Bills Digest no. 61 2014–15

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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Dr Rhonda Jolly
Social Policy Section 
2 December 2014

 

Contents

The Bills Digest at a glance

Purpose of the Bill

Structure of the Bill

Background

Committee consideration

Position of major interest groups

Policy position of non-government parties/independents

Financial implications

Statement of Compatibility with Human Rights

Key issues and provisions

Concluding comments

Appendix B: ownership and control of commercial radio services

 

Date introduced:  22 October 2014

House:  House of Representatives

Portfolio:  Communications

Commencement:  Sections 1–3 on Royal Assent; Schedule 1 on the day after Royal Assent; Schedule 2 on the later of either 1 January 2015 or the day the Act receives Royal Assent; Schedules 3–9 on the day after the Act receives Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

 

The Bills Digest at a glance

Purpose of the Bill

The purpose of the Broadcasting and Other Legislation Amendment (Deregulation) Bill 2014 (the Bill) is to amend the Broadcasting Services Act 1992 (the BSA), the Radiocommunications Act 1992 (the Radcomms Act) and the Australian Communications and Media Authority Act 2005 (the ACMA Act) to implement industry‑preferred changes in the Communications portfolio.

The Bill intends to amend or remove provisions in the BSA which were associated with the simulcast of analogue and digital television signals in the transition to digital broadcasting and the restack of spectrum which commenced after the last analogue signal was switched off (see explanation of spectrum later in this Digest). Provisions will also amend the framework used by the Australian Communications and Media Authority (ACMA) to plan the broadcasting services band spectrum by removing requirements in the BSA and the Radcomms Act which are considered no longer necessary.

In addition, the Bill proposes to:

• remove the requirements for free-to-air broadcasters to report annually on compliance with obligations which require them to provide captioning of programs to assist vision and hearing impaired consumers with access to electronic media and to replace these obligations with a complaints-based assessment process
• change aspects of captioning target obligations for subscription television and the assessment of quality of captioning of live and pre-recorded broadcasts for free-to-air and subscription broadcasters
• remove the requirement for reports made to ACMA under the New Eligible Drama Expenditure Scheme to be independently audited
• remove the requirement that ACMA reviews industry codes of practice
• amend the process by which calculation of media diversity points is made in some commercial radio licence areas and to introduce grandfathering provisions for commercial broadcasting licences which would be in breach of the statutory provisions on control as a result of fluctuations in population and
• make consequential amendments to Schedule 4 of the BSA as a result of the changes to the Acts Interpretation Act 1901.

Structure of the Bill

The Bill consists of nine Schedules which reflect the intended changes outlined above.

Background

The Government has committed to boosting productivity by reducing the cost to Australian business of red and green tape. The Communications portfolio has been identified as a particular target for reform as it is seen as subject to substantial levels of complex regulation. The Government has stated that the changes in this Bill will remove some onerous requirements on the industry, streamline and simplify legislation and save time and money for broadcasters and subscription television licensees.

Stakeholder concerns

The Government has observed that proposed changes in the Bill are industry-preferred; they have been introduced as the result of consultation with the industry.

Other stakeholders have yet to make detailed comments on the specific changes in this Bill as it has been sent to a Senate Committee for inquiry. Submissions to the inquiry do not close until 10 December 2014. However, vision and hearing impaired groups have expressed concern that changes to captioning requirements will reduce the quality and quantity of services provided. Past criticisms of changes to local content and media ownership and diversity legislation indicates that there are likely to be concerns raised in submissions to the Senate inquiry about the extent to which the proposed provisions will reduce services and diminish media voices.

Key issues

Industry stakeholders have consistently put the argument to governments that there is a need to reduce the regulation which applies to subscription television licensees and the radio and television broadcasting sector. This Bill responds to some of these demands by reducing reporting and administrative arrangements to the extent indicated in the sections above.

Consumers have argued that broadcasters and subscription licensees seek to change existing requirements in order to reduce their responsibilities in providing services to customers and ensure greater profitability. While consumers have made little direct comment on this particular Bill, the issues raised by a number of its provisions have been discussed in detail elsewhere, and have been noted above.[1]

Purpose of the Bill

The purpose of this Bill is to amend the BSA, the Radcomms Act and the ACMA Act to implement industry‑preferred changes for the Communications portfolio identified by the Government through various consultation processes. These measures will:

• amend or remove provisions in Schedule 4 of the BSA which were associated with the simulcast of analogue and digital television signals in the transition to digital broadcasting period and the restack of spectrum period, which commenced after the last analogue signal was switched off in December 2013[2]
• amend the framework used by ACMA to plan the broadcasting services band spectrum by removing certain requirements in the BSA and the Radcomms Act which are considered no longer necessary[3]
• remove the requirements for free-to-air broadcasters to report annually on compliance with captioning obligations and replace these obligations with a complaints-based assessment process
• introduce certain flexibilities in the requirements for meeting captioning targets for subscription television and for assessing the quality of live and pre-recorded broadcasts for free-to-air and subscription broadcasters
• remove the requirement for reports made to ACMA under the New Eligible Drama Expenditure Scheme to be independently audited
• no longer require ACMA to review industry codes of practice
• amend the process by which calculation of media diversity points is made in overlapping commercial radio licence areas
• introduce grandfathering provisions for commercial broadcasting licences which would be in breach of the statutory provisions on control as a result of fluctuations in population and
• make consequential amendments to Schedule 4 of the BSA as a result of the changes to the Acts Interpretation Act 1901.

Structure of the Bill

This Bill consists of nine Schedules. These deal with:

• Schedule 1: ACMA’s planning powers
• Schedule 2: digital switchover and spectrum re-stacking
• Schedule 3: eligible drama program expenditure audits
• Schedule 4: review of codes of practice
• Schedule 5: directorship notifications
• Schedule 6: captioning
• Schedule 7: media diversity points for commercial radio
• Schedule 8: licence area population change and
• Schedule 9: references to legislative instruments.

Background

The Abbott Government declared in March 2014 that it was committed to boosting productivity by reducing the cost to Australian businesses of red and green tape.[4] In announcing its first ‘Omnibus Repeal Day’ it vowed to repeal over 10,000 pieces of legislation and regulations which it labelled as unnecessary and counter-productive, and to remove more than ‘50,000 pages of unnecessary and costly legislation and regulations that are a dead weight on Australian businesses, community groups and households’.[5]

The Communications portfolio was earlier identified as a particular target for reform. Prior to the Prime Minister’s announcement, the Department of Communications had released a consultation paper which declared its intention to reduce regulations governing the sector.[6] According to this paper, published in November 2013, the sector was subject to substantial levels of complex regulation which went beyond market design and technical regulation. The paper noted the important role broadcasting has played in nation-building, but suggested that it was time to assess whether the current communications regulatory framework remained appropriate in the modern communications environment where ‘new services and sectors compete with traditional brands for advertising and erode audiences’.[7]

At the same time, the paper identified what it labelled ‘enduring public policy concepts’ which need to be considered in the context of reviewing communications regulation.[8] These concepts were:

• there should be ‘a diversity of major sources of information and perspectives expressed in the public sphere to provide and sustain an informed citizenry and healthy democracy. It was equally important that this information be fair, accurate and transparent’
• Australians should be able to experience Australian voices and stories
• services should reflect community standards and meet community needs
• users should be provided with effective and accessible avenues of complaint and redress
• resources should be allocated efficiently so that a minimum level of services is available to all and
• communications should reflect the national interest.[9]

As the Departmental paper implied in summary, adhering to these enduring concepts in effect means that communications policy and regulation needs, at the bottom line, to work in the public interest.

A further discussion paper released by the Department in March 2014 discussed the strengths and weaknesses of the three dominant styles of regulatory intervention in communications regulation—black letter law, co‑regulation and self‐regulation.[10] The second discussion paper made a number of observations. With regards to black letter law, for example, it commented that it may be more appropriate in certain instances to introduce objective-based obligations which could be more adaptable and better keep pace with developments in the sector.[11] In discussing co-regulation, the paper noted its strengths, ‘not least of which is the strong role of industry in developing codes that are workable, reflect industry reality and minimise costs while retaining “last‑resort” regulatory sanctions’.[12]

The paper stated that ‘it may be that a small number of rules‐based obligations would be more appropriate in some areas and greater use of self‐regulation in others in the complex and ever‐changing communications sector’.[13] However, not surprisingly in the context of the Government’s deregulation agenda, the most significant conclusion reached in this paper was:

… there would be significant value in the communications industry further considering whether current regulatory arrangements could make greater use of pure self‐regulatory models. There may be particular issues which can move to self‐regulation—particularly those where there are strong incentives for compliance already embedded in the market structure. There may also be benefit, in a mature industry, of greater use of self‐regulatory schemes which puts the responsibility for performance firmly with the industry. Government’s only role in these arrangements would be to ensure any problems with arrangements can be detected and verified early.[14]

The Minister for Communications, Malcolm Turnbull, sought feedback from industry stakeholders on the idea of a more self-regulatory model across the communications sector.[15] Advice from these stakeholders has formed the basis for a number of the specific deregulatory changes to legislation which this Bill proposes.               

Committee consideration

On 30 October 2014 the Selection of Bills Committee recommended that this Bill was referred immediately to the Senate Environment and Communications Legislation Committee for inquiry and report by 9 February 2015. Details of the inquiry are at the inquiry webpage.[16]

The Selection of Bills Committee gave the following reasons for referral:

The removal of auditing requirements for Australian content has the potential to have a significant impact on the amount of Australian content in the local broadcast media landscape. In addition, there are concerns over the legislation's change to captioning requirements. Both these factors have the potential to affect the viewing experience of Australian television content for local audiences.

The Selection of Bills Committee believed possible submissions or evidence could be received from:

• television stations
• consumer groups
• user groups of captioning services and
• media diversity and competition academics.[17]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills has sought further information from the Minister for Communications on one aspect of the Bill.[18] This issue is addressed in the discussion of Schedule 4 of the Bill in the ‘Key issues and provisions’, below.

Parliamentary Joint Committee on Human Rights

In its November 2014 report the Parliamentary Joint Committee on Human Rights noted that it had deferred consideration of this Bill.[19]

Position of major interest groups

Industry

Industry interest groups are overwhelmingly in favour of reducing regulation in the broadcasting and subscription television sectors.

The free-to-air television lobby group, Free TV, in its submission to the National Commission of Audit, claimed that free-to-air broadcasters were subject to a considerable number of reporting requirements including those that were unnecessary or had substantial penalties for non-compliance.[20] Free TV called for the streamlining of reporting requirements and the introduction of what it called ‘spot-audits’. It listed a number of areas in which it considered regulations could be made less onerous. It cited areas which are directly relevant to this Bill—providing an annual report regarding directors and persons in a position to control broadcasting licences and reporting annually on compliance with captioning quotas and standards. Free TV also complained indirectly about codes of practice processes which require review every three years and a process of public consultation as part of that review.[21]

The Australian Subscription Television and Radio Association (ASTRA) complained to the NCoA:

… nearly 30 channels are reported to the ACMA by a number of different channel providers, and licensees are required to lodge an additional licensee return. Each channel provider and licensee must engage an auditor at their cost to verify the returns before lodgement. Data collection and preparation of returns is time consuming and costly, with auditing costs being up to $15,000 per year for some licensees.[22]

ASTRA wanted the minimum Australian content expenditure requirements replaced with an incentive-based scheme.

Consumers

Almost immediately after this Bill was presented in Parliament, Deaf Australia, the Deafness Forum of Australia, the Australian Communications Consumer Action Network (ACCAN), the Australian Federation of Disability Organisations (AFDO) and Media Access Australia (MAA) released a statement condemning its proposed changes to captioning as ‘a retrograde step which has been undertaken without proper consumer consultation’.[23] The groups considered that if enacted the Bill would ‘wind back consumer protection’. The groups called for the Bill to be withdrawn and a consultation process on the issues it raised to take place.[24]

The MAA also prepared an initial analysis of the Bill, which is discussed in the key issues and provisions section of this Digest. Further to its comments on specific aspects of the Bill, the MAA expressed dissatisfaction with the consultation processes that had preceded its introduction. The MAA contended that while extensive consultation had been undertaken with the industry, similar opportunities to put the viewpoints of consumers to government had not been offered. It acknowledged, however, that the Minister had contacted some organisations ‘around this general issue in November 2013’.[25]

Grassroots action quickly followed the comments from hearing impaired stakeholders when an online petition seeking the maintenance of mandatory captioning reporting was set up on change.org.[26]

Policy position of non-government parties/independents

A number of Government members, as well as the non-government parties and independents have long expressed concern about the loss of local media voices and content, which they maintain has resulted from the gradual easing of media ownership rules and content regulations.

Prior to the passage of the Howard Government’s changes to media regulation in 2006 for example, Barnaby Joyce and others in The Nationals publicly expressed concern that localism, diversity and competition in rural and regional areas would be lost unless adjustments were made to the proposed legislation. It was at the Nationals’ insistence that a rule stipulating that four media groups must remain in regional areas following media merger activity was incorporated in the 2006 legislation.[27] Barnaby Joyce reportedly continues to be wary of further dilution of media regulation and the possibility of ‘the centralisation of all media in Sydney’.[28]

The Greens are also opposed to media legislation which may reduce media diversity, as is Senator Nick Xenophon.[29]

Some Opposition members have been more vocal than others on the issue of local content. Frontbencher Stephen Jones, in his capacity as representative of the Wollongong area in New South Wales, has expressed concern about the impact changes to media rules would have on local content. Fellow frontbencher Shayne Neumann, who represents a regional Queensland community, is similarly concerned about the limited sources of local information available.[30]

Financial implications

The Explanatory Memorandum comments that it is not expected that this Bill will have any direct financial impact on Government revenue or expenditure.[31]

As the Minister noted in his second reading speech, it is likely that the Bill will deliver financial benefits to broadcasters in the form of reductions in compliance costs. Indeed, this is one of the objectives the Minister has stressed.[32] The Department of Communications has estimated that the measures in this Bill will lead to a combined annual saving of $0.35 million in compliance costs.[33] Given the substantial revenues earned annually by commercial broadcasters and subscription licensees, this figure appears minimal.[34]

Statement of Compatibility with Human Rights

The Statement of Compatibility with Human Rights can be found in the Explanatory Memorandum to the Bill.[35] As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.

The Explanatory Memorandum to the Bill argues that amendments to captioning requirements which the Bill intends to make ‘will reduce the regulatory and compliance reporting burden’ on providers of those services’ but will not reduce captioning quality or targets.[36] Therefore, the rights of people with a hearing or vision disability to improved access to television services and emergency warnings under the Convention on the Rights of Persons with Disabilities will not be diminished.

It argues further that neither will the right to take part in cultural life be diminished by the removal of a requirement that subscription television stations have their annual reports audited to ensure that they spend a certain amount of their programming expenditure on the production of Australian and New Zealand drama. Changes to the legislation will simply remove another significant administrative burden for broadcasters who have consistently ‘reported a high level of compliance’ with the New Eligible Drama Expenditure Scheme.[37]

As noted later in this Digest, stakeholder groups representing people with hearing and vision impairments have expressed scepticism about the extent to which broadcasters and subscription television licensees will comply with captioning requirements if they are not required to report on compliance. Wayne Hawkins, ACCAN Disability Policy Advisor has stated: ‘with no reporting requirement for broadcasters, consumers will be left to do the job of the regulator’.[38]

Key issues and provisions

This Bill consists of nine schedules. The following provides details of the major changes in the Schedules. The Explanatory Memorandum provides explanation of all proposed changes.

Schedule 1: amendments to ACMA’s planning powers

Part 3 of the BSA (sections 23 to 35) provides ACMA with the power to undertake actions to ensure the ‘economic and efficient use of the radiofrequency spectrum’.[39] This has involved processes such as preparing frequency allotment plans or licence area plans and determining priorities between particular areas of Australia and different parts of the broadcasting services bands for those plans. As the Explanatory Memorandum points out, initial planning for spectrum use has been completed, and as such, sections 24 and 25 and certain parts of section 26 which refer to those sections are considered no longer relevant.[40]

Items 2 to 7 of Schedule 1 repeal sections 24 and 25 of the BSA and amend the relevant parts of section 26 to reflect this situation. Item 1 repeals paragraphs 53(2)(e) and (f) of the ACMA Act as these sections will be made redundant by the repeal of sections 24 and 25 of the BSA.[41]

Items 10 and 11 repeal subsections 32(2) and (2A) and paragraph 44A(2)(c) of the Radcomms Act as they also become redundant as a consequence of the repeal of sections 24 and 25 of the BSA.[42]

Comment

Repeal of sections 24 and 25 should not affect ACMA’s ability to make changes to licence area plans as section 26 continues to require that the regulator:

… must, by legislative instrument, prepare licence area plans that determine the number and characteristics, including technical specifications, of broadcasting services that are to be available in particular areas of Australia with the use of the broadcasting services bands.

Schedule 2: digital switchover and restacking

Schedule 4 of the BSA provides details of the transition by which ACMA was to ‘formulate schemes for the conversion, over time, of the transmission of television broadcasting services from analog [sic] mode to digital mode’. The Schedule provided that there was to be a simulcast period during which broadcasters were to transmit programs in both analogue and Standard digital mode. At the end of the simulcast period analogue transmissions were to cease. Broadcasters were also required to meet quotas for the transmission of high definition digital programming.

The last analogue services ceased 10 December 2013 and a reorganisation of television services commenced at that time. This reorganisation, known as the restack, is intended to ensure the most efficient use of the ‘digital dividend’ spectrum that has resulted from the move to digital television broadcasting. Restack of services is due to be completed by the end of 2014.

This Bill removes definitions and references to the simulcast period and the restacking process and inserts new definitions or descriptions which reflect the post-analogue environment where appropriate. For the most part, the Bill repeals sections of the BSA which are redundant because the simulcast period has ended or which refer to a transition period following the simulcast period which has also passed.

The Explanatory Memorandum provides a detailed explanation of the intended changes.

The major definitional changes relating to simulcast and restacking highlighted by the Explanatory Memorandum are:

• the repeal of references to core and primary commercial television broadcasting services, which described the types of services authorised for transmission during the simulcast period. Item 3 repeals these definitions and item 4 inserts a new definition of primary commercial television broadcasting service into subsection 6(1) of the BSA so that it is the same as the definition given in clause 41G of Schedule 4 and
• the repeal of references to designated re-stack day and final digital television switch over day.

Other items listed in the Bill make consequential changes to Schedule 4 of the BSA.

Item 15 repeals sections 41A, 41B and 41C of the BSA and inserts a new section 41C. This section will remove a current distinction between licences in force before and those in force after the end of the simulcast period. The section will authorise a commercial television broadcasting licence issued for a licence area to provide:

–      one or more High definition (HDTV) multi-channelled commercial television broadcasting services
–      one or more Standard definition (SDTV) multi-channelled commercial television broadcasting services. 

Item 27 repeals subsection 121G(2) of the BSA to remove references to Australian content which no longer apply and inserts a new subsection 121G(2) which requires a commercial television broadcaster to transmit not less than 1,460 hours of Australian programming each calendar year during targeted viewing hours ‘otherwise than on the primary commercial television services provided by the licensee’. The annual quantum of Australian programming required to be broadcast on primary commercial television broadcasting services is set out at subsection 121G(1) (which will be amended by items 23 to 25).

Item 49 repeals subsection 130ZR(6) to remove references to the simulcast period. It substitutes a new subsection 130ZR(6) which continues to grant the national broadcasters certain exemptions from captioning—if an SDTV or HDTV multi-channelled national television broadcast is transmitted other than by satellite, unless the television program was previously transmitted on a national broadcaster’s primary service.

Item 51 repeals section 211 of the BSA, which allows that in addition to other methods of giving a notice to a person, a notice may be given to a person by telex or by fax. It makes no provision for a new section. A replacement provision is not needed because electronic notices can rely on the Electronic Transactions Act 1999 and that the Act ‘does not specify, or exclude any electronic communication techniques from its scope, accommodating future technological developments’.[45]

Item 90 repeals the simplified outline at clause 1 of Schedule 4 of the BSA and inserts a new clause 1 which is a simplified outline that omits references to ACMA’s task in formulating schemes for the conversion from analogue to digital mode, to the simulcast period and the cessation of analogue transmissions.

Items 91 and 93 repeal a number of definitions which are no longer required, including the definitions of simulcast period, the national and commercial television [digital] conversion schemes and digital-only local market area.

Items 123 to 128 deal with matters relating to anti-siphoning requirements for national broadcasters. Amendments reflect the end of the simulcast period and make no changes to the requirements for the televising of events on the anti-siphoning list. These will continue to provide that a national broadcaster must not televise on a secondary service in a coverage area all or part of an anti‑siphoning event unless it has previously televised in the coverage area all or part of the event on the broadcaster’s primary national television broadcasting service or it televises simultaneously in the coverage area the whole or part of the event on both services (this applies to SDTV and HDTV transmission modes—clauses 41K and 41L of Schedule 4).

Item 1 of Schedule 2 to the Bill amends the ACMA Act to reflect changes to Schedule 4 of the BSA and item 134 amends the Datacasting Charge (Imposition) Act 1998 similarly.[47] Items 135 to 163 deal with amendments to the Radcomms Act. These repeal definitions as a consequence of the repeal of definitions in the BSA and repeal provisions that are redundant as a result of the end of the simulcast period.

Comment

It does not appear that the changes in this Schedule will elicit any criticism. The amendments remove unnecessary detail and redundant information from what had become over time lengthy and complex legislation.

Schedule 3: eligible drama program expenditure audits

Division 2A of Part 7 (section 103N(1)) of the BSA requires that a condition of the issue of licences for subscription television channels which provide drama programs is that each financial year these channels spend at least ten per cent of their total program expenditure on new Australian or New Zealand drama productions. (See the table below for a list of the channels, providers and licensees to which this requirement applies).

New eligible drama channels and licensees 2012 –13

The Explanatory Memorandum to this Bill maintains that since the introduction of this scheme, participants ‘have reported a high level of compliance’ with this requirement.[49] But it should be noted that while the compliance level may have been high, participants in the scheme have not necessarily met their targets each year. ACMA reported that in 2011–12, the subscription television industry spent $24.38 million on new eligible drama, including for the programs Dripping in Chocolate, Top of the Lake, Lightning Point, Wentworth and Tangle (Series 3). This represented a shortfall of $6.81 million. Importantly, this deficit is consistent with a recent trend for participants not to reach the required expenditure requirement (see the table below for recent spending results).

New eligible drama expenditure subscription television channels and licensees

	2012–13 $Ms	2011–12 $Ms	2010–11* $Ms	2009–10* $Ms	2008–09* $Ms
New eligible drama expenditure requirement	$33.41	$28.82	$30.87	$27.74	$26.11
Expenditure on new eligible drama	$13.70	$24.38	$34.63	$36.15	$28.56
Expenditure nominated to make-up previous year's shortfall	$6.41	$6.81	$12.11**	$11.32	$13.88***
Expenditure nominated towards current year's 10 per cent requirement	$6.42	$22.53	$24.05	$15.59	$14.79
Remaining obligation to be acquitted in the next financial year	$25.76	$6.41	$6.81	$12.15	$11.32

Source: ACMA, New eligible drama expenditure scheme results, 2012, accessed 29 October 2014.*The ACMA released revised figures for compliance in January 2014, following a scheme participant’s re-submission of annual returns for the periods 2007–08 to 2010–11.
** A licensee entered administration in January 2011 reducing the required shortfall obligation from 2009–10.
***A licensee failed to acquit $40,000 of the 2007–08 obligations in 2008–09. An amount equal to this was spent in 2009–10 to acquit the shortfall.

Items 2 and 3 of this Schedule do not remove the obligation of licensees and channels to continue to report their compliance with the Eligible Drama Expenditure requirements. They do, however, remove the need for participants in the scheme to accompany their reports with certification from a registered auditor of the results presented to ACMA by repealing and replacing subsections 103ZA(1) and 103ZB(1) of the BSA. The timeframe for provision of the report will be unchanged— operators of one or more subscription drama services are required to provide the report to ACMA within 60 days after the end of each financial year, in an approved form.

Item 4 of the Schedule proposes to repeal sections 103ZE and 103ZF. These sections currently require ACMA to issue compliance certificates to licensees, channel providers and part-time channels providers, which are prima facie evidence of the matters they contain.

Comment

While the repeal of these sections of the BSA clearly fulfils the Government’s promise to ease reporting burdens, given the recent failure of subscription drama service operators to realise total expenditure quotas for programming, a question remains as to how quotas will be monitored in the future. According to the Explanatory Memorandum, this will not be problematic:

… ACMA will maintain compliance strategies including the judicious use of its power to make inquiries about information received in reports from licensees and channel providers in order to retain a level of confidence in industry compliance.[50]

It could be argued that more important than retaining a level of confidence in compliance would be ensuring that compliance is indeed assured. The question remains about the extent to which the possible lack of specific monitoring will affect the amount of Australian content produced by subscription drama service operators. There is a danger that with less oversight, participants in the scheme may be less likely to fully comply with their obligations.

Schedule 4: review of Codes of Practice

Currently, ACMA is required, under subsection 123A(1) of the BSA and clause 29 of Schedule 6 to the BSA to conduct periodic review of subsections 123(3A), 123(3C) and subclause 28(4) of Schedule 6 to the BSA to ascertain if these sections operate in accordance with community standards.

Subsections 123(3A) and 123(3C) require that in developing industry codes of practice in relation to the classifying of films, the codes apply the film classification system provided for under the Classification (Publications, Films and Computer Games) Act 1995, so that films are suitable for broadcast, or that they are classified for broadcast during particular time periods, in order that children are not subject to inappropriate content. Subclause 28(4) of Schedule 6 requires that in addition to the classification of films, codes apply the computer games classification system administered by the Classification Board to interactive computer games and methods of modifying other content are applied so that that content is suitable for transmission.

If, after conducting a review under subsection 123A(1), ACMA determines that a reviewed provision is not in accordance with prevailing community standards, ACMA must recommend appropriate amendments to the Minister (subsection 123A(2)). The Minister must table the recommendation in both Houses within 15 sitting days of receiving it (subsection123A(3)).

Items 1 and 2 of this Schedule propose to repeal section 123A of the BSA and clause 29 of Schedule 6. The Explanatory Memorandum states that the reason for the repeal of these provisions is that ACMA has access to means other than reviews by which to judge compliance with community standards. These may be:

… based upon the volume of complaints received from viewers or the ACMA’s own inquiries. In addition the industry codes of practice are periodically reviewed and the ACMA is required to ensure that a draft code provides appropriate community safeguards prior to registration.[51]

There is a detailed process under which draft codes for the various industry sectors are developed and updated. The process can involve investigations initiated by ACMA, and this can feed into a review process undertaken by each industry sector. Part of that review process required under section 130M of the BSA involves community consultation and ACMA review of community submissions for changes to draft codes. Moreover, investigations can be undertaken by ACMA into complaints (section 170 of the BSA) and the Minister can direct the regulator to investigate issues (section 171 of the BSA).

An ACMA investigation into reality television, which was conducted at the Minister’s directive, was taken into account, for example, in developing the last Commercial Television Code of Practice registered in 2010. After public consultation ACMA recommended that reality television programs should be prohibited from depicting people in a ‘highly demeaning or exploitative manner’ and that an advisory note provide guidance to producers on how to interpret this provision.[52] Both these recommendations were included in the updated, current code.

Comment

It should be noted that it is most likely some industry stakeholders will not be fully satisfied with the changes proposed in this Bill. As noted earlier, free-to-air broadcasters were keen for more radical changes to be made to codes of practice requirements. In its submission following the release of the Department of Communications first discussion paper on these issues FreeTV reasoned:

The current [commercial television] Code is outdated and does not reflect the way Australians consume media.

The current media environment is very different than it was 20 years ago, when the Code was originally developed. The current extensive and prescriptive regulations are no longer an efficient way of regulating broadcasting platforms. The Code has become more and more complex and has not been appropriately recalibrated to reflect the significant changes that have occurred in the media industry. The ACMA has also become increasingly interventionist and prescriptive in the Code process.[53]

FreeTV called for removal of any requirement to consult with ACMA or take into account any relevant research conducted by ACMA in developing codes. It argued this would give industry increased flexibility, with fewer prescriptive requirements and represent a less interventionist approach from ACMA.[54]

There are sure to be at least some conservative consumer stakeholders who object to the repeal of these sections and who advocate more, rather than less regulation of films on television and computer games and other content. One group has commented in another context:

Self-regulation has clearly failed, as may have been expected. Media producers are hardly likely to act contrary to their own financial interests. Predictably, they have pushed the boundaries of community standards to excite interest in the controversial as a means of advertising their products. There is abundant evidence that the media drives community standards, and is not regulated by such standards [emphasis in original].[55]

In its submission to the Australian Law Reform Commission inquiry into classification, the Australian Council on Children and the Media observed:

Overall our experience of industry codes is that they operate mostly as public relations for the industry in question. They make it look like they are doing something, but in fact their main function is to make the industry look better. Industries do not voluntarily stop doing things they otherwise want to do—especially things that make them money.[56]

Notwithstanding such objections, arguments pertaining to this proposed change most probably will be mounted from either a perspective in favour of retaining the current amount of co-regulation for codes of practice in general or one in favour of more self-regulation. Some of the arguments in favour of more self-regulation may be that it would be that markets, including media markets, function more efficiently without government interference. Moreover, self-regulatory codes could be more flexible and adaptable, and it would follow, more responsive to community standards; and the bottom line for this argument—self-regulation lowers the burden of regulatory compliance for industry.[57]

From the opposing perspective, the existing system is seen as a better option as it ensures that while a degree of government control and oversight remains, broadcasters develop, and for the most part, police the rules. To paraphrase one reading, co-regulation gives joint responsibility to the market and government, whereby the government’s role is setting objectives which market actors must achieve – with the threat of statutory powers invoked in the absence of market self-regulation.[58]

As set out above, in addition to providing for a review process, section 123A of the BSA currently requires any recommendations for change to be given to the Minister by ACMA and then tabled in Parliament. The Scrutiny of Bills Committee has sought advice from the Minister about whether it is appropriate to remove this Parliamentary scrutiny function by repealing section 123A.[59]

Schedule 5: directorship notifications

Currently section 62 of the BSA requires commercial television and radio broadcasting licenses, datacasting licensees and the publishers of associated newspapers to provide a list of their directors to ACMA within three months following the end of each financial year. Sections 63 and 64 also require licensees and newspaper controllers to notify ACMA of changes in control within ten days of those changes taking place.

Item 1 of this Schedule will repeal the requirement to provide an annual list of company directors to ACMA. The Explanatory Memorandum argues it is no longer necessary as ACMA can access information on directorships from other sources, including searching the registers maintained by the Australian Securities and Investment Commission (ASIC).[60] Item 2 extends the time period for licensees and controllers of associated newspapers to notify ACMA of changes of control from ten days to ten business days.[61]

Free TV called for these changes in its submission to Senate Finance and Public Administration Legislation Committee inquiry into the Omnibus Repeal Day (Autumn 2014). It argued:

Information on directorships of broadcasting licensees is already reported to ASIC. It is unnecessary duplication for broadcasters to have to report this information annually to a separate government regulator, particularly if there is no change. The ACMA can gain information about directors simply by accessing the ASIC register. This is a clear example of unnecessary red tape for industry.[63]

It continued:

The Bill should be amended to remove the duplication of both the controller and the licensee notifying the ACMA about control changes. This will involve the repeal of section 63 and consequential amendments to section 64.

Often a licensee will not know if there has been a control change for some time due to the complexity of the relevant transactions and corporate structures, and technical reports on company structures can take a number of days to receive. The licensee may be reliant on the controller to provide information about their activities.

Hence the person entering the position of control or alternatively, leaving the position of control should be the one to notify the ACMA in both instances, rather than the licensee. This will reduce duplication.[64]

Comment

It may be worth noting that corporate transparency, that is, the extent to which a corporation's actions are observable by outsiders, is seen as an important objective for business. And it may be that transparency is particularly important for media organisations, which are often labelled as the guardians of democracy.[65] While the following observation applies to business in general, because of its unique role in providing people with news and information it could be argued it applies more so to the media:

Transparency is one of the key steps to corporate governance and ensures that management will not engage in improper or unlawful behavior [sic] since their conduct can be and will be scrutinized. To achieve transparency, a company should adopt accurate accounting methods, make full and prompt disclosure of company information and make disclosure of conflict of interests of the directors or controlling shareholders, etc. A key element of ‘good’ governance is ‘transparency’, which incorporates a system of checks and balances among the board of directors, management, auditors and other stakeholders….Building a culture of transparency is a fundamental first step to achieving trust. Open and honest communications support the decision to trust. Lack of communication and transparency creates suspicion.[66]

While the Explanatory Memorandum notes that there are other means by which information about directorships of commercial broadcasters can be obtained, there is merit in the argument that more, rather than less access to such information is preferable.

Schedule 6: captioning

Legislative requirements to caption programs were introduced to the BSA in 1998 as part of the transition to digital broadcasting.

In 2009–10 the Labor Government reviewed captioning as part of an access to electronic media for vision and hearing impaired people review.[68] Free TV declared in comments prior to the review that captioning represented yet another burden for free-to-air broadcasters, and one for which they would not receive government funding support.[69] The subscription television advocacy body, ASTRA, maintained in its submission to the review that costs for its members from captioning would be even more than those faced by free-to-air broadcasters because of the number of subscription channels, the amount of live sports programming on subscription television and its niche audience base.[70] Both bodies reluctantly accepted increased captioning obligations imposed by the previous government, but in recent submissions to the NCoA, Free TV again raised the issue of the burden captioning imposes and called for the removal of certain requirements.[71]

Free TV argued that while its members had demonstrated their commitment to this service in ‘comfortably’ meeting captioning requirements, there were problems with the system. These included:

• ACMA had taken a ‘strict view’ of the reporting requirements and the level of detail required in reporting was significant
• legislation did not ‘acknowledge the challenges faced by broadcasters’ who have multiple transmitters in a single licence area
• a commercial free-to-air broadcaster would breach the new licence condition if it was unable to provide captioning for reasons beyond its control. In reference to the last of these problems, Free TV observed that if technical difficulties cause the whole of a broadcaster’s service to go ‘black’, there is no licence condition or penalty for broadcasters and
• regional affiliate broadcasters were held in breach of the legislative provisions in circumstances where captioning errors occur in live programming delivered to the affiliate from the source.[72]

The advocacy body called for the changes to improve ‘efficiency’ while not altering obligations. These were to remove the requirement to provide an annual report on captioning compliance and to replace it with a complaints-based, ‘spot’ audit system, to provide that a breach affecting less than 50 per cent of an area is not considered, to exclude breaches where reasonable efforts were demonstrated to comply and to apply that exception to breaches of quality as well as of quotas.[73]

ASTRA also complained to the NCOA about the requirements imposed on 70 subscription channels to provide increasing rates of captioning.[74] It labelled the regulatory framework for captioning as one which had required significant capital and operational expenditure, with some ASTRA members claiming they spent 20 working days preparing and processing captioning exemptions and target reduction orders. ASTRA declared this money could be better spent on increased captioning.

ASTRA called for amendments:

• to recognise channel provider entities as they shared the obligation and cost associated with captioning
• more practical arrangements to deal with repeat programs
• greater flexibility for exemptions and target reduction order applications
• giving channel providers the ability to aggregate captioning requirements across the suite of channels they owned and operated
• ensuring that a channel provided on more than one STV platform has the same captioning target, regardless of the platform on which it is carried and
• ensuring captioning standards take into account the technical and other limitations regarding captioning provision.

It also called for ACMA to be given ‘better guidance on the use of its discretion when developing captioning quality standards and processes for record-keeping and reporting, which are currently excessive and unnecessarily burdensome’.[75]

In its comment on the Department of Communications discussion papers, Optus sought an exemption from captioning reporting obligations for subscription television licensees who are resale customers of wholesale providers, arguing that these involve unnecessary costs estimated at 100 person hours per year.[76]

The only consumer organisation which commented on this aspect of the Department of Communications discussion papers, Media Access Australia (MAA), was critical of the caption exemption process. It argued that in granting exemptions, ACMA was inconsistent and did not provide reasonable explanations for its decisions. Moreover, the length of exemptions appeared to be ‘guided more by what a licensee had applied for, rather than looking at the best outcome for the situation’.[77] In MAA’s view, ACMA needed to be more transparent; consumers needed to know what the rationale was behind such decisions.[78]

This Bill proposes to amend Part 9D of the BSA to accommodate a number of these complaints and, according to the Explanatory Memorandum, ‘to improve administrative arrangements and increase flexibility for free-to-air broadcasters and subscription television licensees in complying with captioning regulation’.[79]

Items 1 and 2 propose to insert four new definitions into section 130ZK:

• channel: a continuous stream of programs
• channel provider (in relation to a subscription television service provided by a subscription television licence): a person who packages a channel (which may include programs produced by the person) and supplies the licensee with the channel where, apart from any breaks for the purposes of the transmission of incidental matter, the channel is televised by the licensee on the service
• incidental matter: advertising or sponsorship matter (whether commercial or not), program promotion, an announcement, a hosting or any other interstitial program
• part-channel provider (in relation to a subscription television service provided by a subscription television licence): a person who assembles a package of programs (which may include programs produced by the person) and supplies the licensee with the package. The package needs to constitute a significant proportion of the program material that is televised by the licensee on the service, and there is to be no channel provider in relation to the service.

Item 3 repeals paragraph 130ZUA(3)(c) which requires an application for exemptions from, and reductions to, captioning requirements to be made in ‘the financial year preceding the eligible period specified in the application’ or ‘the 180‑day period beginning at the start of the eligible period specified in the application’. The item will extend the deadline for lodging an application to 31 March of the first financial year for which a free-to-air or national broadcaster seeks the exemption or target reduction.

Item 4 repeals subsections 130ZV(1) to (4) to remove information about captioning requirements which applied in 2012 and 2013. Proposed subsection 130ZV(1) provides the following formula for annual captioning targets:

 

Proposed subsection 130ZV(2) lists the annual captioning targets for subscription television services. These are included in a table in the section and are reproduced below:

The Explanatory Memorandum maintains that the modified formula for sports services at new subsection 130ZV(3) will give subscription television licensees more flexibility to direct captioning towards ‘events of greater interest to subscribers’.[80] In addition, this change will allow subscription services to apply captioned hours of programs that may run over their scheduled time to an aggregated captioning target for all sports services. Currently, if programs run over their scheduled time subscription broadcasters have the alternative of moving the program to an alternative channel, where the captioning can result in ‘over-captioning’ on that channel, or they can caption a less popular program on a channel that has not reached its captioning target. A proviso is proposed that individual channels must caption a sub quota of two thirds of the overall captioning target.

The MAA analysis sees this section as introducing different treatment for sports channels. It also adds a level of complication and confusion so that it is not clear what level of captioning is required on channels. Moreover, it may add to administrative and regulatory costs. Another issue is that while subscribers to sports channels would receive all channels, the sports some may be interested in could fall in the ‘under captioned’ category and this situation is subject to the ‘whim of the provider’.[81]

Item 5 of Schedule 6 proposes to add a new subsection 130ZV(6) which will exempt new subscription television services from captioning targets for the period when they first commence to 1 July of the financial year which is at least one year after the services commence. The MAA analysis argues that the drafting of this subsection is ‘loose’ in defining a ‘new’ channel. MAA is of the opinion that current arrangements are adequate to give licensees options in exempting new channels from captioning.[82]

Item 7 repeals and replaces paragraph 130ZY(2)(c) which requires applications for exemptions from captioning or target reductions to be made in the financial year preceding the eligible period specified in the application or within the 180‑day period beginning at the start of the eligible period specified in the application. New paragraph 130ZY(2)(c) will allow applications to be made in the period commencing 1 July in the financial year immediately before the period specified in the application and 31 March of the period specified.

Item 10 proposes to amend section 130ZZ, which deals with captioning of repeated television programs. Currently subscription television licensees have to ensure that all repeats of a program are captioned if the first transmission of the program was captioned. The proposed new subsection will provide exemption to this rule if a program was originally supplied by one channel provider or part provider and repeats are then supplied by another provider.

Section 130ZZA requires ACMA to develop quality standards for captioning. Item 11 proposes to add new subsection 130ZZA(2A). This would require ACMA to consider the differences, including time constraints for live content, between providing captioning services for wholly live or wholly pre-recorded programs and programs that include both live and pre-recorded elements. The Explanatory Memorandum states that the new subsection will provide a process for determining captioning standards that takes into account the differing conditions and restrictions that may apply to live and pre-recorded programming.[83] It continues that notwithstanding the proposed new subsection, it will remain a requirement that services ‘must aim to achieve the same captioning quality’ regardless of whether a program is live or pre-recorded.[84]

Item 12 proposes to add new subsection 130ZZA(7A). This subsection exonerates licensees or broadcasters who are unable to comply with captioning standards determined by ACMA as the result of technical or engineering failures which could not have been reasonably foreseen.

Item 13 proposes to repeal subsections 130ZZC(1) to (4). These subsections require that commercial television and national television broadcasters must prepare and present reports to ACMA within 90 days following the end of a financial year on captioning compliance. The Explanatory Memorandum argues that removal of these subsections will allow ‘a move to a complaints-based compliance framework’ and that this is more appropriate given it is now obvious when broadcasters do not meet their obligations.[85]

The MAA argues that the repeal of these subsections is based on a misconception that free-to-air television services have a 100 percent captioning requirement.[86] There is some justification for this comment, given that free-to-air broadcasters are not required to caption programs on their multi-channels unless those programs have previously been broadcast with captions on their main channels. On the other hand, the broadcasters are required to caption all programs between 6am and midnight and all news and current affairs, so this criticism appears a little harsh.[87]

Item 15 proposes changes to current record keeping requirements so that instead of broadcasters and subscription licensees being required to keep written records to enable compliance to be ascertained, they will be required under a revised section 130ZZD to keep written records in relation to quality standards and audio visual records to ascertain quality standards. Currently, records must be kept for 90 days after the end of the financial year to which they relate. The new section will require that written records are kept for at least 90 days after the end of the financial year to which the record relates and audio visual records for at least 30 days after the broadcast of a program, unless before the end of the 30 days a complaint has been made about the program and then for at least 90 days after the broadcast of the program. The section provides that the records must be made available to ACMA on request.

The MAA is of the view that this change will modify rules to produce a situation where ‘there is less pressure on licensees to report in a timely manner’. The MAA believes the changes will also effectively mean that a captioning complaint must be made within 30 days of broadcast and investigated within 90 days of broadcast.[88] The implication is that there is insufficient time for complaints to be resolved within this period.

Comment

It should be noted that submissions to the previous Government’s Access to electronic media for hearing and vision impaired people report were sceptical about the industry’s arguments about the costs associated with captioning which underpin its advocacy for change.[89] The Deafness Forum for example argued that the industry’s complaints were unjustified, as money spent on captioning was insignificant in the context of the industry’s total annual expenditure.[90] Similarly, the Disability Discrimination Legal Service declared it disingenuous for the broadcasting industry to claim financial hardship with regards to captioning services when it was clear it was spending substantial amounts of money on improving access for people without disabilities.[91] The Australian Federation of Disability Organisations (AFDO) proclaimed that protests about how costly and onerous captioning was for industry ‘should be treated the same way we would respond to a company saying that it should not pay taxes, offer fair wages to staff or meet safety regulations’.[92]

The MAA analysis of the Bill concluded that it had been ‘drafted with provisions that approach the whole issue solely from the perspective of the television industry. It reads like a wish list for removing compliance requirements’.[93]

Schedule 7: media diversity points

The current media diversity points’ calculation was introduced by the Howard Government in 2006 as part of a package of legislative change that the Government argued would produce a twenty–first century media ownership regime. The regime was intended to give media organisations maximum opportunities to expand and offer a greater array of services to the Australian public.[94]

In response to concerns about how media diversity would be affected by the 2006 changes to media ownership regulations, the legislative package provided that a media transaction could only occur if a minimum number of commercial media voices in a relevant market remained (four in regional markets, five in mainland state capitals) following its completion. What is called an ‘unacceptable media diversity situation’ exists if there are less than five media voices (also referred to as points) in a metropolitan licence area (subsection 61AB(1) of the BSA) and less than four in a regional licence area (subsection 61AB(2) of the BSA).

The Explanatory Memorandum to this Bill declares that its intention is to remove an anomaly which exists under this wider rule (set out in the table at subsection 61AC(1) and reproduced at Appendix A). The anomaly is that currently a commercial radio licence is counted as a point in a licence area only if the service broadcasts in exactly the same area as the radio licence. However:

… a commercial radio service that is licensed to operate in a licence area that entirely overlaps another, smaller licence area is not counted as a voice in the smaller licence area, even though the service would be available to all residents in this smaller licence area.[95]

Items 1 and 2 of this Schedule therefore propose to amend table item 1, paragraph (d) in subsection 61AC(1) and table item 2, paragraph (b) in the same subsection. The amendment will allow a commercial radio licence (which can either be an individual licence or a licence which is part of a media group) to count as one point in relation to the media diversity rules if the licence area of the radio licence ‘is the same as, or is entirely within’, the licence area of another licence.

The following diagram of Bunbury radio licence area in Western Australia provides an example of how some larger licence areas encompass other licences. In this case, Bunbury RA1 includes Bunbury RA2, Augusta RA1, part of Harvey RA1 and Collie RA1 and Margaret River RA1, while the Margaret River licence area also encompasses Augusta RA1.

Source: Parliamentary Library (based on ACMA licence areas boundary information).

Comment

The intended changes in Schedule 7 appear innocuous, and the argument put by the Explanatory Memorandum that the current situation does not reflect the practical availability of services in smaller overlapped areas, is not without justification. For one reason because, as Commercial Radio Australia observed in its submission to the Productivity Commission in 2009, small radio operators have the least amount of resources available to deal with regulatory constraints and obligations.[98]

However, it is possible that critics may consider the proposed changes in this Bill as a means by which diversity in regional and rural areas is further eroded as operators of radio licences in the smaller areas would be vulnerable to takeover bids or incorporation into the larger licence area operators.

In its comments on the regional radio content inquiry the Communications Law Centre (CLC) made the point that as many regional markets are duopolies, economies of scale mean that broadcasters in those markets have a strong incentive to consolidate by centralising content and operations. The CLC added:

The incentive to act in the best interests of the audience is comparatively weak, as the audience has no way of ‘punishing’ the broadcaster if it chooses to reduce its localism output, by switching to an alternative commercial radio provider.[99]

Another potential outcome was raised by the House of Representatives Standing Committee on Communications, Transport and the Arts inquiry into regional radio in 2001.[100] This inquiry pointed out that many local radio voices had been replaced by an increasing number of networked, pre-recorded, automated and syndicated programs.[101] Submissions to the inquiry into regional radio in 2010 also freely admitted that it is common practice for regional radio stations to used syndicated programs to cover periods of staff leave.[102] The change in this Schedule could make more syndication a more attractive option for larger regional commercial radio operators.

It is worth noting further the House of Representatives Committee observation in 2001:

Commercial broadcasters are generally only interested in providing services which are commercially viable. The costs of providing a service in some communities simply exceeds the revenue that would be returned by that community to the broadcaster.[103]

Appendix B shows the already-concentrated commercial radio market in Australia.

Schedule 8: licence area population change

Schedule 8 proposes to provide a grandfathering arrangement in relation to local content requirements. This would apply to commercial radio licences that may be affected by changes in licence area populations as determined by ACMA after its taking into consideration the latest census information from the Australian Bureau of Statistics (under section 30).

Local content requirements currently are that broadcasters in areas with populations under 30,000 must transmit 30 minutes per day of local content, while licensees in areas with populations of more than 30,000 are required to broadcast three hours of local content. This applies during daytime hours (5 am to 8 pm) each business day.[104]

Item 1 repeals the current subsections 43C(4) to (4C) and proposes a new subsection 43C(4) which grandfathers the commercial radio licensees whose licence areas will be in breach of local content conditions following any future ACMA determinations made as the result of changes in population. Conditions for local content will continue to apply for these licensees as if the previous ACMA determination was still in force.

Subsection 53(1), 55(1) and 55(2) prevent a person being in a position to control commercial television broadcasting licenses, the total licence areas of which exceed 75 per cent of the population of Australia. Section 52 of the BSA is a grandfathering provision, which currently provides that if ACMA makes a new determination of a licence area population and, as a result, a person would be in breach of subsection 53(1), 55(1) and 55(2), those subsections continue to apply as if the determination had not been made. Item 2 amends section 52 to extend the grandfathering arrangement so that if an ACMA population determination would result in a person breaching any provisions of Divisions 2 and 3 of Part 5 of the BSA (sections 53 to 56A), those provisions will continue to apply as if the determination had not been made.

Comment

It is likely that this Schedule will provoke considerable criticism as the issue of local content has been for some time both contentious and emotive. Considerable debate has also occurred about the merits of retaining the 75 per cent rule.

Local content

There is a long-standing perception in Australia that an important objective of broadcasting should be to serve local interest. This has been particularly the case with regards to regional and rural areas. The BSA originally reflected that perception. Its provisions included requirements that commercial radio broadcasting programming cater for the particular needs and interests of communities and that local radio should deal with matters of local significance.

Arguably, the original intention of the BSA has been systematically undermined. In 2001, the House of Representatives Local Voices inquiry into regional radio concluded that the delivery of services in the bush had been adversely affected as the result of a combination of technological, economic and regulatory developments in the broadcasting industry.[105] The Howard Coalition Government’s 2006 media reform package included a commitment to ensuring that its liberalisation of the media regulatory framework would not further reduce local content on commercial radio or commercial television.[106] There were a number of local content requirements associated with the package, including the broadcast of local news and information.

When the local content rules were introduced, regional radio broadcasters were expected to deliver 4.5 hours of local content during daylight hours on business days.[107] But these content requirements have progressively been relaxed. Most recently, changes have been made in response to findings by ACMA and the Productivity Commission and submissions from regional radio broadcasters to a discussion paper released in 2010 by the Minister for Broadband, Communications and the Digital Economy, Stephen Conroy.[108]

In criticising the local content requirements, generally regional broadcasters have argued consistently, regardless of the amount of regulation that applies to them, that they are subject to excessive regulation. The industry body, Commercial Radio Australia (CRA), has given in principle recognition to the importance of local content. At the same time, it has argued strongly that existing legislation has threatened ‘the viability of the regional commercial radio industry by imposing inflexible and unworkable operating conditions and significant additional compliance costs and obligations’.[109]

In opposing the most recent changes, the Community Broadcasting Association of Australia (CBAA) expressed the opinion that if the promotion of localism remained a valid objective of broadcasting legislation:

… then regional commercial radio licensees should be required to broadcast material of local content in addition [emphasis in original] to what is already required. The opportunities for coverage of local weekend issues and events in regional and remote Australia are too obvious and numerous to mention.[110]

In its submission to the regional radio discussion paper, the Communications Law Centre (CLC) also referred to the tradition and importance of localism in Australian broadcasting.^[111] There is a public interest dimension in providing local broadcasting to regional areas, according to the CLC, which assists citizens to carry out their duties as members of communities. Moreover, the CLC acknowledged the tacit recognition of the significant public interest in local broadcasting in the BSA. It noted further that the BSA is required generally to provide an efficient and competitive regulatory environment that is responsive to audience needs.^[112]

It is plausible that former critics, such as the CLC, will continue to argue that regulatory changes of the type proposed in this Bill further undermine media diversity in regional radio—a situation decidedly not in the public interest. Some may also add that the possibility that the national broadcaster and community radio may experience severe funding cuts, at least in the short to medium term, could further exacerbate the problem.

Media diversity

Interestingly, broadcasters have been divided on the efficacy of removing the 75 per cent rule. In their submissions to a Joint Select Committee investigating aspects of the previous Labor Government’s media reform package in 2013, television operators WIN Network and Network 10 supported retaining the rule, while other broadcasters, Prime, Southern Cross Austereo and Nine Network believed it was anachronistic.[113] Seven West Media, however, declared there ‘ha[d] not been nearly enough public debate about the implications of removing this rule and what should replace it if we do’.[114]

Network 10 representatives were of the view that if the 75 per cent rule was removed without taking other preventative action, the only guaranteed outcome would be less media diversity.[115] WIN representatives considered removing the rule would make it difficult for their network to continue its commitment to regional news and to regional communities and advertisers; one even foresaw ‘the end of regional television’ if the rule was rescinded.[116]

In opposition, Prime spokespersons argued that local licence conditions were sufficient to ensure that ‘material of local significance’ would continue on regional broadcasters. They argued further that the rule prevented commercial broadcasters from operating in the most ‘optimally efficient manner’.[117]

David Gyngell from the Nine Network was adamant that removing the rule was critical for the future of television. He argued that it was unfair for free-to-air broadcasters to be hampered by ‘nonsensical regulation’ about the percentage of the population they are able to reach, when the national businesses which had emerged with the rise of the Internet now delivered an ‘avalanche of content’ into Australian homes, unrestricted by conditions on what they can deliver and where they can deliver it.[118]

The Joint Committee set up in 2013 to investigate the 75 per cent rule recommended:

The Australian Government introduce legislation to abolish the 75 per cent audience reach rule, provided there is legislation or legally enforceable undertakings to safeguard local content in regional Australia.

Prior to the introduction of the legislation, a clear definition of local content needs to be established which ensures regional viewers have access to appropriate levels of high quality, locally devised, and locally presented programming.[119]

Those stakeholders in favour of removal of the 75 per cent rule will hardly be satisfied with what they are likely to conclude is only tinkering at the edges. For those who favour retaining the rule or replacing it with an alternative that can guarantee a certain level of diversity is preserved across the commercial media sector, grandfathering, which most probably will lead to the gradual increase of ownership limits, is unlikely to be seen as a solution. For those totally opposed to further reductions in ownership thresholds, the proposed change will be viewed negatively.

Schedule 9: legislative instruments changes

As the Explanatory Memorandum notes, this Schedule makes minor amendments to Schedule 4 of the BSA.[120]

Concluding comments

Some of the changes proposed in this Bill appear non-controversial. These endeavour to simplify what are complicated pieces of legislation by repealing references to the frameworks set up to guide ACMA in the transition from analogue to digital television transmission and the restacking processes which have followed the completion of transition at the end of 2013.

As recognised in the reasons for referral to committee statement, other aspects of the Bill are likely to be controversial. One of these involves changes to the current captioning rules. Already, the proposed changes have drawn critical comment from stakeholder groups which see the changes as a means through which government commitment to captioning programs for vision and hearing impaired people will be diminished.

It is likely also that other proposed changes will elicit criticism. Relaxing reporting requirements for eligible drama expenditure may be seen by some as a means by which subscription television licensees and broadcasters will be, at best, less diligent in ensuring that Australian drama quotas are filled. Similarly, changes to local content and population reach rules may be identified by critics as a means through which commercial broadcasters could further abrogate their responsibilities to the viewing public.

 

Appendix A: media diversity points

Points
Item	This ...	is worth ...
1	a group of 2 or more media operations, where: (a) a person is in a position to exercise control of each of those media operations; and (b) each of those media operations complies with the statutory control rules; and (c) if a commercial television broadcasting licence is in the group—more than 50% of the licence area population of the first radio licence area is attributable to the licence area of the commercial television broadcasting licence; and (d) if a commercial radio broadcasting licence is in the group—the licence area of the commercial radio broadcasting licence is, or is the same as, the first radio licence area; and (e) if a newspaper is in the group—the newspaper is associated with the first radio licence area	1 point.
2	a commercial radio broadcasting licence, where: (a) the licence complies with the statutory control rules; and (b) the licence area of the licence is, or is the same as, the first radio licence area; and (c) item 1 does not apply to the licence	1 point.
3	a newspaper, where: (a) the newspaper complies with the statutory control rules; and (b) the newspaper is associated with the first radio licence area; and (c) item 1 does not apply to the newspaper	1 point.
4	a group of 2 or more commercial television broadcasting licences, where: (a) each of those licences complies with the statutory control rules; and (b) more than 50% of the licence area population of the first radio licence area is attributable to the licence area of each of those commercial television broadcasting licences; and (c) the core/primary commercial television broadcasting services to which those commercial television broadcasting licences relate pass the shared content test in relation to each other; and (d) item 1 does not apply to any of those commercial television broadcasting licences	1 point.
5	a commercial television broadcasting licence, where: (a) the licence complies with the statutory control rules; and (b) more than 50% of the licence area population of the first radio licence area is attributable to the licence area of the commercial television broadcasting licence; and (c) none of the commercial television broadcasting services provided under the licence passes the shared content test in relation to any of the commercial television broadcasting services provided under another commercial television broadcasting licence, where more than 50% of the licence area population of the first radio licence area is attributable to the licence area of the other commercial television broadcasting licence; and (d) item 1 does not apply to the first‑mentioned licence	1 point.

 

 

Appendix B: ownership and control of commercial radio services

The following additional information is from the latest ACMA report on communications (2013).[121]

Table 1.8 Ownership and control of commercial radio services 

Network group company		Ownership and control
	Total commercial radio licences controlled	Licenses and operations
ACE Radio Broadcasters Pty Ltd	13	Mainly in regional Victoria, but also has one radio licence in the regional New South Wales licence area of Albury
Australian Radio Network Pty Ltd	12	Metropolitan radio licences in Adelaide, Brisbane, Melbourne, Sydney and Western Suburbs Sydney One regional radio licence in Katoomba Two joint-venture licences with DMG Radio, one in each of Brisbane and Perth, and two joint-venture licences with Southern Cross Austereo in Canberra
Illyria Radio Investments Ltd	10	Metropolitan radio licences in Adelaide, Brisbane, Melbourne and Sydney as well as one regional radio licence in Gosford Two joint-venture licences with Australian Radio Network, one in each of Brisbane and Perth
Fairfax Media Ltd	7	Metropolitan radio licences in Brisbane, Melbourne, Perth and Sydney
Grant Broadcasters Pty Ltd	42	Radio licences in regional areas of Australia
Macquarie Radio Network Ltd	8	Two metropolitan radio licences in Sydney Radio licences in regional Queensland (Charleville, Emerald, Kingaroy, Mt Isa and Roma)
Prime Media Group Ltd	10	Radio licences in the following areas of regional Queensland—Cairns, Gympie, Mackay, Nambour, Rockhampton and Townsville
Redwave Media Ltd/Seven Group Holdings Ltd	9	Radio licences in the following areas of regional Western Australia—Bunbury, Geraldton, Karratha, Port Hedland and Remote Commercial Radio Service Western Zone
Resonate Broadcasting Pty Ltd	5	Regional radio licences, two in each of, Longreach and Charters Towers and one in Warragul
Southern Cross Media Group Ltd	78	Metropolitan radio licences in Adelaide, Brisbane, Melbourne, Perth and Sydney Radio licences in various regional areas of Australia
Broadcast Operations Pty Ltd (Super Radio Network)	36	Radio licences mainly in regional areas of Australia, but also has one metropolitan radio licence in Sydney

 

 

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

 

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