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Wednesday, 9 March 2005
Page: 116

Senator CONROY (5:35 PM) —The Broadcasting Services Amendment (Anti-Siphoning) Bill 2004 is a short bill which makes a relatively minor amendment to operation of the antisiphoning regime. The bill is important, though, because it gives the Senate an opportunity to examine whether the antisiphoning regime is operating effectively and achieving its intended objectives. As senators would be aware, this legislation was recently the subject of an inquiry by the Environment, Communications, Information Technology and the Arts Legislation Committee. The inquiry was conducted against the background of considerable public concern that the Ashes may not be shown on free-to-air TV. The inquiry raised important issues about whether the regime is operating as intended and whether it is being effectively monitored. I will return to these issues later in my remarks.

Firstly, I would like to talk more generally about the antisiphoning regime and the changes made by this bill. The key operative provision of the antisiphoning scheme is a licence condition which is imposed on all subscription or pay TV broadcasters under schedule 2 of the Broadcasting Services Act. Simply stated, the licence condition provides that pay TV broadcasters are prohibited from acquiring an event that is included on the antisiphoning list unless it has also been acquired by a free-to-air broadcaster.

At present, around one in four Australian households has access to pay television services. The antisiphoning regime was introduced into the Broadcasting Services Act in 1992 to prevent events that had traditionally been shown on free-to-air television from migrating exclusively to pay TV. The current list covers events in 11 sports as well as the Olympics and Commonwealth Games. Iconic events such as the Melbourne Cup, the AFL, the NRL grand finals, test matches and one-day cricket matches involving the Australian cricket team are all included on the list.

The scheme is designed to allow free-to-air broadcasters to purchase rights to listed events free from competition from pay television broadcasters. The objective of the scheme is to maximise the likelihood that listed events will be broadcast on free-to-air television. It is very important to remember, however, that the fact that an event is on the antisiphoning list does not mean that it will be shown on free-to-air television. Free-to-air broadcasters often decide that they do not want to show a listed event. Examples of listed events that free-to-air broadcasters have chosen not to show in recent years include: overseas tours by the Australian cricket team to New Zealand, India and South Africa; and the French Open tennis.

The Broadcasting Services Act contains an automatic delisting process. Events are taken off the antisiphoning list six weeks before they commence if a free-to air broadcaster has not picked up the rights. The minister does have the power to override an automatic delisting if, in the minister’s view, a free-to-air broadcaster has not had a reasonable opportunity to acquire the rights to an event. The only change made by this bill is to extend the time for the automatic delisting of events from six weeks to 12 weeks. The object of this procedural change is to allow pay TV licensees more time to promote and prepare for the broadcast of events that are not taken up by the free-to-air broadcasters. Labor believe that this is a sensible amendment and we will support these provisions. I should, however, probably declare at this stage that I am a subscriber to a pay TV station.

Senator Hill —Which one?

Senator CONROY —Which one? Foxtel. If the free-to-air broadcasters fail to pick up the rights to events that are important enough to be placed—

Senator Hill —That’s Packer, isn’t it?

Senator CONROY —Murdoch—on the antisiphoning list, pay TV broadcasters should be given every opportunity to promote their coverage to the community.

I would now like to talk about some of the other issues that were raised during the Senate inquiry. The key issue was whether there is a loophole in the regime as alleged by free-to-air broadcasters. This debate focused on the implications of the fact that the antisiphoning regime only prevents pay TV licensees, such as Foxtel, from acquiring the rights to events on the antisiphoning list before the free-to-air networks. It does not prevent third parties related to licensees, such as channel providers, from acquiring the rights. This matter of course was the subject of heated debate between the free-to-air and pay TV sectors.

As I stated earlier, the Senate committee hearings took place against the backdrop of public concern that the 2005 Ashes test cricket series would not be shown on free-to-air television. Free-to-air broadcasters contended that the commercial viability of broadcasting the series had been undermined by a loophole in the antisiphoning regime. In the case of the Ashes, Fox Sports, a channel provider to Foxtel, acquired the pay rights from the England and Wales Cricket Board through its agent, a company called Octagon. Free-to-air networks argued that they did not have a reasonable opportunity to acquire the rights before they were sold to Fox Sports. While the free-to-air rights were available, until they were recently purchased by SBS, the free-to-air networks stated that it would not have been commercially viable for them to broadcast the test matches given that they could not obtain exclusive coverage.

The committee heard claim and counterclaim about when the rights to the series were first offered to the free-to-air broadcasters, whether they had the first opportunity to purchase the rights and the reasons why they declined to take the rights on offer. The committee stated in its report that it is not its role to determine the truth of these competing claims. Labor agrees with this conclusion. The job of assessing whether the law was complied with in this case properly resides with the Australian Broadcasting Authority. The ABA told the committee that it had already provided the minister with advice on these issues and that a further report was pending. Labor believes that the minister should release details of the ABA’s findings as a contribution to the debate on the operation of the list.

In assessing whether there is a loophole in the antisiphoning regime, Labor has not relied on the particular facts involved in the Ashes case. As senators are well aware, after considerable public agitation, SBS and Seven eventually acquired the rights to cover the test and one-day matches. Labor applauds the recognition by SBS, Seven and the ABC, the losing bidder for the test rights, that the broadcast of these matches on free-to-air television was in the national interest. One newspaper played a very critical role in this debate and the West Australian newspaper also deserves credit for galvanising a grassroots campaign about this issue. Nevertheless, the fact that the rights were eventually picked up does not, of itself, demonstrate that the scheme is working effectively. The effective operation of the scheme should not depend on a public outcry and/or a campaign by a major newspaper. Labor has focused on the issues of principle behind the scheme. Labor has looked at the fundamental objectives of the scheme and tried to determine whether current practices are undermining them.

It should be noted that debate about the loophole is not new. Evidence received by the Senate committee showed channel providers like Fox Sports have been acquiring the rights to listed events since 1994. Sometimes they have acquired pay TV rights only; on other occasions they have also bought free-to-air rights which were then on-sold. Free-to-air broadcasters have been expressing concern about these practices since 1995. In assessing the case for amendment, Labor focused on examining the original intent of the legislation and the objectives to which it was directed.

Labor agrees with the argument made by the pay TV sector that the regime was never intended to guarantee exclusive coverage for the free-to-air networks of the events included on the antisiphoning list. At the time the first antisiphoning list was released, the then Minister for Communications, Michael Lee, stated:

This is not a list of events that are reserved solely for free to air television. Rather, it is a list of events for which pay TV licensees cannot acquire exclusive rights. It does not mean that these events cannot be broadcast on pay TV.

So there is no question that the list is not meant to guarantee exclusivity. In Labor’s view, however, the list was meant to ensure that the free-to-air broadcasters did get the first opportunity to acquire the rights to listed events. It is this opportunity which is undermined by the loophole.

The explanatory memorandum to the Broadcasting Services (Subscription Television Broadcasting) Amendment Bill 1992, which set up the antisiphoning regime, provides evidence of the original intention of the parliament. The EM states the objective of the regime in the following terms:

This process should ensure, on equity grounds, that Australians will continue to have free access to important events. It will, however, allow subscription television broadcasters to negotiate subsequent rights to provide complementary or more detailed coverage of events.

Labor believes that the reference to subscription TV broadcasters negotiating subsequent rights indicates a clear intention that the free-to-airs should get the first opportunity to bid for listed events. This interpretation was endorsed by the ABA during the Senate committee hearings. At the time he introduced the first antisiphoning list, the then Minister for Communications, Michael Lee, stated:

... free-to-air broadcasters must have the first opportunity to acquire the rights to broadcast. I expect that pay TV will complement and expand the coverage of sport provided by free-to-air television.

Labor believes that when the pay TV regulatory regime commenced in Australia, it was not envisaged that channel providers would be purchasing the rights to sporting events. This may seem strange given that channel providers like ESPN were well established internationally by the early 1990s when the regime was drawn up. However, there are other examples which indicate that the drafters of the legislation thought that pay TV would operate in a similar way to free television. For example, initially the obligation to spend 10 per cent of program expenditure on local drama was imposed on pay TV licensees. In 1999, the government recognised that it is channel providers not licensees who make most of the expenditure on programs. The government subsequently amended the Broadcasting Act to impose the obligation on channel providers.

Labor believes that parliament intended to put free-to-air broadcasters in a privileged position to maximise the chance of listed events being shown free-to-air. This position is undermined if entities that are associated with pay TV licensees acquire the rights to listed events. There is clear potential that the commercial viability of the rights on offer to free-to-air broadcasters could be limited. Labor will therefore move amendments in the committee stage which ensure that the operation regime conforms to the parliament’s intention when the scheme was established.

In the time remaining to me, I would like to briefly canvass a number of other issues which were raised at the Senate inquiry. Representatives of ASTRA argued that the antisiphoning scheme contains a safeguard against third parties denying free-to-airs access to listed events. The minister can refuse to delist a program if any free-to-air network has not had a reasonable opportunity to acquire the rights. ASTRA claimed that this would mean that pay TV licensees would not be able to broadcast the event. The department provided the committee with legal advice which endorsed ASTRA’s position on this issue. However, the effectiveness of the safeguard was challenged by free TV. Free TV submitted legal advice that a pay TV licensee could broadcast listed events without having to acquire them in breach of the act. As the Senate committee report notes, this issue has not been settled. Labor believes that the effectiveness of the minister’s powers should be put beyond doubt. We will move amendments to achieve this objective in the committee stage.

Another issue raised during the Senate committee hearing was the need for effective monitoring of the antisiphoning list. I am a great believer in the ‘use it or lose it’ principle in these matters. If free-to-air networks consistently refuse to show listed events, they should lose their privileged position in relation to the acquisition of the rights. In my view, the application of this principle will maximise the incentive for free-to-air networks to broadcast events on the antisiphoning list. At present, there is no independent, publicly available monitoring of the broadcasting of events on the list. ASTRA does some valuable work in this area, but I think that even they would concede that monitoring the regime should not be their job. The ABA does require free-to-air broadcasters to file returns with it every six months, but neither this information nor the ABA’s analysis is publicly available. Labor urges the government to give consideration to giving the new Australian Communications and Media Authority responsibility for regularly reporting on the scheme.

In concluding my remarks at this stage of the debate, I again indicate that Labor will also support the procedural change in the antisiphoning scheme made by this bill. The extension of the automatic delisting period from six weeks to 12 weeks in no way undermines the key objectives of the scheme. The change should enhance the ability of pay TV broadcasters to promote their products to the community. Labor remains committed to a strong and effective antisiphoning regime. Events of national importance should be available to all Australians, not just those who can afford pay TV. In the committee stage of the bill, we will move amendments to ensure that this continues to be the case. I will leave more detailed comments on those amendments to the committee stage.

I note Minister Coonan has arrived in the chamber. I welcome the announcement today that the minister has reversed her decision to drop the soccer World Cup from the antisiphoning list. I am very pleased to acknowledge that the minister has restored that onto the list where it belongs. It is a national icon and the Socceroos deserve the chance to be viewed by all those Australians who want to watch them when they qualify for the 2006 World Cup and the 2010 World Cup.