Pty Ltd and its ongoing relationship with Telecom Australia. The Government has decided to retain Aussat as a Commonwealth owned company and to invite Telecom to purchase up to 25 per cent of the Commonwealth's shareholding. This decision means that the Government has revoked the earlier decision to offer 49 per cent of the Commonwealth's shareholding in Aussat to the public. That decision was taken in the context of a severe deficit situation, and it was always qualified by the Government's determination to ensure the protection of public interest aspects of satellite services in Australia. Legislation will be introduced to provide that shareholding in Aussat will always remain in public sector ownership. Changes will be made also to Aussat's memorandum and articles of association to reinforce this policy decision and to provide that Aussat and Telecom co-operate to bring about the co-ordination of satellite services with terrestrial services.

The Government has also decided that private sector users of the satellite may own and operate earth stations to access the satellite and own terrestrial links to connect their earth stations to their premises. They will not be permitted to sell spare transponder capacity or to allow third party traffic. In other words, the regulations of satellite services will be in line with existing regulation by Telecom of terrestrial services. These decisions on the future of Aussat and its relationship with Telecom set a major part of the scene for consideration of satellite usage in relation to the Government's broadcasting policy. The central principles of that policy are to maximise diversity of choice of radio and television services and to discourage concentration of ownership and control of stations, while maintaining the viability of the broadcasting system. We have also been particularly conscious of the significant number of Australians who do not yet have access to commercial radio or television service.

Satellite Program Services

The previous Government struggled unsuccessfully to come to terms with the potential of the satellite system. There can be no doubt that satellites are powerful agents for change. The aim is to define strategic objectives and to make decisions accordingly. In the case of broadcasting, the previous Government failed to define its strategic objectives and the satellite debate was allowed to centre upon the concept and implications of direct broadcasting; that is, direct reception of unencoded satellite signals by the public using low cost domestic earth stations. Broadcasters and others therefore spent many hours arguing the pros and cons of particular commercial broadcasters being allocated the 30-watt transponders.

This was misguided and unproductive. Although they are capable of direct broadcasting to low cost domestic dishes, 30-watt transponders are no different in principle from the other transponders in the satellite system. Once again, discussions of broadcasting matters have been bedevilled by our preoccupation with technology alone. This is not to say that we should allow direct broadcasting by commercial organisations via the satellites at this time. Because such direct broadcasting could have disruptive effects upon existing broadcasters, we wish to see it given detailed consideration by government. We have therefore decided that only the Australian Broadcasting Corporation will provide direct broadcasting services from the first two satellites. Commercial broadcasting uses of all transponders will be confined to national beams and will be encoded. Put quite simply, at this stage it will not be possible to receive direct broadcasts of commercial services via the satellites in the home.

However, we do not intend to defer commercial DBS indefinitely. While we accept that a period of structural adjustment to the satellite-related technologies is desirable, we are also very conscious of the needs of Australians in remote and underserved communities. We supported and will continue the previous Government' s policy for HACBSS I, that is, an ABC television service, and two radio services to be available by DBS to all Australians. As the system settles down we intend to review the question of commercial DBS. However, it must be said that DBS is not, and never has been, the central question raised by the satellite system. The particular advantages of satellite technology are in making programs nationally available. When used for the compilation of program material between broadcasters-what we might call program assembly-the satellite system simply offers an improved version of the existing terrestrial networks.

The satellite system can also be used to make syndicated program services available via the satellite system for sale to commercial broadcasters. In this statement, I refer to such services as satellite program services, or SPS, which will represent a major new development in Australian broadcasting. The cost of terrestrial distribution is directly related to distance, which effectively prevents continuous relays in real time. However, satellite costs are unrelated to distance and it will soon be technically possible to program a number of stations simultaneously from a central source at minimal cost. It will be seen that such developments could have far-reaching effects upon the broadcasting system, since if a single company were allowed virtually to program an unlimited number of stations, the ownership and control provisions of the Broadcasting and Television Act would be nullified. On the other hand, broadcasters already distribute such programs, often on relay and in real time. It would be nonsensical to ban such arrangements simply because they utilise the satellite system instead of terrestrial networks.

The Government does not believe that it should be involved in direct allocation of transponders. We see the satellite as one of several methods by which broadcasters distribute program material and similar in principle to the bearers provided by Telecom Australia. We therefore propose to inform Aussat Pty Ltd of some simple ministerial guidelines re broadcasting uses of the satellite system. However, Aussat will contract for services provided through all transponders on a normal commercial basis. These ministerial guidelines will initially cover only three matters, although I will have power to amend them as appropriate:

(a) Firstly all space station transponder capacity used for commercial television SPS would be in a national beam;

(b) all signals using space station transponder capacity for commercial television SPS would be encoded before transmission via satellite; and

(c) Aussat must make available to the ABC sufficient space station transponder capacity as may be required by the Corporation to provide HACBSS radio and television services.

Honourable members who have taken an interest in satellite matters will recognise that the third provision already exists in the memorandum and articles of association of Aussat Pty Ltd, together with a similar provision protecting services for the Department of Aviation.

The appropriate arena for regulatory activity is not in the satellite system but in broadcasting itself. Because they use valuable frequencies which are public property and because they have such an important effect upon both culture and society, broadcasters are regulated in every country of the world. In Australia we have a well established system of controls administered effectively by the Australian Broadcasting Tribunal at a distance from the government of the day. It is clearly appropriate to utilise that existing regulatory system. Accordingly, we propose to legislate during the Budget session of the Parliament next year to empower the Tribunal to authorise use of satellite program services by broadcasters. We do not propose to license suppliers of SPS per se, nor will they be regulated as to program content or subject to ownership and control provisions. They will merely negotiate contracts with Aussat Pty Ltd in a normal business-like way. We anticipate that potential providers of SPS will commence negotiations with Aussat immediately, with a view to having their services in place by the time the satellite system is operational. We anticipate, however, that a series of matters might be proposed for regulation by the Tribunal. I have in mind matters such as program standards, hours of service, control of stations, local content, exclusive contracts and the proportion of national to local advertising.

Because we do not have a monopoly of wisdom and because the people for whom all this is intended-the viewers and listeners-have a right to have their voices heard, I have directed the Tribunal to hold an inquiry into these matters and to report to me by 31 May 1984. The terms of reference for this inquiry make it clear that the Government's concern is not to impose unnecessary rules on broadcasters; radio, for instance, which has little in the way of centralised network stations and a strong tradition of localism, may well not require any regulations. We have indicated to the Tribunal that we want the regulation consistent with our strategic policy and that our central concern is to bring additional services to that significant number of Australians who do not yet have access to commercial brodcasting or have access to only one commercial television or radio service. The Tribunal may comment on such related matters as copyright legislation and provisions for Australian or local content of programs , but will not consider allocation of space station transponder capacity or contractual arrangements between Aussat Pty Ltd and suppliers of SPS.

Radiated Subscription Television Services

Let me now turn to Radiated Subscription Television Services-RSTV. In North America, where national satellite systems have been available since the early 1970's, SPS are widely available. Program 'packages' available to cable operators and other distributors, such as multipoint distribution services-MDS- for retransmission to their subscribers, range from Home Box Office to the Disney Channel, from a Madison Square Garden Network to Black Entertainment Television.

Australia does not have the variety of distribution outlets available in North America; in particular, I can confirm the Government's belief that cable television cannot be justified at this stage. However, other variants of the basic SPS model are worth consideration. The Government has therefore authorised me to invite interested parties, including the Australian Broadcasting Corporation, to make detailed proposals for RSTV services.

Of course, any RSTV service would be subscriber-based, that is, viewers would have to pay a monthly fee to receive the programs. It should be noted that RSTV could be established over a period of two to three years at significantly lower capital costs than cable and without CTV's radical impact upon telecommunications generally. Essentially, it would be a discretionary service. At this point I emphasis that no final decision has yet been made about whether to have an RSTV service, let alone who is to supply it. However, I expect to consider proposals early next year and will make a further statement at that time.

Supplementary Licences

The Government is most concerned about those areas where viewers do not have a choice of services. There is a considerable imbalance at present between people living in large metropolitan areas, who can choose between two or three commercial television services and those in regional areas, who have only one service. Moreover, some 200,000 households in remote areas have no commercial television at all. We hope to meet the immediate needs of regional areas by proclaiming the supplementary licence legislation, already on the statute books, for 1 December 1983. I will be covering this question in more detail in a later statement on implementation of the supplementary licence scheme; but, in the context of this statement, it should be noted that regional television stations already use the kind of material which will be provided by SPS. The effect of supplementary stations will be that more air time will be available in the relevant areas. In future regional viewers will see most of the programs available in the large metropolitan cities.

The Government is also aware of suggestions that the existing legislation should be amended to allow for two supplementary licences throughout Australia. This concept is currently being discussed by the so-called 'networks', that is the major, capital city television stations, and the regional stations. However, there are some obvious problems regarding the concentration of ownership, preservation of localism and the independence of regional stations. At this stage, I can say that we see such developments as a matter for future consideration; however, we are willing to consider any suggestions supported by both parties to the discussions.

Remote Areas and Commercial Television

Unfortunately, supplementary stations are no advantage to the 200,000 households in remote areas who do not have even an original commercial television service. The basic difficulty has been that the thinly scattered population in remote areas is not financially attractive to advertiser-supported services. While successive governments have extended the ABC television services-and our current Budget extends it to 42 new remote communities-no private entrepreneur has been able to provide these families with a commercial service. The satellite system, because it is cost-effective and convenient, may contribute towards a solution. Again, the Government is aware of several suggestions for extension of regional stations services and I will be happy to consider any proposals put to me. However, our major concern is to provide commercial services to Australians who are presently deprived of them. If the industry cannot produce a solution, we may have to consider more direct remedies, and the Government has asked me to provide a further submission on this question.

Let me now go back and summarise the Government's position regarding satellite- related broadcasting services. First, we confirm that the central principles of our broadcasting policy are to maximise diversity of choice in radio and television services and to discourage concentration of ownership and control of stations, while maintaining the viability of the broadcasting system. Second, in order to minimise disruptive effect upon regional stations, we have acted to prevent commercial direct broadcasting by the use of ministerial guidelines to Aussat Pty Ltd. The guidelines are simple and can easily be modified to suit changing conditions. Third, we do not see DBS as the central question raised by satellite technology. The satellite system represents a threat to our existing broadcasting system only because of its capacity for national distribution of signals in 'real time'. Accordingly, we have identified the provision of satellite program services, SPS, as a development which, while beneficial in itself, needs careful handling. SPS will therefore be allowed to develop freely, but broadcasters who propose to use SPS will be regulated by their existing statutory authority, the Australian Broadcasting Tribunal. Fourth, we do not yet have a fixed position on what matters should be regulated by the Tribunal; I have directed the Tribunal to inquire and report on this by 31 May 1984. Fifth, we will soon be inviting proposals for the provision of RSTV services and I will make a further announcement on this matter early next year. Finally, we hope to proclaim the legislation pertaining to supplementary licences for 1 December 1983. I intend to make a further statement covering inplementation procedures at a later date.

When this entire framework is in place, we expect that:

a. all Australians, no matter how remote the area in which they live, will be able to reveive the ABC television service and two ABC radio services;

b. every Australian will have at least one commercial television service potentially available; many will have two or three potentially available;

c. many Australians in regional areas will have a choice of two commercial radio services;

d. entrepreneurs interested in exploiting the broadcasting possibilities of the satellite system will be able to negotiate a flexible, commercially-oriented relationship with Aussat Pty Ltd; and

e. the essential elements of our dual system of broadcasting will be preserved.

The Government's primary concern is to see that radio and television services reach the people who want them and need them. The day has long since passed when broadcasting services could be regarded as luxuries. Virtually all Australian homes have both radio and television and people now regard the opportunity to choose between a range of services as their basic right. While we have always to be constrained by considerations of cost and good management, the Government's intention is to see that they get that choice.

GUIDELINES FOR PLANNING SATELLITE-RELATED BROADCASTING SERVICES

Satellite Program Services (see Note A)

Satellite Program Services-SPS-will not be licensed, regulated as to program content, or subject to ownership and control provisions. Suppliers of SPS will negotiate commercial contracts with Aussat Pty Ltd, subject only to the minsiterial guidelines re broadcasting uses of the satellite.

Commercial television licensees wishing to use an SPS on their stations will require formal authorisation from the Australian Broadcasting Tribunal. Legislation is pending.

Terms of reference for the Inquiry into Regulation of the Use of SPS by Broadcasters under section 18 of the Broadcasting and Television Act 1942 by the Australian Broadcasting Tribunal are at Note B. The Tribunal is to report by 31 May 1984.

Subject only to the above, commercial licensees will be free to negotiate contracts with any supplier of SPS.

Ministerial Guidelines re Broadcasting Uses of the Satellite System

The Minister for Communications has been authorised to inform Aussat Pty Ltd, on behalf of the Government, of ministerial guidelines re broadcasting uses of the satellite system. The Minister has authority to amend the guidelines as appropriate.

The initial guidelines are as follows:

a. as set out in its Memorandum and Articles of Association Aussat Pty Ltd will make available to the Australian Broadcasting Corporation sufficient space station transponder capacity as may be required by the Corporation to provide HACBSS services-radio and television;

b. all space station transponder capacity used for commercial television SPS will be provided only in national beams;

c. all signals using space station transponder capacity for commercial television SPS must be encoded before transmission via the satellite system.

Supplementary Licences

The Minister for Communications will accept applications for supplementary licences after the date of proclamation, which is anticipated to be 1 December 1983.

Policy regarding implementation of the supplementary licences will be available in a later ministerial statement.

Supplementary licensees will have the same freedom as existing or potential commercial licensees to negotiate contracts with suppliers of SPS. They will also be required to obtain authorisations from the Australian Broadcasting Tribunal.

Commercial Services for Remote Areas

It is a major objective of the Government's broadcasting policy to provide commercial services to those Australians who do not yet have access to them, or who have access to only one commercial radio or television service.

Detailed policy to achieve this objective is still under consideration and a decision will be announced during 1984.

A. 'Satellite Program Services'-SPS-are syndicated program services available via the satellite system for sale to commercial broadcasters-radio and televison . The exact definintion of such services will be determined by the Minister after consideration of a report by the Australian Broadcasting Tribunal on regulation of the use of SPS by broadcasters (see Note B).

B. The terms of reference for the Inquiry into Regulation of the Use of Satellite Program Services by Broadcasters are as follows:

I, Michael John Duffy, Minister for Communications, pursuant to Section 18 of the Broadcasting and Television Act 1942 ('the Act'), hereby direct the Australian Broadcasting Tribunal to hold an inquiry and make recommendations to me regarding the following matters:

1. Likely arrangements for providing satellite program services (SPS), that is, programs (including advertisements) distributed via the satellite system to commercial licensees for rebroadcast on their stations;

2. any amendments to the Act required to regulate the provision of commercial television SPS;

3. the form and process most appropriate for authorisation by the Tribunal of commercial television SPS;

4. the range of matters related to commercial television SPS which should be regulated by the Tribunal;

5. whether similar arrangements are required to regulate the provision of commercial radio SPS;

6. what measures are required to promote provision of commercial services to remote areas;

The Tribunal shall have regard for the following:

The Government's desire to maximise diversity of choice in broadcasting services and to discourage concentration of ownership and control of stations while maintaining the viability of the broadcasting system;

the significant number of Australians who do not yet have access to commercial broadcasting services or have access to only one commercial television or radio service;

recent Government decisions regarding satellite program services, supplementary television licences and related subjects.

The Tribunal shall not consider allocation of space station transponder capacity or contractual arrangements between Aussat Pty Ltd and providers of satellite program services, but should comment on such related matters as copyright legislation and provisions for Australian or local content of programs as it feels to be appropriate. The Tribunal shall report by 31 May 1984. I present the following paper:

Broadcasting system-Development of satellite-related services-Ministerial Statement, 15 November 1983.