Australian Broadcast Summit

Sydney Convention Centre
17 March 2004

The Federal Opposition's perspective
on the
Future of Australian Broadcasting and Media Services

Thank you for the opportunity to address the conference today. We stand now on the edge of a new era in broadcasting as technologies converge and digital becomes a mainstream technology rather than a distant dream.

Many of the old certainties about broadcasting may literally crumble before us over the next decade. Markets will become harder to regulate as media converge. Already the booming popularity of the global Internet is threatening our traditional broadcasting and regulatory realities.

In this environment meetings such as these are absolutely vital. It’s great for regulators and broadcasters alike to take stock and try and determine where our future is taking us. In the broadcasting world there is only one certainty and that is change itself.

The former Minister, Richard Alston, resigned his ministry in September last year so perhaps now is a good time to assess the Government’s performance in broadcasting and some of the challenges for the new Minister, Daryl Williams.

What can we say about Mr Alston’s departure was that it was timely. Mr Alston abandoned ship at a time when his broadcasting and telecommunications policies were coming home to roost.

The Howard Government’s digital television legislation is now firmly in place and we are beginning to get a sense of whether it has been successful or not.

Despite a recent upswing, digital television take-up remains patchy at best. Latest reports are that over 250,000 Australians have digital television capacity. Even with the recent upswing in take up any hope of an analogue switch off at the end of this decade is looking increasingly unlikely.

We also know that, in contrast to the Government’s claims that all areas would have digital television by 2004, some individual regional areas still do not have digital transmission. This is despite some country residents having purchased digital equipment on the assumption that digital transmission would be available by 2004. The ABA and the broadcasters still have some work to do to ensure that some areas of regional Australia do not miss out on a new technology once again.

While Labor has yet to decide its broadcasting policies for the next election it is clear that the existing digital regime has thus far failed to stimulate large scale consumer interest. Furthermore, last year’s axing of the ABC’s digital multi-channels, in response to the Howard Government’s continued funding squeeze, gave consumers just another reason not to covert to digital for now.

The 2000 Productivity Commission Report  into broadcasting, which the Government largely ignored, recommended removing the mandatory high definition quota. It also recommended allowing commercial networks to multi-channel as a means of facilitating greater digital take up and thereby unlocking the potential of digital television.

The mandatory high definition requirement, which soaks up large quantities of digital spectrum, is good for those who are willing to pay large sums of money to get cinema like quality into their lounge rooms. However such people, perhaps not surprisingly, still appear to be in the great minority. Time will tell whether high definition is the way to go.

The Government hardly expressed supreme confidence in high definition when it recently legislated to allow broadcasters to annualise their quotas rather than meet a weekly 20 hour quota. Some consumers who bought expensive high definition television sets on the presumption they would be guaranteed weekly feeds may rightfully feel ripped off.

The ban on free to air commercial television multi-channelling may become increasingly disadvantageous for free to air broadcasters as they struggle to compete with the newly digitised Foxtel and its 100 plus channels. Some culd argue that Foxtel are stealing a break from free-to-air television in the rush to digital!

Given the apparent failure of Senator Alston’s digital regime we await with great interest Minister Williams’ policy initiatives in this area. Minister Williams has much work on his hands to get the average punter interested in digital television and thus quicken digital uptake. Labor will not rescind from this challenge as we approach the next election.

Another issue of great concern to Labor is media diversity. Labor supports media diversity because we believe it is good for democracy. While we don’t begrudge media companies the opportunity to grow we don’t want a situation developing in Australia where two or three media outlets dominate most of our commercial news and opinion making.

Labor opposes the Government’s Broadcasting Services Amendment Bill which significantly eases the current restrictions on cross-media ownership in Australia. We note that the Government is again putting the Bill to a vote in the Senate in a few weeks time. Labor will again oppose the Bill.

Labor believes the Bill in its current form will allow the formation of even more dominant media companies than is presently the case. By allowing joint ownership of television and newspapers in major cities a large newspaper proprietor could purchase a television station and vice versa. The number of large media groups would shrink accordingly as would the diversity of news and opinion making in Australia.

Labor has stated that it is mostly comfortable with easing foreign ownership restrictions as this would allow more competitors into our market and probably increase media diversity, as would a fourth television licence.  Labor believes this issue needs to be sorted out before our media ownership laws are changed. This is for the self evident reason that a fourth television licence would add more diversity of ownership into our media market.

However, we would still like to see adequate safeguards in place for local news reporting, Australian foreign news bureaux and the like. The Government has not recognised this concern as yet.

Labor believes the Government is putting the horse before the cart with cross media ownership. Yes; the media is changing, as evidenced by the relatively slow take up of digital television and Pay-Television, but the media hasn’t changed radically just yet.

Most Australians still get their national news and opinion from the same sources they got it from ten years ago: the three commercial networks, the public broadcasters, the one or two major newspapers and the one or two talk radio stations in each state. Labor recognises that media ownership laws will have to change as the media changes but we dispute that this has yet occurred in a substantial way: the incumbent dominant media has worked hard to preserve their place.

While many Australians do use the Internet for news gathering most Australian Internet news is produced by our existing media groups. Fairfax, PBL and the ABC all have popular news websites which simply replicates or closely resembles news from their established outlets.

In summary Labor will not support any changes to our media ownership laws which will significantly reduce the diversity of media ownership in Australia. Diversity of media ownership is just too important for our democracy. The Government should give up on this Bill as it appears a majority of the Senate agree with us - again.

One of former Minister Alston’s great policy failures was in regards to the Government’s anti-siphoning, or sports broadcasting, regime. The then Minister Alston received a report from the ABA on this issue in 2001. To the Opposition’s knowledge the Government still hasn’t responded to that report.

Labor supports measures to ensure that all of our premium sporting events are broadcast on free-to-air television. But we also support industry certainty for pay-TV and free-to-air networks. The current stand-off on anti-siphoning is good for no-one. The Government has had the ABA’s report for several years and has failed to come up with a coherent policy statement in this area. Minister Williams now has an opportunity to see if he can finally get this report out of the Ministerial in-tray. However, around six months into his ministry the signs are not good.

Another report that the former Minister failed to respond properly to is the ACCC’s June 2003 Report into Emerging Market Structures in the Communications Sector. As with the 2000 Productivity Commission Broadcasting Report the Government appears set to largely ignore this important Report’s recommendations.

In relation to the ACCC-approved content-sharing deal,  which led to Telstra bundling with Foxtel products, this was supposed to lead to alternative infrastructure providers being able to find a way to build a commercial model around piping out Foxtel content.  Given that Neighbourhood Cable has been unable to secure commercial terms, it is yet to be seen whether the ACCC has any will or capacity to act.

Senator Alston dismissed the recommendation regarding Telstra divesting itself of its interest in Foxtel before the ink had even dried on the report. While Labor is yet to be convinced that Telstra should divest itself of its HFC cable that carries Foxtel, we think there are good and strong arguments for Telstra getting out of the Foxtel media business itself.

Forgetting about the ownership of Foxtel for one minute, Labor congratulates Foxtel on the launch of its digital platform just this week. Labor supported the amendments to the Telecommunications Act which led to the current Foxtel digital access regime and we look forward to seeing how this regime works in practice. We want the new regime to provide reasonable access to Foxtel’s network. If that access is not reasonably provided for the issue may need to be revisited.

Another issue I wanted to touch on today was public broadcasting. Public broadcasting is a sector that Labor obviously supports strongly. But the Government has launched an all-out war on the ABC which was carried out with much enthusiasm by the former Minister, Richard Alston.

Having slashed the ABC’s budget by around $50 million soon after gaining office, the Howard Government then went and stacked its board with Liberal Party mates.

A further strategy of the Coalition has been to intimidate the ABC into compliant reporting by levelling allegations of bias against the ABC. This was done by none other than former Minister Richard Alston who levelled a series of complaints against the Walkley award winning journalist, Linda Mottram, for her coverage of the Iraqi conflict. Ms Mottram one of the ABC’s most respected journalists but her analysis of the Iraqi war appeared to have been just too independent for this Government.

The kick-the-ABC ball has now been passed directly to the Queensland Liberal Senator, Santo Santoro. Senator Santoro now delights in using Senate Estimates as a forum for asking endless questions about alleged ABC bias. Estimates is usually a forum where the Opposition questions Government agencies. Not so with the Howard Government, where every forum available for attacking the ABC is used to its maximum potential.

In a separate development the ABA has now decided its entire board will investigate Senator Alston’s ABC bias complaints which were referred to the ABA. This is a rather amazing development because Richard Alston and the Howard Government appointed almost all of the ABA Board. The ABA apparently feels there is no conflict of interest here. How anyone will take their findings seriously under this scenario is beyond me.

The slashing of ABC funds, the stacking of the ABC board, and the criticism of ABC programming has all been designed to turn the ABC from a fearless public broadcaster into a compliant Government lapdog. Labor’s great fear is that this campaign may now be working.

The ABC just doesn’t do itself any favours when it cuts hugely popular and cheap-to-make educational programs like Behind the News, while at the same time introducing the now ubiquitous 'lifestyle' programs. It does itself no favours when it makes Sydney-centric decisions to centralise sports reporting in Ultimo while ignoring massive protests against such moves, particularly in AFL-mad Melbourne. While, as a rule, politicians shouldn’t comment on ABC programming decisions, some of these decisions do seem very hard to fathom.  This one seems to run counter-strategy to the ABC's effort to regionalise content.

This decision to create a so-called 'national' sports bulletin was exposed as a farce when questioning in Senate estimates showed that Western Australia was not included.  Perhaps this was just lucky for them and was, according to the ABC, related to time zones.

Labor wants to restore the integrity of the ABC. We want it again to be a fearless independent quality national broadcaster. Labor’s first policy to achieve this has already been announced. Labor will be reforming the board appointment process to ensure an arms-length short-listing process. This will effectively end the appointment of political hacks to the ABC Board.  Labor will announce our funding policies for the ABC after the budget and before the next election.

Another issue I wanted to talk about today was local content under the Free Trade Agreement. There is no doubt that uncertainty is rife about the impact of the deal on the broadcasting and film and television sectors, particularly in the next five-to-ten years. This issue relates directly to my Arts portfolio and I would like to share Labor’s concerns about the deal with you.

This uncertainty surrounding the AUSFTA deal in the cultural sector has been born out of the Howard Government’s failure to obtain a broad reservation for the cultural sector. This is a position which has the potential of threatening the future success of the Australian Film and Television Industry.

Labor consistently argued for an exclusion clause for the cultural sector. An exclusion clause would have ensured that the Australian Government could continue to regulate and subsidise these industries. It would have ensured we had the flexibility to increase local content quotas across all platforms, existing and emergent. 

The Government claims that they have retained this ability, and to some limited extent they have. But Labor and indeed many in the industry believe that the Howard Government’s position has the potential to be highly restrictive. The agreement also appears to have locked in expenditure levels equivalent to some of the lowest in the developed world.

Of particular concern is the Howard Government’s silence on the inclusion of a ‘ratchet’ clause. Local content on commercial free to air television is currently capped at 55% during prime time. The ‘ratchet’ clause effectively means that any reduction in local content quotas by an Australian Government cannot be reversed unless an agreement is reached with the United States. For instance if a decision is made to reduce local content quotas to 45% and in future it is decided this policy was unsuccessful it will be impossible to then return the local content quota to 55% without US consent. Any action such as this would be ruled as ‘restrictive’ and therefore, not permitted under AUSFTA.

Labor is also very concerned that the caps now placed on expenditure for local content on most subscription services (Pay TV) may never rise above 10%.  If the Government at any time wishes to increase this quota on drama channels to a new maximum of only 20% over time, they will have to 'consult' with the United States. It also appears that any US interest may object to any outcome arising from these consultations and take legal action.  Once again it will be a question of which party has deeper pockets.

The Screen Producer’s Association of Australia has publicly stated their concern about the measures agreed to on Pay TV stating that:

“The caps on expenditures on Australian adult drama (at 20%) and children’s, documentary, arts and education channel (10%) will be the lowest in the developed world and take no account of the future potential of the digital Pay TV platform in this country, particularly as the television market fragments with digital take-up.  We have verified that the current 10% Australian drama spend requirement only amounts to 3.8% of total transmission time.”

In the free to air digital multi-channelling environment the Government has agreed to a position which may see up to 80% of channels free of local content regulation.  Local content therefore may be restricted to no more than two channels or 20% of the total number of channels (whichever is greater) but no more than three channels.  While some may argue the total amount of Australian content may remain the same the overall percentage of Australian content will certainly diminish if there are a large number of multi-channels per broadcaster.

In the area of ‘interactive’ new media, the deal states that if the Australian government finds that Australian consumers are being unreasonably denied access to programming on interactive audio and/or video that the government may seek to introduce remedial regulatory measures through a transparent process - providing we permit the United States as an ‘affected’ party to participate in this process. The provision of local content standards to future non-interactive media technologies remains unclear.

We have only just scraped the surface on what the AUSFTA means to the audiovisual sector.  At best, the deal may well have a negative long term affect on Australia’s ability to regulate for appropriate levels of local content.  At worst, Australia may be prevented from making law in this area.

The Howard Government appears to have failed to include many important mechanisms to ensure the growth of Australian film and television, and our ability to ensure that Australian voices and Australian stories are heard by all Australians. Labor will examine these provisions very carefully in the Senate Inquiry into the AUSFTA deal as we determine our overall final position on the free trade agreement.

I know that now is a challenging and dynamic time for all broadcasters. There are many important areas today that I haven’t touched on due to time constraints—areas like digital radio, SBS, and public and indigenous broadcasting. These are areas where much work also needs to be done.

Labor is getting on with the business of policy development in the broadcasting area and I know the Shadow Minister, Lindsay Tanner, is keen to continue dialogue with you all as we finalise our policies in the lead up to the next election. I should point out that I am deputising for Mr Tanner today and may not be in a position to answer all the questions that are put to me. None the less I will endeavour to ensure that any questions I cannot answer are passed on to Mr Tanner. Thank you again for the opportunity today to address this conference.