Chapter 2Proposed prominence framework
Introduction
2.1Schedule 1 of the Communications Legislation Amendment (Prominence and Anti-siphoning) Bill 2023 (the bill) provides for the proposed prominence framework. This chapter begins by providing background information on the proposed framework. It then explores the need for the framework and evidence received in support for and opposition to it. The chapter then examines concerns regarding the scope and timing of the framework and concludes with the committee’s findings and recommendation.
Background information
2.2The proposed prominence framework aims to ensure that manufacturers of smart televisions (TVs) prominently display certain Australian TV services on new devices being supplied to the Australian market. This is intended to ensure easy public access to local TV channels in the streaming era.
2.3Australian free-to-air (FTA) television broadcasting services are considered vital for various reasons. As discussed below, they have legal and other obligations to provide access to local news and content, emergency broadcasting, nationally significant events,[1] and support the functioning of Australia’s democratic institutions.[2]
2.4When the bill was introduced, the Hon Michelle Rowland MP, Minister for Communications, outlined the Government’s rationale for the framework as follows:
FTA broadcasters ‘are not competing on a level playing field…they continue to be subject to the bulk of the obligations to deliver important public policy outcomes while their competitors are not’;[3]
‘FTA services…are becoming increasingly difficult for consumers to find’;[4] and
‘a significant portion of the Australian population lacks the skills and knowledge to install and engage with these services on newer devices’.[5]
2.5Should the bill pass, services which would be given prominence include those provided by the ABC, SBS, Seven, Nine and Ten and those provided via their broadcasting video-on-demand (BVOD) services: ABC iView, SBS On Demand, 7plus, 9Now and 10play. Under the framework, these are known as ‘regulated television services’.[7]
2.6Where it is unclear whether a service should be given prominence or not, the Minister would be given the power to determine whether that service should be elevated under the framework.[8]
2.7To be subject to the framework, equipment would have to meet the following criteria:
be capable of connecting to the internet;
provide access to BVOD services; and
be primarily designed for the purpose of viewing audiovisual content.
2.8For the purpose of the framework, these are called ‘regulated television devices’.
2.9Laptops, mobile phones, and tablets are not expected to be captured by the framework.[10] However, gaming consoles may be subject to the requirements, as explored later in this chapter. The requirements would not apply retrospectively to existing TV sets or other ancillary equipment, such as remote controls.[11]
2.10The bill would give the Australian Communications and Media Authority (ACMA) power to administer the framework, including determining whether a device should be subject to the scheme.[12] The ACMA would be able to develop guidelines to assist manufacturers and service providers to understand what devices would be captured under the scheme.[13]
2.11On 6 February 2024, draft regulations setting out the ‘minimum prominence requirements’ were publicly released.[14] The requirements specify that manufacturers of regulated television devices would have to ensure that:
regulated television services are pre- or auto-installed on relevant devices;
there is a single tile for each of these services visible on the primary user interface (UI); and
tiles are of similar size and shape to other comparable applications and located in the same area.[15]
2.12The draft regulations would also require that the electronic program guide (EPG) provides access to the regulated television services, lists the services using their logical channel number, and displays accurate information about the program.[16]
2.13The proposed prominence framework would not affect the search or customisation functions of a device.[17]
2.14According to Minister Rowland, the use of subordinate legislation for these requirements would allow them ‘to be adjusted over time to accommodate changes in technology and consumer preferences’.[18]
2.15Should the bill pass, manufacturers would have an 18-month transition period, after which they would be required to ensure that their prominence obligations have been met.[19] The bill would prevent manufacturers from charging fees to regulated television services to meet the obligations of the framework.[20]
2.16After three years of operation, the Minister would be required to cause a review to be conducted of the operation, effectiveness, and implications of the prominence framework. The final report of the review would be tabled in Parliament.[21]
Existing obligations of national broadcasters
2.17As regulated entities, Australia’s national broadcasters and commercial FTA broadcasters have obligations to the Australian public. These same obligations are not carried by paid television platforms.
2.18For example, the existing broadcasting obligations of Australia’s national broadcasters, the ABC and SBS, are defined in their relevant legislation, charters, editorial policies, and codes of practice.
2.19The national broadcasters have emergency broadcasting obligations to the Minister and must comply with a direction to broadcast matters in the national or public interest where directed to do so. They must also transmit warnings in text and speech where it has been requested by an emergency service.
2.20The ABC is required to broadcast innovative and comprehensive programs that contribute to Australia’s national identity, as well as educate and encourage awareness of Australia and an international understanding of Australian attitudes on world affairs. The ABC must also enable expats or travelling Australians to obtain information about Australian affairs, promote the arts in Australia, and provide digital media services.
2.21The ABC must also maintain an independent news service, and broadcast current events inside and outside of Australia on a daily and regular basis.
2.22The ABC decides what political or controversial matters are broadcast. The ABC has committed itself to ‘impartiality and diversity of perspectives’ and to ‘fundamental democratic principles including the rule of law, freedom of speech and religion, parliamentary democracy and non-discrimination’.
2.23For SBS, its principal function is to provide multilingual and multicultural broadcasting and digital media services that inform, educate and entertain all Australians, and, in doing so, reflect Australia’s multicultural society.
2.24SBS also has legal obligations to contribute to the development of language and other cultural skills, and promote understanding and acceptance of cultural diversity in Australia.
2.25SBS’s National Indigenous Television (NITV) service gives primacy to Aboriginal and Torres Strait Islander voices, interests, and perspectives. NITV reflects the diversity of Aboriginal and Torres Strait Islander peoples and features a range of views in its presentation of Indigenous perspectives.
Existing obligations of FTA commercial broadcasters
2.26Australia’s commercial FTA broadcasters have existing obligations as set out in relevant legislation, the commercial TV code of practice, various ACMA guidelines, and Free TV Australia advisory notes. Again, these obligations are not carried by paid television platforms.
2.27For example, commercial broadcasters that broadcast election matter during an election period must give reasonable broadcasting opportunities to all political parties contesting the election.
2.28Commercial broadcasters must ensure they have procedures in place to broadcast accurate and timely information in emergency situations, including consulting with appropriate emergency service organisations.
2.29Commercial broadcasters must also broadcast Australian content at least 55 per cent of the time between 6 am and midnight on primary channels, and 1460 hours of Australian content in a calendar year between 6 am and midnight on non-primary channels. Broadcasters must also meet minimum requirements for Australian children’s content.
2.30The commercial FTA broadcasters have similar obligations to the Minister and emergency services as the national broadcasters. For example, they must:
comply with a direction from the Minister to broadcast matters in the national or public interest where directed to do so; and
transmit warning in text and speech where it has been requested by an emergency service.
2.31Additionally, both national and commercial FTA broadcasters must:
ensure that, for political communications, authorisation for the communication are announced at the end of the broadcast; and
provide captioning services for their programs.
Support for the proposed framework
2.32For the reasons outlined above, a majority of submitters supported the introduction of the proposed framework, including the ABC, SBS, Free TV Australia, Seven West Media, Nine Entertainment, and Paramount (Ten), community tv and radio services, and various academics.[39]
2.33The ABC pointed out that the framework ‘is vitally important to our ability to perform our public service mission’, as well as support visibility of Australia’s emergency broadcasters on local devices:
We're relied on as the emergency broadcaster for the country, given our proximity and locality around the country, in over 60 locations. People get vital information through the news channel in particular. There's rolling coverage—that's what the news channel is for—to break into emergency [coverage] when we need to.
2.34Similarly, SBS welcomed the framework as a ‘progressive and crucial step’, noting that ‘Australian taxpayers should have unimpeded and easy access to public broadcasting content and services which they have funded’.[42]
2.35Free TV Australia was of the view that protecting the prominence of Australian broadcasters on local devices is a public policy issue which requires government intervention:
If the local networks aren't available on the screen and they are invisible and they can't be found, the advertising they provide is less valuable, which means that the services they provide can't be provided. This is a major public policy issue. This is Australian content, free Australian content, for Australians: news, sport, all the things that make Australia Australia. It's existential in that sense. That is why there is only really one solution to this issue, which is government legislation, because there has been a market failure.
2.36Likewise, Associate Professor Ramon Lobato and Dr Alexa Scarlata from the RMIT University supported the framework as it is ‘necessary to protect Australia’s national investment in public-service broadcasting and to ensure a fair and competitive marketplace’.[44]
Additional reasons for the introduction of the framework
2.37Several stakeholders, including FTA channels, community tv and radio services, and academics, gave additional reasons for the introduction of the proposed prominence framework, as follows.[45]
Increasing use of BVOD services
2.38The ABC explained that ‘67 per cent of Australian households had a smart TV’, that ‘smart TVs and other connected-TV devices have become the dominant way in which Australians access video-on-demand (VOD) services’,[46] and that since 2022, more Australians watch VOD services than broadcast TV. In the context of evolving consumption trends, the ABC argued that global smart TV manufacturers have become ‘gatekeepers’ of content.
2.39Free TV Australia noted that BVOD viewing of local FTA services had also increased significantly in recent years and that this trend was expected to continue:
Viewing via BVOD, or live streaming, compared to over-the-air terrestrial broadcast, is now about 20 per cent of overall viewing…That has significantly increased, as you can imagine, over the last two to three years, and we would expect to see that continue to increase by the end of the decade to about 50 per cent of viewing.
Some consumers are unable to customise apps
2.40Although VOD consumption is increasing, the committee heard that many Australians are unable to modify apps on their devices.
2.41For example, Associate Professor Ramon Lobato and Dr Alexa Scarlata at the RMIT University shared the results of a nationally representative survey it commissioned in 2022 of over 1000 Australian smart TV users. The survey found that a third of Australian smart TV users were unable to download apps and over half were unable to customise apps on their devices.[50]
2.42The RMIT University researchers explained that ‘[f]or these users, the apps that come pre-installed are likely to be the only apps they will ever use…for these users the positioning of apps as determined by the manufacturers and their commercial partners is likely to be permanent’.
2.43Additionally, RMIT University researchers, Associate Professor Lobato and DrScarlata, were concerned that around a third of Australian smart TV users had never used FTA BVODs on their TVs at all. Their submission contended that this may be because Australian FTA BVOD apps are currently ‘less visible, less accessible, and less frequently pre-installed than the leading US streaming video on demand (SVOD) apps’.[53]
2.44In light of the RMIT’s research, the ABC gave evidence that the prominence of on-screen icons has a ‘significant effect on the likelihood of viewers choosing to use a media service’.[54]
FTA channels are being priced out of the market
2.45Several FTA services supported the introduction of the framework to alleviate pressures arising from being required to compete in an increasingly expensive global market.
2.46For example, SBS outlined its experience with some of the practices of international smart TV manufacturers:
In June 2018, the manufacturer of the best-selling connected TV in Australia wrote to SBS and advised that unless we agreed to a 15 per cent revenue share arrangement and a placement fee, SBS would be removed from the app launcher on the TV homepage for that brand. When SBS refused to pay, the manufacturer carried through on their threat, making it much harder for audiences to find the SBS On Demand app. Then, in August 2020, that same manufacturer delivered the same demand, but this time threatening to take SBS On Demand off the platform entirely. It was difficult…to even find a representative in Australia for us to challenge this with; a reflection on how these companies are imposing their global commercial rent-seeking activities from thousands of kilometres away, with no regard to local audiences or the public interest.
In August 2023, we received notification from another platform operator, that unless SBS agreed to pay them 30 per cent of the revenue we derived from being on their platform, they would exclude us entirely. That platform operator has a market capitalisation of over US$1.7 trillion. It is frankly scandalous that these massive global tech firms can unilaterally insert themselves as gatekeepers between Australians and their free Australian content, trusted news and information, services that have been intentionally developed and underpinned by decades of public policy.
2.47The Managing Director of SBS, Mr James Taylor, explained that, as manufacturers control the app environments for their devices, services such as SBS On Demand require each manufacturer’s permission to be included in their version of the app store:
The threat we received was not to make it harder to find us in the app store; it was rather that, when someone typed in 'SBS On Demand', it would say, 'That app doesn't exist in our app store'. So each manufacturer has its own app environment. We have to develop our app and build our app for that app environment. I think we have 16 separate versions, effectively, of SBS On Demand…
2.48Mr Taylor argued that the current unregulated market is having a ‘corrosive impact’ and is a ‘free-for-all’ where ‘foreign entities…control what Australians see on their devices and can kick off a public broadcaster that has a particular remit to serve vulnerable and marginalised communities’.
2.49The ABC reported a similar experience with manufacturers:
Similar to SBS, in 2021, we lost preloading of our app on a major manufacturer and were asked for payment to restore it. And that's not the first time that has happened to us. On principle, we haven't paid.
2.50Similar evidence was received from FTA commercial broadcasters on a confidential basis. It demonstrated that leading device manufacturers threatened to remove apps from being preloaded and/or made available for download from app stores unless a significant fee was paid. In one instance, the fee was increased with no lead time for negotiation. Where broadcasters did not comply with payment demands, apps were removed from prime positioning and relegated to app stores.
2.51On a separate note, two commercial broadcasters gave evidence describing the competitive nature of the market. Seven West Media advised that, while it sometimes pays for positioning on devices, ‘[o]ften we're asked to pay, and it never comes to fruition because we get bid out of the market’ by pay or similar services. Likewise, Nine Entertainment advised that the cost of positioning had become prohibitive:
…the placement of your content at the front of the screen is a large part of what drives audience behaviour. It's like the positioning of products at the front of retail stores to sell a lot more of them. If you're at the front, you will get greater visibility and therefore you will get greater access…The cost of getting onto the front screen has been increasing over time…These deals being done offshore between big tech companies and big streaming companies are effectively taking away those spots. Not even if we wanted to pay a price could we get them. We've seen that, as competition has grown, those global deals have steadily pushed Australian content off the front screen, and we have no control over it.
Aerial connections are no longer installed in new builds
2.52FTA broadcasters also argued for the introduction of the framework to address a discrepancy between aerial connected properties and internet only properties. For example, Free TV Australia pointed out that under the current arrangements, new build houses will be left behind:
In the last five years there have been more than a million new homes built in Australia. In the next five years the government's committed to build another million. The one thing those two million homes are going to have in common is that not a single one of those will have an aerial. All of those people will be required to watch free television using their broadband connection. If we don't want to leave people behind, then we need to make sure that this legislation accommodates all of those people accessing free television over [the internet].
Opposition to the proposed framework
2.53Conversely, several submitters, including the Foxtel Group and the Consumer Electronics Suppliers Association (CESA), opposed the introduction of the proposed prominence framework for various reasons,[62] explored below.
FTA services are not difficult to find
2.54Foxtel rejected concerns raised by some submitters that local FTA services are becoming difficult to find, highlighting 2023 research from the Social Research Centre which found that 76 per cent of respondents found it was ‘easy’ or ‘very easy’ to navigate to linear FTA services[63] and 63 per cent said it was ‘easy’ or ‘very easy’ to navigate to FTA BVOD services.[64]
2.55Indeed, Foxtel pointed to 2023 research from the Social Research Centre which found via a consumer survey that ‘[t]he main reasons that respondents gave for finding it difficult to navigate to FTA services (either linear or BVOD) were that they had problems with signing in, passwords, or creating accounts’.
2.56Foxtel also rejected concerns regarding the long-term viability of FTA services, pointing to a 2023 report from the ACMA which found that FTA viewership had increased between 2021 and 2022 and that ‘Australians spent more time in 2023 watching FTA services than any other service’.[66]
2.57On a similar note, CESA argued that ‘there is no evidence that consumers find it difficult to navigate to local content or BVOD apps’. It pointed to a departmental survey conducted in 2022 which found that the main reason people watched FTA services was ‘that it is easy to access with televisions being ranked as the easiest device to navigate for both FTA TV and BVOD services’.[67]
The obligations are impractical and disruptive
2.58CESA, which represents the top five TV brands in Australia, raised concerns that the proposed prominence obligations would be impractical and disruptive for manufacturers to implement. CESA argued that there is not enough space on home screens to accommodate the proposed requirements without disrupting existing commercial arrangements:
Under the draft regulations, TV manufacturers must auto-download a separate app tile on the home screen for each of the five Australian free-to-air broadcasters. This is not possible on all current TV home screens as there simply isn't enough space to accommodate the five apps—possibly more, if you include community broadcasters and children's television apps—without disturbing existing commercial arrangements. This is why CESA is seeking alternative positioning options and a two-year lead-time to implement.
2.59CESA noted that the UK communications regulator, in relation to the UK prominence bill, had warned that giving identical prominence to all public service broadcaster services may not be practical considering the limits of home screens, and had instead suggested that all public service broadcaster services should be accessed from a single tile on the user interface (UI).[69]
2.60The potential future regulator of the framework, the ACMA, assured the committee that it would be able to consider existing commercial arrangements as part of its enforcement work:
Should the legislation pass, there'll be a process that we'll then undertake. As you're aware, we have some roles here in relation not only to guidelines but also to subordinate legislation. There'll be a period of time in which we work on those issues. The issue [of a company being forced to break a commercial arrangement] isn't an unusual issue for us in relation to enforcement. Where we have a new rule that we need to enforce against an industry, there's a process we go through. We have a graduated set of enforcement provisions here. We have the ability to accept an enforceable undertaking for them to correct situations and we can make remedial directions. The civil penalties are there but, yes, they're somewhat down the track; they're not necessarily on day one. We also take all matters into consideration when doing our investigations.
The obligations are too prescriptive
2.61CESA did not support the proposed minimum prominence requirement for a separate pre- or auto-installed app or tile of each regulated television service on the primary UI of regulated television devices.[71]
2.62CESA argued that the Australian prominence framework ‘goes well beyond the approach in the…UK bill’.[72] CESA explained that the UK bill only covers public service broadcasters, allows parties to enter into less prescriptive arrangements regarding positioning on the UI, and requires that such arrangements do not disproportionately restrict innovations in how users can select and access internet program services and content.[73]
2.63CESA warned that some TV manufacturers may abandon current home screen interfaces entirely if they become ‘irrelevant and annoying to customers’,[74] and that Australian consumers would be adversely impacted by the proposed changes, including higher prices, missing out on latest models, and poorer access to favourite apps.[75]
2.64At the hearing, CESA explained:
…noting that we [Australia] are one per cent of the global TV market…there are efficiencies in terms of scale…when they develop the global home screens, they will develop that and then do additional work to customise and modify it for Australia…it comes down, I believe, to the size of the market…if it is a one per cent market, you're spreading those costs across a smaller volume of products…
2.65Separately, CESA warned that future advancements in technology could pose difficulties for implementing the proposed obligations:
…with the emergence of smarter adaptive-type user interfaces, it may soon become impossible to comply with minimum prominence requirements. Adaptive UIs use AI technology to personalise home screen content to each user's preferences...home screens may not offer capability to auto-download any streaming apps…One essential amendment to futureproof the situation is an exemption from the requirements where a particular model includes no streaming apps on the home screen…It'll allow for the next steps in technology around the move to adaptive user interfaces...within the current framework of the legislation, we would be hamstrung in being able to do that.
Manufacturers already support access to FTA services
2.66CESA and Foxtel both opposed the suggested prominence obligations, arguing that manufacturers already support access to local FTA services.
2.67CESA explained that its members already support easy availability of Australian FTA services on their devices, including via:
display of a ‘Live TV’ tile on the home screen; and/or
one-click entry to the electronic program guide (EPG) that includes FTA programming; and/or
access to channels using the remote-control number pad or shortcut buttons; and
access to FTA BVOD services via the app store or other home screen search functions.[78]
2.68As such, CESA suggested that Australia should only require a single Live TV tile on home screens and for FTA BVOD services to be accessible from the app store.[79]
2.69On a similar note, Foxtel argued that manufacturers should be free to promote particular content or services, and they should not have to promote FTA BVOD services or follow strict tile positioning.[80]
2.70Foxtel argued that extension of the prominence scheme to FTA BVOD services is unnecessary. Foxtel submitted that the Government’s policy objective of ensuring that local news, sports, and emergency broadcasts are easy to find on connected TVs can be achieved through linear FTA broadcasting services only.[81] Foxtel suggested that the regulations should instead recognise that devices which already provide appropriate access to linear FTA television broadcasting services in their EPG satisfy the policy intention without the need to present them in linear channel number order.[82]
FTA BVODs should first be required to fulfil additional requirements
2.71Some submitters expressed concern that the content of FTA BVODs are insufficiently regulated yet are proposed to be given prominence under the proposed framework.
2.72For example, Foxtel pointed out that FTA BVOD services are not subject to the safeguards set out in the Broadcasting Services Act 1992 (Broadcasting Services Act). Foxtel explained that these safeguards outline content quotas, limits on advertising, news integrity requirements, and classification codes.[83]
2.73Mr Patrick Delany, Chief Executive Officer, Foxtel, elaborated at the hearing:
There are no obligations at the moment…there should be Australian-ness requirements. There should be net drama creation requirements. There should be a requirement that the BVOD, in some way, resembles the broadcast channel—which is where the licence emanates from—so that it either is a facsimile of the broadcast channel, has a percentage of the broadcast channel or is catch-up. With the way it is at the moment, one of these BVODs may have nothing Australian on it. It might have all-American material, but somehow it gets prominence. And there isn't a requirement to caption. There isn't a requirement for any of those things for the BVODs.
2.74Foxtel suggested that this could be addressed by removing FTA BVOD services from the bill or by requiring them to mirror the content in their associated linear channel.[85]
2.75In a similar vein, CESA argued that FTA broadcasters which would benefit from the legislation should be required to:
promote local and public interest content in any home screen content promotion area they control;
remove their sign-in requirements; and
offer, develop and maintain the apps for all manufacturers, and in accordance with manufacturers' specifications and device development timelines.
2.76Additionally, CESA argued that the framework should include reciprocal arrangements for broadcasters to ensure that manufacturers are provided with the necessary metadata to enable them to fulfil their obligations under the bill:
It really is a shared responsibility between the broadcaster and manufacturer. The obligations seem to be very one-sided to manufacturers and don't properly deal with what broadcasters are supposed to be doing to deliver prominence—and enable the manufacturers to meet their obligations.
2.77The committee heard that the ACMA had been in discussions with existing broadcasters regarding extending the codes of practice to incorporate their online services. The ACMA explained that while it did not have any powers in this respect under the Broadcasting Services Act (as it only applies to terrestrial services), it was ‘on the [Government’s] agenda’. The ACMA assured the committee that a large amount of BVOD content is already covered as it mirrors the associated linear content:
…it's not as an urgent issue now as it will be in the future, because the majority of the content on the BVOD services is coming off the linear channel, so it's being covered by codes of practice anyway. The rest of the content is covered by classification rules, so a large amount is covered. The news and current affairs, for example, is generally streamed off the linear broadcasts, so it's not in variation.
Response to manufacturers’ concerns regarding the proposed obligations
2.78In a joint response, Free TV Australia, the ABC and SBS, and technical expert, Mr Stephen Cleary, addressed several concerns that had been raised by CESA in opposition to the proposed prominence framework.
2.79In relation to CESA’s concern regarding evolving home screens, Free TV Australia, the ABC and SBS countered that, ‘if the Senate accepts CESA’s assertions about adaptive UIs transitioning to content rather than apps, this confirms how critical a broad prominence framework is to protect every Australian’s right to access their free‐to‐air services in a rapidly revolutionising digital world’.
2.80According to Free TV Australia, the ABC and SBS, all the proposed obligations can be implemented via software and server updates. As such, Free TV Australia, the ABC and the SBS rejected CESA’s argument that Australian customers will pay higher prices and miss out on latest models:
Given that the proposed changes can be implemented via software update and server configuration, it is not clear why this would impact the supply of hardware into Australia.While difficult to evaluate the cost without further information, it is acknowledged that there may be some minimal compliance cost. However, given our content brings users to their product and gives them utility, the commercial value they derive from our services far outweighs any compliance cost arising from these regulations.
In any event, manufacturers are already used to Australia’s unique requirements. For instance, Audio Leveling, Parental Rating, Logical Channel Number sorting, 7MHz channels (as opposed to 8MHz in most other markets) and [radio] frequencies. These requirements involve similar levels of compliance and have not prevented operation in the Australian market.
2.81Additionally, Mr Cleary rebuffed CESA’s argument that Australia’s prominence obligations are more prescriptive than those being considered or currently in place overseas. Mr Cleary gave details of the various frameworks in Germany, France, UK, and Italy, explaining that each of the schemes is unique but the Australian framework is not more prescriptive.
2.82In response to the suggestion to use a single tile on homes screens and provide access to FTA BVODs via app stores, Free TV Australia, the ABC and SBS pointed out that the intent of the bill ‘is to ensure viewers can access BVOD apps easily, without lengthy navigation and input journeys’.
2.83In response to concerns that the content of FTA BVODs is insufficiently regulated, Free TV Australia, the ABC and SBS submitted that broadcasters already work closely with manufacturers and software providers to meet requirements for content data and will provide the necessary data for the framework.
Scope of the proposed framework
2.84This section explores concerns raised by submitters regarding the scope of the proposed framework, including which devices and services should be subject to the framework, and whether the scheme should go further by regulating search results.
Which devices should be captured by the framework?
2.85Some stakeholders argued for expanding the scheme to capture current connected TVs as well as future devices.[95] For example, Free TV Australia and the ABC argued that, where possible, the framework should be applied to connected-TV devices already in Australian homes to ensure accessibility of free, local BVOD services in the greatest possible number of homes.[96] The ABC submitted that ‘there is no need to limit the scope of the prominence framework to devices manufactured in the future…it can and should be applied to all television devices in the country that are still receiving software upgrades’.[97]
2.86Other submitters argued for expanding the bill to cover mobile phones and tablets.[98] For example, the Australian Children’s Television Foundation (ACTF) drew attention to the ACMA’s 2022-23 report into media trends in Australia which found that 54 per cent of survey respondents used a mobile phone to stream content, followed by smart TVs (52 per cent), laptops (30 per cent), and tablets (22 per cent).[99] In light of this, the ACTF suggested that the bill be expanded to capture mobile phones and tablets or risk being outdated quickly by evolving viewing habits.[100]
2.87This was echoed in the submission from Janez Media, which argued that the bill takes a ‘piecemeal approach’ by focusing solely on smart TVs and ignoring other devices such as mobiles and laptops which are regularly used by Australians to consume BVOD content.[101]
Should video game consoles be exempt from the framework?
2.88The Interactive Games & Entertainment Association (IGEA) expressed concern at the inclusion of game consoles in the prominence bill, arguing that game consoles should be explicitly exempt from the proposed framework as their primary purpose is for playing games rather than watching TV content.[102]
2.89The IGEA argued that consoles:
represent a similar case to that of PCs, laptops, tablets, and mobile phones, which are expected to be exempt;
are explicitly omitted under the UK prominence scheme; and
in almost all cases, are already connected to smart TVs. Therefore their inclusion would create unnecessary duplication of obligations.[103]
2.90The IGEA warned that including consoles in the scheme could result in unintended adverse consequences for game developers and consumers as there is no ability to manufacture Australian versions of devices within global supply chains.[104]
2.91At the hearing, officials from the ACMA and the Department of Infrastructure, Transport, Regional Development, Communications and the Arts explained that the definition was constructed broadly due to the breadth and diversity of devices for viewing audio-visual content, as well as the need for flexibility as the market evolves. Officials confirmed that no devices including game consoles had been explicitly excluded, and that the ACMA has a direction making capacity to specify devices that are or are not regulated television devices in order to deal with outlier cases. Officials further noted that, should the legislation pass, exemption of consoles would be considered as part of the development of subordinate regulation.
Should community BVOD services be given prominence under the scheme?
2.92The joint submission from the Community Broadcasting Association of Australia (the CBAA) and Australian Community Television Alliance (ACTA) expressed concern that while community broadcasting services were captured by the prominence framework, community BVOD services were not assured prominence.[105]
2.93At the public hearing, Mr Shane Dunlop, President, ACTA, explained that there is one aggregated BVOD service known as CTV Plus for the community TV stations (channel 31 Melbourne and channel 44 Adelaide). Mr Dunlop argued that this service should be included in the proposed framework and that its exclusion had not been canvassed during the bill’s consultation:
Community television in Australia is a highly valued sector and much beloved by our diverse audiences. Our programs are almost exclusively original Australian content. In fact, our BVOD platform is 100 per cent Australian content. They're produced by an estimated 1,000 volunteers each week, with over 40 multicultural producers focusing on the needs of underrepresented and underserved communities…Like other free-to-air broadcasters, our audiences are shifting away from terrestrial platforms to BVOD and we need to be there for them…exclusion from the BVOD regulated services was not something that we were consulted on.
2.94CBAA and ACTA argued that, should the bill pass, this omission would have a significant impact on community broadcasters as ‘Australian audiences are increasingly adopting BVOD services’ and there is a ‘significant decline in live FTA viewing’.[107]
2.95Officials from the ACMA and the Department of Infrastructure, Transport, Regional Development, Communications and the Arts, explained that the CTV Plus app had been accommodated in the bill. It stated that this app had been treated differently from other BVOD apps under the framework because:
…Channel 31 in Melbourne is a community television broadcasting licensee and Channel 44 in Adelaide operates under a narrowcasting license. It isn't intended under this framework that it provide prominence for narrowcast services, which are typically more niche services or located in a specific region…there's capacity for the minister to designate or determine that certain services are or are not regulated television services.
If Channel 31 had its own BVOD app then one would assume it would follow through.
Should the prominence framework be extended to include radio services?
2.96Commercial Radio and Audio (CRA) argued that the prominence framework should be extended to include radio services.[110]
2.97CRA pointed out that radio services are sometimes the only source of news in rural and remote locations as well as during natural disasters, and that Minister Rowland had recognised that radio access is equally as important as television access.[111]
2.98At the hearing, Mr Peter Colosimo, Director, CRA, highlighted the importance of ensuring Australian radio prominence and discoverability:
Radio is facing the same pressures as television, with declining advertising and increased competition from streaming…Radio provides access to Australian content, sporting teams, news and, importantly, emergency services and information…
We have 260 stations across Australia, and 220 of those are in regional and remote areas. Many of those areas no longer have any local content or news served up, particularly following the closure of many regional print outfits. Our regional stations have comprehensive regulations in terms of the local content that they provide: they need to provide three hours of local content per day during peak listening hours. There are also obligations for Australian music and new Australian music, and, for a certain section of stations who have been affected by changes of control, there needs to be 12½minutes of local news per day…
2.99CRA sought obligations similar to those being considered for smart TVs via the proposed prominence framework, including: ‘must carry’ obligations and prohibit any advertising or content not agreed by the broadcaster. MrColosimo suggested that the obligations should initially apply to smart speakers with inbuilt flexibility for future expansion to cars and other devices.
2.100According to Mr Colosimo, only software updates would be required to implement the changes:
We're not seeking to force hardware changes on smart speaker manufacturers; all that would be required are software changes. The regime would target software and smart speakers…Such software changes should be straightforward and implemented quickly at very little cost to the manufacturers of smart speakers.
2.101Mr James Penprase, Assistant Secretary, Department of Infrastructure, Transport, Regional Development, Communications and the Arts, explained that radio services had not been included in the prominence framework but would be considered as part of ongoing reform. He explained the basis for this decision:
The priority from the get-go with prominence was around developing and implementing a prominence framework for television services. That was the government's election commitment and that's the measure that's implemented, or would be implemented, through this bill. However, consideration is and will be given to radio prominence. There are some parallels between radio and television. There are also some points of difference as well, particularly in the way the technology operates and the supply chain works for radio services. Nonetheless, the government has indicated that it will consider radio in the next phase of reform as part of a broader and longer-term reform program…We are currently developing a consultation paper on radio prominence, to be released as soon as we can get a product that is settled and developed. An important point is that, for television, the potentially affected the parties, particularly television manufacturers and also others, have had the opportunity to contribute to two phases of consultation. Those that might be affected by a radio prominence framework—car manufacturers and smart speaker manufacturers—have not. So, if amendments were to be moved in relation to radio, that would truncate the ability of those parties to express a view on a particular proposal or develop particular options. The idea of moving to a consultation paper phase and to develop or consider developing something for radio from that point is the proposal as it stands.
Should the scheme regulate search results?
2.102Some submitters, including the ABC and SBS, argued that the framework should go further by requiring FTA content to feature prominently in search results on regulated devices.[117]
2.103The ABC explained that, while it provides data about the programs on ABCiView to connected-TV platforms to improve their discoverability, it ‘has no control or visibility over how those programs will be displayed in search results’.[118] As such, a search for the children's program ‘Bluey’ on different devices may yield links to either paid options for viewing the show or YouTube clips before the free episodes on ABC iView. Additionally, results in the first two categories may not be child‑appropriate.[119]
2.104At the hearing, the ABC Managing Director, Mr David Anderson, argued that:
We're talking about locally produced content that is otherwise freely available to the Australian public that should be prioritised—that should be elevated. In the case of the ABC, I'd say the Australian public have paid for this [Bluey] and it should be elevated first.
2.105Similarly, SBS called for ‘FTA broadcaster services and content…[to] have prominent treatment in any search, recommendation, or discoverability tools’ to effectively address negative audience impacts arising from existing and emerging commercial practices and industry settings.[121]
2.106Likewise, Free TV Australia noted CESA’s evidence regarding the development of non‐app-based interfaces, arguing this ‘underlines the necessity for the bill to enable prominence requirements to be made for search and recommendation functions in the future’. Free TV Australia recommended including a power to make regulations with respect to search and recommendations.
2.107Oppositely, some submitters argued against regulating search results, including Foxtel, Netflix, and the Australian Subscription Television and Radio Association (ASTRA).[124]
2.108Foxtel argued that it has for many years integrated FTA content into search results,[125] and that its search results were driven by relevancy and ensuring the best customer experience rather than by providers of content.[126] Foxtel argued that it had invested significantly into its own devices and that it would be contrary to government policy of ‘ensuring a level playing field for Australian media businesses’ to now require Foxtel to prioritise third party content on its own devices where a Foxtel customer had chosen to pay to be able to access Foxtel content on a Foxtel device.[127]
2.109In a similar vein, ASTRA argued that the framework should not constrain the ability of manufacturers ‘to promote, preference or recommend particular content or services to users, including their own-brand content and services’.[128]
2.110Both Foxtel and Netflix warned that regulating search results may have adverse unintended consequences. For example, diminished viewer experience and inhibited consumer choice,[129] as well as significantly reducing access to Australian content (as streaming services invest more into children’s content than commercial broadcasters—$70.7 million versus $17.1 million since 2019‑20).[130]
2.111At the hearing, Ms Carolyn Hough, Chief Executive Officer of Policy Australia; and Policy Adviser to Netflix, argued that it would be ‘quite unfair’ to creators involved in making Australian movies ‘if only Australian movies that are on free TV are surfaced in those search results’.
How long should manufacturers have to transition?
2.112As mentioned earlier, manufacturers would have an 18-month transition period, after which they would be required to ensure that their prominence obligations have been met.[132]
2.113Some stakeholders, including the ABC, SBS, and Free TV Australia, argued that the 18-month lead in time is unjustified and would unnecessarily delay the benefits of the bill.[133]
2.114At the public hearing, the Managing Director of SBS, Mr Taylor, explained his concerns about the 18-month period:
In the next 18 months there will be general elections in United States, in the UK and in Canada, and Australians will go to the polls in the first half of 2025. Surely, we want Australians to have access to the kind of trusted impartial news and information that SBS and also the ABC provide, so that they can understand the issues and participate fully in democratic process.
ABC iview and SBS On Demand could be kicked off these connected TV platforms at any time, hence this legislation is urgent. Sixty-seven per cent of SBS On Demand consumption comes via connected TVs.
2.115Free TV Australia explained that it had commissioned an expert report into the feasibility of implementation of the prominence requirements for manufacturers which identified that some requirements could be implemented within one month and the remainder within six months.[135]
2.116Indeed, the ABC highlighted that the same expert report had advised that all the prominence requirements could be implemented through software updates rather than physical changes.[136]
2.117In light of this, some submitters, including Free TV Australia and SBS, argued that the bill should empower the Minister to make regulations regarding the appropriate timeframe for each prominence requirement and that all obligations should commence within six months of the bill’s assent.[137] This suggestion was echoed by the ABC which noted that German prominence legislation had set a six-month transition timeframe.[138]
2.118Meanwhile, Professor Lobato pointed out that manufacturers should have been aware of proposed prominence obligations for some time now:
One thing to note is that several jurisdictions are moving towards prominence rules, and others will follow. This has been on the agenda for at least two years in Australia, and in the UK and Europe for a decade…So there has been time to prepare for these eventualities.
2.119Oppositely, Foxtel argued for keeping the 18-month lead in timeframe,[140] while CESA argued for a two-year lead in time ‘to allow sufficient time for adaption of planned UIs and app development and integration’. CESA explained that the most cost-effective way to introduce new requirements is at the start of a development cycle which can take between two and three years.[141]
2.120At the hearing, the CEO of CESA, Ms Soud, outlined the industry’s request for a two-year lead in time:
The justification for manufacturers is…that it is always much better to include these sorts of software changes or updates as part of the normal development program. You've got the teams configured, you get the input and you've got the full test program happening…If you're doing it as an ad hoc change and then try to pull in different experts and get them to work on it and then test it in circumstances where maybe test platforms or development platforms may no longer be available, that gives rise to the risk of issues arising. There are a lot of other operational factors as well. You've got manufacturers that are now, at this point in time, locked into their product development and design for 2025 models…
To then start to tell them, 'Oh, no, you've got to now go back and pull it together'—those development teams that have worked on those products have now gone and been allocated by overseas manufacturers to work on other projects and are now developing 2026 televisions. Do you pull them off those projects to then develop app dates for prominence for Australia?...
We've got manufacturers and members that are dealing with…overseas manufacturers, but there's also the added complexity where they are dealing with third-party development platform providers. You've got Google and things. They are then at the mercy of those third-party partners as to whether they will prioritise and allocate the resources to do the work that is required to deliver the prominence requirements in a months’ time or six months’ time. We have checked across all of our members and they have consistently and unequivocally said that is just not going to be able to happen.
2.121In response to questions on notice, CESA advised that it may not be possible for the manufacturers of all models to comply with the prominence framework via a combination of server configuration changes and software updates:
…while changes can be implemented via server configuration and/or software updates for some models, other models with lower memory may need hardware modifications to add 5 further apps to the homescreen. This hardware modification requirement will affect entry point models with lower memory for some manufacturers.
Additionally…even for models where changes can be made via server configuration and/or software upgrade, it is critical to understand that adding 5 new apps or another app row/ribbon is a major, time consuming and costly change with impacts on Australian consumers.
There is an additional complication for TV manufacturers that use the operating system of a third party as they need to get the consent of the third party operating system provider for the homescreen changes. For those suppliers who import and distribute ‘off the shelf’ televisions there is a significant risk that consent will not be provided. Consequently, these distributors will have no option but to withdraw televisions from the Australian market.
2.122 CESA rejected Free TV Australia’s suggestion that server configuration changes could be implemented within one month and software updates could be implemented within six months of the commencement of the bill:
These timings are not feasible from technical, commercial or other perspectives and they fail to recognise that these regulatory changes involve major, multi-step internal processes for each model, as well as additional processes and permissions for manufacturers who rely on third party operating systems’.
2.123CESA pointed out that manufacturers will also require the release of the ACMA’s guidelines which are unlikely to be available in one to six months.
2.124CESA argued that requiring the prominence obligations to be implemented in less than 18 or even 24 months’ time will ‘constrain the ability of manufacturers to maintain and expand commercial arrangements with international streaming services for positioning on devices’. This is because ‘the requirement to include 5 or more individual free to air BVOD tiles on the streaming app menu means that future commercial arrangements will be more limited’.
2.125Similarly, Fetch TV gave evidence that, while it would be easy and quick to change the sequencing of an app on its platform, changes to Fetch TV’s navigational architecture would require a ‘redesign [of] the entire system’. As such, Fetch TV argued that ‘we need to be very careful about how we draft this regulation’, suggesting that the legislation should be principles based to ensure the ACMA had flexibility to adjudicate where appropriate.
2.126In response to CESA’s claim that implementing prominence obligations sooner than 18 months will require workforce reconfiguration, Free TV Australia, the ABC and SBS argued that:
Manufacturers do what is convenient for them and best suits their pursuit of profit…the way that teams are constituted and deployed is always changeable as multiple projects evolve, expand and are discontinued. It is not unusual for manufacturers to reconfigure their workforce and project planning…to suggest that a software update would require such a long lead time is disingenuous.
2.127Officers from the Department of Infrastructure, Transport, Regional Development, Communications and the Arts, explained why the 18-month transition period had been proposed:
A prominence framework in Australia is novel…That in itself dictates perhaps a more prudent approach to an application time frame…The second point is that we are talking about global supply chains here…The long lead time involved in the design, development, marketing, sales and distribution of products has been a factor which has been considered…The third point is perhaps more practical: the regulator will need time to develop the set of legislative instruments that provide the next level of detail for the prominence framework, which I mentioned before. They will need to be worked up, consulted with industry and settled…
2.128Officials from the ACMA indicated that a six-month period would be too short, from the regulator’s perspective:
I wouldn't want to put a date on it in the sense that we are mere servants; we will meet the timetable that we are given. But I would say that it isn't something which we'd be able to do in a very short period of time. I think that six months is really unrealistic. Once we get to consultations—it isn't just about us managing to go out to consultation; we have to give the industry ample opportunity to consider these matters…There is considerable work to be done there, so I wouldn't want to put a timetable on it, but 18 months would be nice as far as we're concerned!
Perspectives on the draft regulations
2.129As mentioned in Chapter 1, on 6 February 2024, draft regulations outlining the proposed minimum prominence requirements were publicly released.
2.130The committee sought supplementary submissions from submitters to understand their views regarding the draft regulations. Submitters sought greater clarity and more precise phrasing. For example, the Australian Children’s Television Foundation sought ‘clarity around what constitutes the primary UI of smart television devices’.[151] Meanwhile, SBS was concerned that the language used to specify the requirements was insufficiently precise and could be ‘read down’ by manufacturers. SBS suggested that, rather than terms such as ‘visible’, ‘similar size’, ‘located in the same area’, ‘visual representation’, and ‘readily accessible’, the regulations should stipulate that FTA services should simply be required to be as prominent as other comparable apps.[152]
2.131Additionally, SBS expressed concern that, while the requirements seek to ensure that the SBS On Demand app is present and visible from start up on the primary UI, there are many design layouts being used by manufacturers. Therefore, the regulations should be more precise, requiring that FTA BVOD services be ‘visible without scrolling or navigating away from the first visible representation of the primary UI upon start up’.[153]
Committee view
2.132Australia’s television landscape has changed dramatically in recent years. Modern consumption trends and evolving technology has already left a significant portion of the Australian population reliant on default device settings dictated by large multinational companies. Often these settings are determined by lucrative commercial arrangements between large overseas device manufacturers and global streaming companies, and significantly diminish the accessibility of local FTA services.
2.133The committee heard evidence that free Australian content, emergency broadcasting and news services are at real risk of becoming victim to confidential agreements between global players, making them even more difficult to find on Australian devices. Local FTA services are under significant commercial pressure from global technology giants to have their icons visible and/or accessible.
2.134The committee acknowledges the support that will be received by FTA services from the proposed prominence framework, including that it will address a significant imbalance between global manufacturing companies and Australia’s free to air broadcasters.
2.135The committee agrees it is vital that Australia’s free-to-air broadcasters, which serve a wide range of diverse communities across Australia, remain prominent on devices being sold in Australia.
2.136While the proposed prominence framework will give national and commercial free-to-air broadcasters some advantage, these services have a range of existing and ongoing obligations and content requirements to deliver Australian and international news services, emergency information, local, multicultural and children’s content, and support the functioning of Australia’s democratic society. Such obligations are not borne by paid platforms.
2.137The committee heard concerns that the regulation of search functions should be included in the prominence framework, and considers this to be an important issue warranting further analysis. The committee notes the issue is novel, contested, and that potentially altering the operation of search functions or content recommendation is subject to competing claims and interests. The committee notes that the prominence framework seeks to ensure that Australians can readily access free-to-air TV services on connected TV devices, and will be reviewed in due course. In the meantime, the framework does not prevent Australian free-to-air broadcasters from negotiating with manufacturers to advertise or promote programming or content on connected TV devices.
2.138The committee acknowledges concerns raised by submitters regarding the proposed prominence obligations. However, it is not convinced by evidence that the obligations will be overly impractical. Industry has been consulted twice on the proposed changes and did not provide convincing evidence that an 18‑month transition period is required to deliver the changes. The committee notes that while six-month transition period is likely to be too short the changes could reasonably be delivered earlier than 18-months.
2.139The committee heard evidence regarding the variability of ease in implementing the proposed prominence obligations on different models of television. Consideration of a faster implementation where the implementation required is software or server updates would seem reasonable.
2.140The committee is of the view that the Australian television broadcasting environment is a rapidly changing industry that is subject to technological disruption. This makes the work of the Australian Communications and Media Authority and the use of delegated legislation so important.
2.141On balance, the committee is of the view that there is scope for the prominence framework to be implemented in a shorter timeframe than designated in the bill.
2.142The committee recommends that the Minister for Communications and the Australian Communications and Media Authority consider options for a phased approach to the proposed prominence framework and or a reduction to a 12-month timeframe.
2.143The committee notes the evidence that video game consoles may be covered by the proposed framework as currently drafted, but the basis of this is to capture a broad definition with flexibility to cover the breadth and diversity of devices in the market, both now and into the future. The committee suggests the Minister consider the merits of expressly exempting this category of devices from the prominence portion of the framework. The committee notes that no other category of device is excluded, but the explanatory memorandum does indicate that the intent of the definition would not be to capture mobile phones or tablets.
2.144The committee notes concerns regarding the treatment of the community TV app CTV Plus, however, it agrees that the department’s approach of empowering the Minister to make a determination that CTV Plus is a regulated television service for the purpose of the prominence framework is appropriate given the different licencing and company arrangements in place for community television.
2.145The committee heard concerns that radio prominence should be considered as part of this bill. The committee heard that the Government is developing a consultation paper on radio prominence and that a comprehensive consultation process will be undertaken with stakeholders in due course. The committee is of the view that swift action could be taken in relation to certain devices such as smart speakers, although others will take a longer timeframe, such as the impact on cars.
2.146The committee recommends that the Minister for Communications request that the Department of Infrastructure, Transport, Regional Development, Communications, and the Arts prioritise the implementation of radio prominence on devices such as smart speakers.
2.147Regarding FTA BVOD services, the committee heard concerns that their content may not be sufficiently regulated yet these BVODs are proposed to be given prominence under the framework. The committee notes evidence from the ACMA that currently BVOD content largely mirrors that of the linear channels. However, the committee agrees that regulation may be needed for FTA BVOD services and acknowledges that this issue is on the Government’s media reform agenda. The committee recommends that the Minister for Communications amend the bill to extend free-to-air codes of practice to online services, and that the Government prioritise consultation with stakeholders to include BVOD services as part of the co-regulatory framework for broadcast regulation in Australia.
2.148The committee recommends that the Minister for Communications amend the bill to extend free-to-air codes of practice to online services.
2.149The proposed framework would apply to BVOD apps and the online streams that are available to audiences through those apps. This means that those BVOD apps would be subject to minimum prominence requirements, including that they be located on the home screens of devices and pre- or auto-downloaded. However, the framework would not impose requirements on manufacturers in relation to online streams outside of the BVOD apps, including their inclusion in any electronic program guides (EPGs).
2.150The prominence framework is designed to address clear risks with respect to the availability of free-to-air broadcasting services. While EPGs were raised during the inquiry, there is little to suggest that there is a prominence problem at present. Should online EPGs further develop and a prominence issue with the availability of the broadcasters’ online streams arise, the prominence regulations could be used to develop specific requirements.
2.151Should the bill pass, the review of the prominence framework would not occur for almost five years. The nature of a fast-paced disruptive industry that is undergoing rapid technological change may indicate that an earlier review is warranted, noting that sufficient time would be required to understand the impacts of the current reforms.
2.152The committee recommends that the Minister for Communications, on advice from the Department of Infrastructure, Transport, Regional Development, Communications, and the Arts amend the bill to allow the review of the prominence framework to be conducted within two years of implementation, as necessitated by rapid technological change.
2.153Either before, or as part of the review, the Minister for Communications should consider the broader landscape in which Australian free-to-air services operate, as well as other reforms in the broadcasting industry, the evolving role of the internet, online service provision, and changing consumer behaviour.
2.154The committee recommends that the Minister for Communications consider, either before or as part of the prominence framework review, other related reforms in the industry, to reflect the growing role of the internet, online service provision, and consumer behaviour.
2.155Ease of consumer access to free-to-air platform content was raised throughout the inquiry, with manufacturers expressing that the issue was not an inability to find Australian free-to-air apps on devices but the difficulty of requiring an account and password to each service. In light of this, the committee suggests that the Australian free-to-air television services consider options to simplify their user account requirements.
2.156The committee recommends, subject to the recommendations contained earlier in this chapter, that the prominence provisions of the bill be passed.
Next chapter
2.157The following chapter explores the proposed anti-siphoning reforms, key issues raised by submitters, and concludes with the committee’s view and recommendation.