A range of issues relating to the Bill was raised during the committee's
inquiry. The key issues related to:
- the cost effectiveness of the proposed black spot solution;
- the proposed copyright scheme;
- narrowcasters' access to the satellite platform; and
- the costs and impact of the proposed satellite scheme for
Cost effectiveness of the proposed black spot solution
Both Broadcast Australia and AUSTAR raised questions relating to whether
the government adequately examined the full range of possible solutions to
digital television black spots, and whether it has reached the most
In its submission, AUSTAR argued that it was 'surprised by preliminary
funding estimates to support this project'.
The government has estimated its costs for funding the satellite network to be
$40 million per annum, 'for the potential benefit of up to 247,000 households
Broadcast Australia, which is a commercial owner and operator of
approximately 600 terrestrial broadcast facilities,
questioned whether the appropriate balance has been reached by the government
between the conversion of existing terrestrial sites to digital and the
satellite platform. Broadcast Australia's submission argued:
...it is overwhelmingly in TV viewers' interests that digital
free to air TV services potentially available to homes from the satellite are
made available through local digital terrestrial transmission facilities –
unless it can be demonstrated it is simply not cost effective to provide the
full range of terrestrial digital transmission facilities to achieve this.
The committee questioned officers from the Department of Broadband,
Communications and the Digital Economy about what other solutions to digital TV
black spots had been considered, and the comparative costs and benefits of
alternative options. Mr Andy Townend, Deputy Secretary of Broadcasting and
Digital Switchover responded:
The government certainly looked at a number of different ways
of meeting the problem of signal deficiencies. You have probably heard from
most witnesses that any form of solution for signal deficiencies would require
a satellite solution. The satellite solution that has been formulated has been
designed to provide the maximum number of services to people in the most
Although the department declined to provide the committee with details
of the models considered, Mr Townend highlighted a number of times in his
evidence that a satellite system would be required regardless of which model
The committee understands that the government has negotiated the rollout
of digital television in regional and rural areas through it funding the
'fallback' satellite system, while allowing commercial broadcasters to make
commercial decisions about the cost-effectiveness of converting self-help sites
to digital. As Mr Townend explained:
...the government has been in negotiation discussions with the
commercial broadcasters themselves and not with Broadcast Australia. The
government has not had negotiations and discussions with service providers...As I
mentioned earlier, any solution for signal deficiencies would involve a
satellite element. The government has chosen to fund a satellite element—is a
fairly minimal satellite element—which provides the appropriate services to the
country without incurring any terrestrial costs, because that has been put on
the table by the broadcasters.
Accordingly, from a cost perspective, Mr Townend explained:
Rolling out additional terrestrial towers would have been
incremental to the cost of any satellite service. So it would not reduce costs;
it would actually increase the costs. The satellite service we are providing is
almost what you would call a de minimis satellite service, without any cost to
government of terrestrial rollout.
The committee is satisfied that the government has struck an appropriate
balance between terrestrial tower conversion and satellite re-transmission. It
recognises that in a country with the size and geography of Australia's there
will always be a need for complementary re-transmission infrastructure, sourced
from both terrestrial and satellite services.
A number of matters related to the statutory copyright licensing scheme
proposed by the Bill were raised by Screenrights and Free TV Australia.
Screenrights, which is a copyright society that currently administers a
number of statutory licensing schemes, including that under Part VC of the Copyright
Act 1968, on which the copyright scheme in the Bill is based, raised two
- the backdating of remuneration notices; and
- potential issues with the definition of 'broadcast' proposed in
Free TV raised more significant concerns regarding whether the statutory
licensing scheme proposed in the Bill is the most appropriate means of dealing
with copyright issues.
Backdating remuneration licenses
Proposed paragraph 135ZZZJ(3)(b) permits the backdating of remuneration
notices under the statutory licensing scheme, which Screenrights submitted is
'neither desirable nor necessary'.
Screenrights explained that the backdating of remuneration notices:
...is not desirable because it permits infringing conduct to be
made the subject of a statutory licence retrospectively, at the whim of the
infringer. It is not necessary because – consistent with Part VC – interim
arrangements are to be enacted in Part VD, Division 4.
In his evidence to the committee, Mr James Dickinson, Licensing
Executive, Screenrights, explained that he suspects the backdating provision
was 'picked up by the draftsman' in applying the provisions in the Part VC
licensing scheme to the new Part VD scheme.
Mr Dickinson argued that the backdating provision in the existing scheme was
intended as an alternative to transitional provisions, to ensure that copyright
holders would be remunerated for any period in which there was no declared
collecting society. Ultimately, however, transitional provisions were
introduced for the existing scheme so the backdating provision was not
Accordingly, Screenrights argued that the presence of transitional
provisions in the licensing scheme proposed by the Bill make the backdating
We see no need for the provision and we do think, perhaps, it
gives an unfair advantage in the hands of the satellite rebroadcaster.
In response to Screenright's concern, the Department of Broadband,
Communications and the Digital Economy informed the committee:
The backdating provision in paragraph 135ZZZJ(3)(b) is in the
same form as subsection 135ZZL(3) in the statutory licensing scheme for the re‑transmission
of broadcasts under Part VC of the Copyright Act. The Department is unaware of
any agreements made pursuant to subsection 135ZZL(3) of the Copyright Act that
have caused detriment to the interests of copyright holders.
The department also highlighted the fact that:
Under the Copyright Act, a party cannot be forced to agree to
a negotiated agreement if that party would prefer to seek a determination of
the Copyright Tribunal.
Definition of 'broadcast'
The Bill proposes to amend the definition of 'broadcast' in section
10(1) of the Copyright Act such that the satellite licensees are assumed not to
have a conditional access system applied to them. In its submission, Screenrights
argued that the amended definition may have the unintended effect of treating
the satellite broadcasts as 'free to air' broadcasts for the purposes of the
Act, which would leave them subject to the same re-transmission arrangements as
other free to air broadcasts.
Mr Simon Lake, Chief Executive of Screenrights explained the practical
effect of this:
...while the bill precludes the 38C satellite broadcast
licensee from retransmitting, the bill does not prevent the retransmission of a
38C satellite broadcast. Such a retransmission would have the effect of
allowing the 38C broadcast signals to reach far outside the limited access
intended by the conditional access requirements. This retransmission could
potentially subvert the existing regional commercial broadcast licenses.
The committee understands that the Bill's intention is not to allow
pay TV providers to re-transmit satellite broadcasts. However, the
question of whether or not the Bill would inadvertently allow such re-transmission
is obviously a complex statutory interpretation matter best resolved between
the department and its drafters. The committee recommends that the department
consider this issue and, if necessary, amend the Bill accordingly.
Appropriateness of statutory licensing
Ms Julie Flynn, CEO of Free TV Australia argued that there are more
fundamental problems with the proposed statutory licensing scheme. Ms Flynn
argued that the statutory licensing scheme is an inappropriate mechanism for
managing copyright issues should commercial negotiations fail:
The free-to-air broadcasters hate the retransmission scheme.
We do not like it in the pay TV environment and we certainly do not think it is
appropriate in this environment.
Instead of the statutory licensing scheme, Ms Flynn continued:
What we would like to see is a dispute resolution
mechanism...The sort of thing we are looking at is something that would say the
metropolitan licensees must provide programming content to the satellite
licensee upon request. The content will be provided in return for fair and
equitable remuneration on reasonable terms as agreed by the parties. If no
agreement can be reached, then someone like the Attorney-General, for instance,
may appoint an independent arbitrator to determine reasonable terms having
reference to all the relevant factors, including existing affiliation
agreements and other comparable commercial agreements.
In its submission, Free TV Australia also commented that one of the key
problems with the proposed scheme is that it is 'unnecessarily complex'.
Screenrights disagreed with that assessment, and stated that it supports:
...the current mechanism of having the Copyright Tribunal,
which is a division of the Federal Court, which is able to hear evidence on any
matter with regard to valuation. It has proven to be a mechanism which is able
to make determinations between parties as to the value of things.
However, Ms Flynn argued that:
...the Copyright Tribunal is very slow and does not, we
think, recognise the value of our services. We do not think that this is a
matter for retransmission. This is no different to any affiliation agreement
that currently exists.
In response to this issue, the department agreed with Free TV's
Commercial negotiation is the most appropriate and efficient
means of securing equitable remuneration for the supply of program content.
The department also stated that it 'expects' commercial broadcasters to
come to an agreement regarding the supply of content to the satellite licensee.
However, in respect of the method of resolving disputes between commercial
broadcasters and the satellite licensee when commercial agreement cannot be
reached, the department contended:
...the Copyright Tribunal, with its expertise and experience in
determining the value of the use of copyright material, is the most appropriate
independent body to adjudicate disputes between broadcasters where a commercial
agreement cannot be reached. The Attorney-General's Department has also advised
the Department that it is not aware of any precedent in Australian copyright
regulation for appointing an independent arbitrator that is not the Copyright
Furthermore, the department pointed out that:
...parties are not obliged to use the Copyright Tribunal. They
are free to nominate and appoint their own independent commercial arbiter if
they wish to do so.
The committee is satisfied that the model set out in the Bill for
determining the remuneration for the satellite licensees' use of content is
appropriate and fair. The model clearly prefers commercial agreement to be
reached between the satellite licensee and the relevant copyright holder.
However, in the absence of such agreement, the committee agrees with the
department's view that the Copyright Tribunal is the most experienced and
appropriate body to be appointed as an independent arbiter. There appears to be
no reason to divert from this established method of resolving disputes between
copyright holders and re-broadcasters.
Narrowcasters' access to the satellite platform
One of the principal concerns raised during the inquiry by a number of
submitters and witnesses, was the availability of the proposed new satellite
platform to narrowcasters including National Indigenous Television (NITV),
Westlink and the Rural Health Education Foundation. The operators of each of
those services expressed their concerns to the committee regarding the
government's lack of consultation with, and consideration of, narrowcasters in
the development of the Bill and its underlying policies.
For example, NITV submitted that:
Despite this scale of change, the Bill before the Parliament
is largely a construct developed by regional and remote commercial TV free to
air broadcasters, DBCDE and the government.
It has not derived from an open consultative process. The
Bill has not been guided in any way by the promised Discussion Paper and the
range of community and other broadcaster views and ideas such an open process
would have engendered.
Mr Ian McGarrity, Professional Adviser to NITV, explained that NITV's
principal concern is the fact that the Bill makes no provision for open
narrowcast services to be available on the new satellite platform:
It [the Bill] says not one word about TV open narrowcast
services...[G]enerally speaking at this stage there is no clarity from the bill
or the explanatory memorandum as to whether NITV could be on the satellite,
could get transponder capacity, at what cost and on what terms it could get
transponder capacity, whether the regional commercial entity set up to manage
this would allow us to be on the electronic program guide and therefore whether
NITV could be received through the same set-top box...
The committee recognises that many open narrowcast services provide valuable
services to remote and rural communities. For example, NITV 'provides a
nationwide Indigenous television service by cable, satellite and terrestrial
Ms Turner explained the importance to Indigenous and non-Indigenous Australians
of the service NITV provides:
I honestly believe that we have a significant role to play in
reconciliation through the education role that we play, in a way that is
probably more powerful than we have ever had in terms of a medium previously,
to influence the minds of Australians generally to grow the respect for an
understanding of our cultural heritage.
Similarly, the committee received evidence about the importance of the
satellite services provided by the Rural Health Education Foundation. The
...a number of satellite broadcasts each month, reaching many
thousands of rural and remote health professionals and their community members
each year, providing them with essential health and medical education, updates
These and other open narrowcast services are currently available on the
Optus Aurora platform, which provides a free-to-air satellite service for homes
in television black spots. The committee understands that Optus has indicated
that the Aurora network will be shut down in 2013.
Mr Townend, Deputy Secretary of Broadcasting and Digital Switchover,
Department of Broadband, Communications and the Digital Economy, suggested that
the likely shutdown of Aurora in 2013 means that there is plenty of time for
narrowcasters to explore alternative broadcasting options.
NITV argued that it is important that narrowcast services be included in
the new satellite platform prior to 2013 because otherwise NITV will be 'left
like a shag on a rock on the Aurora platform' between now and 2013 as:
...if you wanted to access NITV under this new arrangement you
would have to buy a separate set of cables and equipment in order to access one
The Rural Health Education Foundation expressed similar concerns:
It is clear that once the new digital satellite is launched
and operational, Aurora users will start to migrate to the new service, making
Aurora less and less attractive to users and viewers. Although it will not
disappear immediately, it will effectively become a very "lonely"
place as Australia's digital television switchover gathers pace. It is very
unlikely that many satellite consumers (homes or institutions) will wish to
utilise two different set top boxes, even if it is technically possible to do
so with the same satellite dish.
Ms Turner argued that:
If this bill goes through the House unamended and without
taking into account the matters we have raised, then we are left out of the
game. NITV cannot and will not be a part of the new arrangements without
However, officers from the Department of Broadband, Communications and
the Digital Economy argued that the concerns of narrowcasters are unfounded as
'there is nothing under the legislation that prevents NITV broadcasting on the
Dr Pelling also highlighted that:
Narrowcast licences...have a much greater degree of flexibility
than commercial licences in terms of where they can be provided and so on, and
those types of services are already provided as narrowcast services. As we
said, there is nothing in that bill [that] will stop narrowcasters.
Mr Townend also clarified that the design of the satellite platform
would not preclude narrowcasters:
It is also worth adding that there are currently no physical
constraints on the satellite platform for the carriage of [narrowcasters]
either. A deal has not been struck which would preclude NITV or other
narrowcasters being carried.
Mr Townend emphasised that, therefore, the decision by narrowcasters to
utilise the new satellite platform, as opposed to Aurora or any other satellite
platform, is a commercial consideration for each organisation.
In the case of NITV, its funding level is an issue for the Department of
Environment, Water, Heritage and the Arts.
In this respect, NITV was advised on 16 April 2010 that it would receive
an additional $15.2 million in funding for 2010–11. The government also
announced that it would conduct a review of NITV's funding, which would:
...explore options for the carriage of Indigenous
broadcasting content on new digital broadcasting platforms, including the
Government funded Viewer Access Satellite Television (VAST) service.
Ms Turner commented that:
I welcome the review from the point of view that there needs
to be a properly integrated policy framework for Indigenous broadcasting in
this country and I believe that that is what the review outcome should deliver,
including a robust future for National Indigenous Television.
The committee is satisfied that, as the bill deals only with
arrangements regarding licensed commercial broadcasters, it neither directly
deals with narrowcasters' access to, nor prevents narrowcasters from utilising,
the new satellite platform. The committee is of the view that it is appropriate
for narrowcasters to negotiate commercial access arrangements with the
satellite licence owner.
The committee urges the Department of Environment, Water, Heritage and
the Arts to consider in its review of NITV's future funding, the issues raised
by NITV regarding its importance to Indigenous Australians and the broader
Australian community, and also any difficulties that NITV accessing the new
Costs and impact of the proposed satellite scheme for households
Among the main concerns raised with the committee regarding the proposed
new satellite network was the cost of installing satellite receiving equipment
for households in regional and remote Australia. The three key issues relating
to households that the committee identified were:
- the cost of installation;
- the amount of equipment required; and
- how and when people will know if they require satellite
Cost of equipment and installation
The department advised the committee that:
...the government will provide a $400 satellite conversion
subsidy to eligible households, that is, those households currently served by
self-help transmission sites which are not to be upgraded by the digital
broadcasters. Details of the way in which this subsidy will be administered
will be announced in due course.
The amount of the subsidy was determined on the basis that:
- 'We would not expect...the cost of the set-top box and the card to
be more than $270'; 
'The satellite dish of 65 centimetres in diameter...would not be
expected to cost more than $100';
- 'The figures that we provided [to the minister] contain the best
estimates we can of what that kind of installation might cost', which amounts
to approximately $280 for installation.
Accordingly households requiring satellites are expected on average to
pay $650 for equipment and installation, of which $400 will be subsidised by
Ms Rebecca Heap, General Manager, Strategy and Programming, from AUSTAR
commented that this estimate:
...is obviously in the right ballpark. Everything depends on
the particular vendor and the particular relationships that you have, but this
is certainly a cost that feels right to us.
In addition, the committee was informed that the government is intending
to provide satellite equipment free of charge to 'age pensioners and other
When asked about whether a larger subsidy would also be available to more
remote households where the cost of installation might greatly exceed $280, the
committee was told:
One of the matters that remain subject to consideration is
the level of subsidy in more remote areas and, in particular, in remote
Indigenous communities. The government is currently considering the size of the
subsidy in those areas.
Amount of equipment required
The committee also heard concerns that households with existing
satellites connected to subscription TV services, such as AUSTAR, which also
wish to receive free TV via the new satellite service, will require an
additional satellite dish and set‑top box. This issue was raised by Ms
Heap from AUSTAR, who commented:
We do not want to inconvenience [AUSTAR's existing customers
by them] having to pay for a second satellite dish and set-top box, when our
set-top box should be completely capable of delivering that to them today.
Mr Townend, Deputy Secretary, Broadcasting and Digital Switchover,
Department of Broadcasting, Communications and the Digital Economy, agreed that
the new satellite service would create a situation where householders who
wished to receive both the full range of services available on the new
satellite network in addition to subscription TV, would require two satellite
dishes and two set-top boxes. However, Mr Townend argued that 'that would be
their choice, and that would be a completely separate matter'.
Notifying households of the need to
purchase a satellite receiver
The third and final issue of concern raised with the committee relating
to the impact of the scheme on householders was how and when householders would
be made aware that they reside in a digital TV black spot and will need to
install a satellite receiver.
During its evidence to the committee, the department discussed at length
the steps it is taking to inform households about the digital switchover, and
to assist them in installing the appropriate equipment. Mr Townend, Deputy
Secretary Broadcasting and Digital Switchover, Department of Broadcasting,
Communications and the Digital Economy explained that the department:
We have a team of people on the ground in Ouyen and Underbool
from 27 April who will be working with the local community to explain to
them that their new transmitters will be switching on during May.
The committee was told that the work being done by the department in
Ouyen and Underbool involves:
...local advertising, information campaigns and, more importantly,
community outreach activities...
Prior to the switch-over date, task force officers, beginning
in about [the beginning of May 2010], and staff from the Australian
Communications and Media Authority, supported by broadcasters, will be visiting
the Mildura Sunraysia area to run a series of information sessions and will be
working closely with local community organisations and antenna installers.
Furthermore Mr Townend indicated that:
Detailed advice will be provided to householders, business
owners, charities, antenna installers and retailers, with a focus on the last
few, who may have remaining difficulties switching over to digital reception.
Mr Townend commented that during his experience with the United
Kingdom's digital switchover, he learned that these issues are 'possible to
manage with adequate notice'.
Mr Townend informed the committee that, with the exception of the
Sunraysia region, the government anticipates being able to give 'plenty' of
notice to affected communities as 'the first area to be affected by this would
be regional Victoria, which is not switching until the first half of next
In response to a question on notice, the department indicated that:
It is anticipated that six months notice of conversion will
be provided to viewers who will receive their services from a converted
self-help facility at switchover.
It has not been possible to provide six months notice to
viewers that are reliant on the self-help facility in Underbool as switchover
is to occur in Mildura/Sunraysia on 30 June 2010 and broadcasters only agreed
to convert the facility early in 2010.
However, whether a self-help facility is to be converted to
digital, and the date on which the conversion is to occur, is dependent on
decisions made independently by broadcasters and self-help licensees. The
Department is working closely with broadcasters and once broadcasters and
self-help licensees have determined to convert a self-help facility will seek
to advise viewers as early as possible about their switchover options.
The committee is of the view that the subsidy offered by the government
is adequate, noting the special arrangements planned for pensioners and those
in remote areas; that the existing satellite pay TV consumers will be able to
choose whether or not to install a second satellite dish and set-top box to
access the new satellite service; and that the department's, ACMA's and
broadcasters' plans to inform consumers of the approaching digital switchover
appears to be sufficient.
The committee encourages the department to continually monitor the level
of information and engagement in the Mildura region to ensure that communities
are fully informed both during this initial switchover, and that any learnings
from Mildura can be utilised in future switchovers in other areas.
The committee notes the enormous importance of the satellite service
enabled by the Bill to rural and regional Australia. All witnesses and
submitters were ultimately in agreement on this issue. The satellite platform
will, for the first time ensure that there is equity between regional and
metropolitan Australia in terms of the free-to-air television services
The committee notes that it is simply not feasible to provide all
Australians with terrestrial digital television, and commends the government
for developing an equitable satellite solution, which is also cost-effective to
taxpayers as a result of the government's negotiations with commercial
broadcasters to fund the conversion of terrestrial broadcasting facilities.
The committee recommends that the Senate pass the Broadcasting
Legislation Amendment (Digital Television) Bill 2010.
Senator Anne McEwen
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