BACK TO: Information
Technology
Broadcasting Services Amendment
(Digital Television and Datacasting) Bill 2000
Second Reading Debate
22 June 2000
Senator LUNDY (Australian Capital Territory) (6.27 p.m.)
Datacasting - its definition was always going to be the next watershed
for the Coalition's digital television legislation. It is a word that will, from now on,
epitomise the sycophantic relationship between the coalition and the incumbent
broadcasters in Australia. After all, this bill, the Broadcasting Services Amendment
(Digital Television and Datacasting) Bill 2000, was constructed with the aim of protecting
the interests of incumbent broadcasters.
Once all the rhetoric has been stripped away, this bill is little more
than an elaborate barrier to entry for potential new digital content producers. I would
like to look at the evidence of this.
This bill is the second tranche of legislation designed to put the
datacasting flesh on the spectrum bones of a flawed piece of legislation passed back in
1998 for which the espoused vision-and that vision is supported by Labor-is very distant
from the model we have before us in this chamber. The digital television act was passed
with some amendments forced upon the Government by Labor when we very quickly came to
understand the deep implications of the collaboration between the free-to-air broadcasters
and the Government. The original sin lay in the presentation of this massive spectrum deal
that saw free-to-airs handed a gift of seven megahertz of digital spectrum. This was
presented as a means to encourage the ubiquitous take-up of HDTV by Australians by
enabling the broadcasters to upgrade their technology.
This, we were told, was a good thing. A good thing according to whom?
The proponents of the deal, of course-the Federation of Australian Commercial
Broadcasters. Labor's early interest in this proposal soon became jaded as it became clear
that the assumptions that the coalition had relied upon to justify the deal were false
and, in some cases, completely indefensible. For example, the merits of high definition
television were quickly challenged.
Other jurisdictions which had attempted to legislate the mandatory
introduction of new technology like HDTV had failed. The consumer interest was not only
not there but demonstrably absent. High definition TV sets cost a lot of money. Who would
be able to buy one, even if anyone wanted to?
By the time the issue of standard definition digital TV was circulating
it was patently clear to those with even just a casual interest in media policy that the
fix was on. This legislation had been constructed with one primary purpose in mind, and
one only: to create a barrier for potential competitors to prevent them entering into
competition with the incumbent media interests in existing and future digital content
markets. The free-to-airs got what they wanted: they secured their subsidy for digital
conversion in the free spectrum and got enough of it so there would not be much left for
anybody else.
But this spectrum lock-up was only the first element in creating a
barrier to entry for potential competitors. Destroying the viability of independent
datacasting offerings was the second element. This barrier has been built by the Coalition
by pursuing a datacasting definition so tight that creating a viable business model became
really difficult for new entrants.
I almost forgot: another potential competitor is the ABC. It is as
though the free-to-airs had to think long and hard about dealing with them. The ABC and
SBS were already in the market, so a barrier was no good. The alternative was to pretend
the ABC's potential ability to compete was an unfair advantage-a spurious argument with
which Minister Alston concurred; hence the ability for public broadcasters to multichannel
has now been removed from the government bill. This was a bit of a moot point anyway, as
the ABC have been consistently attacked by the Coalition, and their ability to serve the
content demands of a meaningful multichannel service required resources in the form of
funding, which was not likely to be forthcoming from a coalition budget.
Even so, it would be no good for the free-to-airs for the ABC or SBS to
excel and push the quality bar up another notch. So a bit of a management reshuffle was
called for, leading to significant restructuring and loss of expertise from within the
organisation-all executed efficiently by Senator Alston and his mates on the ABC board.
All of these points demonstrate that this bill is little more than an elaborate barrier to
entry for potential new digital content producers.
What are the citizens of Australia, as consumers of the media, going to
miss out on if the coalition get their way and the Labor amendments fail? Who is being
locked out? Who is being barred from entering this market space? Why is it so important?
These are all critical questions that need to be answered. They are questions the
Coalition have deliberately ignored. To even attempt to answer them would expose their
disregard for the public interest with respect to media policy, cultural policy and
industry policy, just to name a few.
The public policy motivation behind cross-media laws is to promote
quality diverse content. Because the digital TV legislation and datacasting bill creates
barriers to entry for potential new entrants, by definition this bill is in conflict with
the public policy aspiration that underpins existing media laws. Concern expressed by the
various incumbent interests that a further concentration of media ownership would result
from an open definition of datacasting rings hollow, especially when no party, including
the Government, has gone so far as to suggest that datacasting itself take a place in the
matrix of cross-media restrictions. Regardless of the merit of this proposition, this is
further evidence that public policy motivations behind the Coalition bill have little to
do with what is best for Australia. The Coalition is seen to be merely dancing to the tune
whistled by the free-to-airs.
The cultural implications are significant too. The ability for
Australia to produce home-grown digital content is critical to how we reflect upon
ourselves as a society. For the same reasons there is merit in maintaining certain
percentages of Australian produced content in the traditional media, it is critical that
we enhance our ability as a nation to produce quality content. In fact, the policy
imperative to create an industry environment conducive to producing the best digital
content we can is even stronger than for the traditional media. Why? Because we cannot
legislate minimum Australian quotas on the Internet. We cannot do that any more than we
can legislate to restrict content or censor content on the Internet.
With datacasting services deliverable across the Internet and Internet
content producers holding strong aspirations to be datacasters across spectrum, the
innovators and entrepreneurs who will drive the production of Australian digital content
are watching their future unravel as this debate proceeds. Will there be a future in
Australia for them? Will there be opportunities worthy of investment? Only if we develop
the alternative framework that Labor is suggesting through our amendments. Only if we
reject the Government's model for datacasting.
This bill restricts the opportunity for the growth of quality diverse
content in Australia. The Internet Industry Association has stated that they have grave
concerns that the coalition policy of artificially constraining datacasting by narrowing
the range of content datacasters can deliver will undermine the business case for
investment in both content development and delivery by potential competitors to
free-to-air broadcasters. The IIA is correct in its assessment that this bill will
suffocate the nascent industry in digital content production and delivery over spectrum.
With Australia already demonstrating a high level of expertise in
digital content production, the opportunity exists to continue to develop this critical
industry sector. Recently, however, it was estimated by Morgan and Banks that Australia
was losing about 1,000 people per month in the IT&T sector alone. I cannot help but
wonder how many more of our innovators, enthusiasts and experts aspiring for a career in
digital content industries will turn their backs on Australia in disgust at this latest
attempt by the coalition to cut their dreams to shreds.
In the midst of this damning reality we continue to hear empty rhetoric
emanating from Minister Alston, who espouses the virtues of investment in information and
communication technologies. We see a coalition happy to launch, amidst great fanfare,
their Building IT Strengths program, much of which has been geared towards encouraging the
very entrepreneurs that are positioned to grow their businesses around digital or Internet
content. It is these innovators who will see their futures limited by the passage of this
bill. There is no consistency from this government. There is no understanding of the
digital economy, the information society. The Coalition-with their Minister for IT at the
helm of this sinking ship, this backward looking vehicle that they have-are taking
Australia backwards.
It is interesting to have watched the conduct of Fairfax throughout
this debate. Early dissidents, over time they have come to see themselves as having their
own incumbent interests and have changed their conduct from time to time. Their recent
withdrawal from the datacasting trials tells me that they have been too clever by half.
Fairfax appeared to have the strongest business case and they were intending to invest in
a comprehensive datacast offering. Why did they go silent in the midst of the debate? If
there was some sort of deal or promise it must are been reneged upon. Whatever the
motivation, the chief executive, Fred Hilmer, has chosen to cite the reason now as
follows:
The bill as it stands today will not permit us to proceed with a viable
datacasting service on a commercial basis.
With OzEmail having pulled out a while ago, Telstra announcing their
withdrawal at the eleventh hour and News Ltd not even looking interested, a very clear
message is being sent to the coalition. As if this was not enough of a debacle, there was
another major shock to the industry to come. In his second reading speech the minister
implied that there was a possibility that Internet services, such as streamed video, would
be defined as a broadcasting service under the law. The mechanism to determine this, so
the minister said, is a review over the next 12 months by the ABA. What concerns me is
that the Minister has form on this, as does the ABA.
The industry is absolutely correct in slamming the concept of this
proposal. It reeks of yet another barrier to entry being built-only this time why just
bury the local opposition, why not take on the world? Internet content-if it is a streamed
content-regardless of whether it is delivered across a PC or through a set-top box to a
TV, will be assessed as to whether it is subject to the provisions of the Broadcasting
Services Act. It is as though someone showed someone else higher up in a media
organisation a video downloaded from the web over some fat piece of pipe. I can see it
now: they said, `We cannot have that. It could be more interesting than Who Wants to be a
Millionaire. Let's kill it. What options are available?' This is of course utterly
ludicrous, but so was censoring the Internet. As I said, the ABA has form on this, under
the instruction of the Coalition.
If this were to proceed-and I am not surprised that the industry is
concerned, given the way that the Minister has conducted himself on matters relating to
Internet content in the past-Australia will once again be seen as the Luddite in a
changing world. Already this country is perceived as the global village idiot as a result
of ignorant attempts by the coalition to censor a global medium: the Internet. Surely
there is one person in the Coalition prepared to stand up and acknowledge how damaging it
is to even imply that the Australian government would consider defining streamed Internet
content as a broadcast service for the purposes of applying regulatory restrictions-surely
there is at least one person. The network's aim is set firmly on making sure that the only
digital content to reach Australian homes is their content. Is Australia to be the only
nation whose Internet experience is the corralled content prepared by Channel 9? Are we to
be a nation where the Internet is subject to content restriction by virtue of the dumb
terminal approach? Is the Internet experience of the future to be governed by the few to
the detriment of the many? As we already suffer an appalling reputation, as I said, for
many this bill would be seen as the last straw.
One other point: the blatancy of the Government's collaboration with
the incumbent interests was demonstrated, I believe, unequivocally, in a change that
appeared only in the latest draft of the bill before us today. The expansion of the
enhancements that the free-to-air broadcasters are allowed to offer was the final twist
that showed greed was truly behind those incumbent interests; interests that were not just
satisfied with creating barriers to entry but, having succeeded in closing them through
this bill, sought to open a few more of their own doors. It is almost as though the
incumbent broadcasters realised just in time that they had been so successful-if this bill
is successful-in their collaboration with the Coalition to restrict the definition of
`datacasting' that they were left with little opportunity to make something of the new
digital service offerings themselves. Indeed they are suggesting now that they could
actually boost their program appeal through the enhanced services and hopefully up their
ratings, improve their profits and gain all the other benefits that go with having market
domination.
I cannot help reflecting, however, how different this debate would be
if the media incumbents had just a little vision. What if they had determined years ago,
as converging technologies leapt ahead in their development, that it was in their best
interest to build a business case for their entry into the converging digital world? The
presence of traditional media corporations leading with their technological aspirations
would have meant that market pressures could indeed have been the factors to push up the
standard and quality of diverse content in Australia. I know there are some who hold such
a vision and I also know that most of those people have been marginalised in this debate.
In other markets, media companies are fighting to be involved in
digital delivery, not just across the Internet but across the range of devices available
now and available soon in the marketplace. Whereas other jurisdictions are experiencing
intense competition as traditional media grasp the significance of digital convergence and
re-engineer their businesses accordingly, the local incumbents put their binoculars down,
lean back in their chairs, whistle the minister over and say, `Can you fix it for me,
mate?' The responsibility for the damage inflicted upon Australia lies with the Coalition
Government. The winners are those who already have wealth, power and influence and the
losers are just about everybody else. The citizens of Australia expect more than they are
getting from a Coalition Government that is prepared to trade on culture, dignity and
fairness-and for what? Who knows? Unfortunately I think we will all know soon enough.
I would like to close with some comments about standards. Among many
other amendments that you have heard articulated by my colleagues tonight where Labor will
be moving to try and rectify some of the damage that this bill in its current form will
wreak upon Australia's future opportunities, Labor will also be moving an amendment to
make the regulation of the set-top box standards a disallowable instrument to allow a
level of parliamentary scrutiny. This will be necessary because there lies in the
determination of this standard another potential barrier to entry that could prevent new
entrants to the digital content market. The legislative determination of technologies is
always treacherous ground, and the stakes will be high. Just as my colleagues have
foreshadowed, the next part of the debate will no doubt be the next level or the next
watershed in the sorry saga of this legislation.
And what about the demand for HDTV that I referred to earlier? The
recent Senate committee heard acknowledged, in an astounding admission from the
free-to-air representative, Mr Brannigan, how flimsy the case for high definition
television was. He acknowledged that it may take a long time for high definition
television to catch on in Australia. With the US situation showing less than 10,000 high
definition television sets having been purchased since their introduction a year ago, the
signs are all bad. For consumers, it is not just a question of finding an estimated
$12,000 or, as we have heard tonight, perhaps up to $15,000 or $20,000 to purchase the
set, but also what incentive there will be to purchase such a set. Mr Brannigan stated
that five years was a likely time frame for HDTV to catch on. This means that, even if you
did buy one of these expensive sets, you would not have much content produced in high
definition format in order to reap the full benefit anyway.
The inclusion of standard definition TV gives an out to the
free-to-airs from having to invest in the early production of high definition product.
Whilst giving some flexibility to consumers, in the wake of Mr Brannigan's comments, SDTV
is as good as it is likely to get. The only reasonable interpretation is that even Mr
Brannigan is finding it difficult to conceal the agenda behind this bill. It is, as I have
contended throughout my contribution this evening, about creating barriers to entry. The
UK have discovered the hard way that consumers want multichannelling and have little
interest in high definition TV. This is consistent with the pattern emerging in the US.
For example, recently a Chicago based network announced it was
abandoning HDTV in favour of multichannelling. With the lessons of others in mind, it is
my call that Australia will not see HDTV as a meaningful or affordable service available
to consumers. Instead, we will see the free-to-airs attempt to blame consumers for failing
to demand the service and collapsing their business case for HDTV. Wouldn't that be a big
surprise-not! This will give rise to a call from the free-to-airs to the government of the
day to allow multichannelling so that their massive investment, both public and private,
in digital conversion was not all in vain.
I often wonder if the Coalition Ministers were just dense. I wonder
whether they were so out of touch and so ignorant of the implications of the future of
digital content production in Australia that it did not cross their minds that they might
be killing off one of our greatest global export offerings. Worse still, and sadly, this
is probably the level of analysis: that is, the cabinet saw not an opportunity for global
expansion and hope and decent aspiration but the opportunity for a friendly beer with
Kerry-not to mention many a good news story-and they just went for it.
