015/06

Meeting the Digital Challenge: Reforming Australia 's media in the digital age

The Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, today released a discussion paper on reform options for Australia 's media industry.

“Traditional media services are being challenged by new digital technologies and this is resulting in the emergence of new players, new content, new services and new platforms,” the Minister said.

“For the consumer, this means an ever-increasing number of new sources of information and entertainment. For the media sector, while this evolution poses challenges as audiences are attracted away from traditional media sources, it also presents significant opportunities to embrace new ways of doing business.

“For the Government, the impact of digital technologies means the current regulatory settings, which are largely designed for an analogue world, risk becoming outdated.

“In the end any media reforms must be about providing a richer and more diverse media environment for Australian consumers and that is why their views are important. So today I am releasing a discussion paper outlining options for a strategic framework for proposed reforms to the media industry in Australia .

“These reform options marry the Government's longstanding policy of changes to cross media laws in Australia and relaxation of the foreign ownership restrictions with reforms to ensure Australia will not be left behind as the world converts to digital.

“This process has not been one of conforming to any particular media player's view of the world. Instead it has been one of balancing the need for diversity and new and innovative services for Australian consumers now, with the need to equip Australia for the digital future.

“There is a compelling case for change and if the Government does not act, then there is a genuine risk that Australia will become a dinosaur of the analogue age.”

The Government is seeking comment on options outlined in the paper. Submissions should be provided by 18 April 2006, and be addressed to The General Manager, Digital Broadcasting and Spectrum Management, Department of Communications, Information Technology and the Arts, GPO Box 2154, CANBERRA ACT 2601.

Submissions may be provided electronically to trish.barnes@dcita.gov.au. Electronic copies of the paper are available at www.dcita.gov.au/media_broadcasting/consultation_and_submissions/media_reform_discussion_papers_submissions_closed.

KEY PROPOSALS

PART 1 - A ROADMAP TO DIGITAL CONVERSION

Digital Action Plan

The Government proposes to develop a Digital Action Plan in partnership with stakeholders to expedite digital conversion, bring the simulcast period to an end and achieve analogue switchover.

The Digital Action Plan would be released in 2006.

The proposed Digital Action Plan would contain:

• a roadmap to guide the process and a time frame for the closure of analogue television services in Australia;
• measures aimed at providing appropriate incentives to broadcasters, receiver manufacturers/importers and others to move to digital television;
• appropriate incentives and potential assistance that may be required for consumers to move to digital television; and
• the roles that various stakeholders and agencies would play in working together to achieve switchover, including the potential formation of a dedicated new organisation to oversee and co-ordinate the activities necessary to achieve analogue switchover.

The Digital Action Plan would recognise the different requirements for achieving analogue switchover in metropolitan and regional areas nationally.

It is proposed that the Digital Action Plan aim for an analogue switchover period commencing in 2010 to 2012, consistent with the targets set in many other industrialised nations and subject to the development of the roadmap.

PART 2 - ENABLING A DIGITAL ENVIRONMENT
2.1 NEW SERVICES ON SPARE SPECTRUM AND OTHER PLATFORMS

Fourth network moratorium

Preferred options :

• The moratorium on new commercial television licences, which expires on 31 December 2006, would not be extended.
• The Government will legislate to transfer the decision-making power for the allocation of new commercial FTA television licences from ACMA to the Government, consistent with its election commitment.
• No new licences for commercial FTA services in BSB spectrum will be allocated at the conclusion of the moratorium.
• Prior to the end of the simulcast period and in accordance with the Digital Action Plan, the Government will review whether additional FTA commercial television licences should be allocated using BSB spectrum. It is not envisaged that any new licences would be allocated prior to the end of the simulcast period.

New digital services on broadcasting spectrum

Preferred options :

• Two reserved digital channels of terrestrial spectrum would be allocated as soon as practicable in 2007 in markets for new digital services.
• From 1 January 2007, subject to licence requirements, options for these services may include subscription TV services, FTA niche ‘narrowcasting' services, as well as interactive and short video or ‘datacasting' services, whether delivered to fixed or mobile television receivers. They would not include a new FTA commercial television service.
• This would provide opportunities for new innovative digital service options of interest and value to consumers, rather than services that mirror traditional television services.
• Commercial and national broadcasters would continue to be permitted to provide datacasting services on their existing digital spectrum.
• The current prohibition on commercial and national broadcasters being able to control datacasting transmitter licences would be retained.
• The Government would consider what, if any, obligations or restrictions should be placed on operators of these new digital services and the manner in which the channels should be allocated. In doing so, the Government would have regard to the obligations and restrictions currently applying to FTA and subscription broadcasters.

New services on other platforms

Preferred options :

• The Government will legislate to transfer the decision-making power for the allocation of new commercial FTA television licences delivered outside BSB spectrum (such as wireless, satellite and broadband services) from ACMA to the Government.
• In considering applications for such licences after 31 December 2006 the Government will consider whether allocation is in the public interest. The process for allocating such licences will be considered further.
• Commercial FTA broadcasting services operating outside the BSB spectrum would be exempted from the media ownership and control provisions of the Broadcasting Services Act 1992 , at the same time as commercial BSB broadcasting services and newspapers are exempted.
• Commercial FTA broadcasting services operating outside the BSB spectrum would remain subject to general competition law and the Foreign Investment Policy provisions relating to ‘sensitive sectors' including the media.
• The Broadcasting Services Act 1992 would be amended to provide that the acquisition of rights to an event on the anti-siphoning list by a commercial FTA broadcaster operating outside the BSB would not satisfy the requirement that before a subscription TV licensee could acquire rights, a national or commercial FTA broadcaster must have acquired the rights or the event has been delisted.

2.2 EXPANDING SERVICE OPTIONS FOR EXISTING FTA BROADCASTERS

Consequences of analogue switchover

• Analogue switchover and the end of the simulcast period would provide a natural point, from both a practical and policy perspective, for further changes to the digital television regime.

Multichannelling

Commercial broadcasters

Preferred options :

• The current restrictions on commercial television broadcaster full multichannelling would be removed at the end of the simulcast period, consistent with the transitional nature of the current policy settings and the Digital Action Plan.
• The Government is prepared to reconsider the timing for relaxation of the restrictions on full multichannelling should there be any significant changes in the lead up to analogue switchover which alters the balance in favour of an earlier adjustment.
• Arrangements for the regulation of multichannels by commercial FTA broadcasters, including, for example, appropriate Australian content rules and captioning obligations, would be considered prior to the end of the restrictions on commercial television broadcaster multichannelling. In considering such arrangements, the Government would have regard to the obligations applying to other digital services.
• In the event the restrictions on commercial broadcaster multichannelling are removed prior to the end of the simulcast period, to maintain the integrity of the anti-siphoning scheme, commercial broadcasters would be prohibited from televising sport on the anti-siphoning list on any new digital channel unless the sporting event has already been shown (or is simultaneously shown) on the main service.
• Prior to the expiry of the anti-siphoning list on 31 December 2010 and the end of the simulcast period, the Government would review the ongoing rationale for the anti-siphoning scheme including the restriction on commercial broadcasters televising sport as set out in paragraph (iv) above.
  

National broadcasters

Preferred options :

• The genre restrictions on national broadcaster multichannelling would be removed as soon as practicable, upon passage of the necessary legislation.
• The Government would continue to monitor the issue of local content levels on the national broadcasters.
• To maintain the integrity of the anti-siphoning scheme, the national broadcasters would be prohibited from televising sport on the anti-siphoning list on any new digital channel unless the sporting event has already been shown (or is simultaneously shown) on the main service.
• Prior to the expiry of the anti-siphoning list on 31 December 2010 and the end of the simulcast period, the Government would review the ongoing rationale for the anti-siphoning scheme including the restriction on the national broadcasters televising sport as set out in paragraph (iii) above.

High Definition television

Preferred options :

• The current HDTV quota of 1040 hours per year would be retained until the end of the simulcast period, consistent with the transitional nature of the current policy settings and the Digital Action Plan.
• As an interim measure, from 1 January 2007, the Government could remove the requirement that the HDTV version of a digital television service be a simulcast of the SDTV service. This option would effectively allow FTA TV broadcasters to run one multichannel in HDTV in advance of switch-off.
• To maintain the integrity of the anti-siphoning scheme, broadcasters would be prohibited from televising sport on the anti-siphoning list on any non-simulcast HDTV channel unless the sporting event has already been shown (or is simultaneously shown) on the SDTV service.
• In the event the Government does not implement the option in (ii) above, regional broadcasters would be permitted to provide a single HDTV service throughout their licence area without the requirement for multiple local break-outs.
• Anti-Siphoning

Preferred options :

• Commencing 1 January 2007, a “use it or lose it” scheme would be introduced for events on the anti-siphoning list, based on the results of ACMA's first year of monitoring.
• The scheme would identify criteria against which “use” of an event by a FTA broadcaster could be measured and, if the event is not “used”, it may be removed from the anti-siphoning list.
• Ministerial discretion would be retained in respect of any decision to remove events from the anti-siphoning list.
• The ongoing rationale of the anti-siphoning scheme and the extent to which it is meeting its objectives, would be reviewed in 2009, prior to the new list expiring on 31 December 2010 and in the context of the end of the simulcast period. This review would also consider the restriction on commercial and national broadcasters televising sport on the anti-siphoning list on any new digital channel.
• The Government would continue to monitor the matter identified by FTA broadcasters as the “loophole” in the anti-siphoning regime.

2.3 MEDIA OWNERSHIP AND CONTROL

Foreign ownership

Preferred options :

• The current media-specific foreign ownership rules in the Broadcasting Services Act 1992 would be removed.
• The current newspaper-specific foreign ownership restrictions in the Foreign Investment Policy under Foreign Acquisitions and Takeovers Act 1975 would be removed.
• The media would be retained as a ‘sensitive sector' under the Foreign Investment Policy .
• Proposals by foreign interests to directly invest in the media sector, irrespective of size, would remain subject to prior approval by the Treasurer.

Cross-media transactions

Preferred options :

• The cross-media rules would be amended to allow cross-media transactions to proceed, subject to there remaining a minimum number of commercial media groups in the relevant market (four in regional markets, five in mainland state capitals).
• Existing limits on broadcasting licences would be retained: a maximum of two commercial radio licences in a radio licence area; one television licence in a licence area, and no more than 75 per cent national television reach.
• Public disclosure would be required when a media outlet reports on the activities of a cross held entity.

Regional services protections

Preferred options :

• A legislated requirement would be established for the continued imposition of licence conditions in key regional commercial television markets to provide minimum levels of content on matters of local significance.
• ACMA would continue to ensure there is genuine competition between regional radio licensees through the requirement that, following the sale of a commercial radio licence, if the program format of that service changes from one of broad appeal to one of more limited appeal, it considers the allocation of a new commercial radio broadcasting licence in that licence area.
• ACMA and the Government would continue to monitor the provision of local content in other television licence areas and on regional commercial radio services. The Government may consider extending licence conditions relating to levels of local content to those markets if local content levels decline materially.

Regulators' role

Australian Competition and Consumer Commission

Preferred options :

• Media mergers would continue to be subject to the general mergers provisions of the Trade Practices Act 1974.
• The ACCC would assess the competitive impacts of transactions, in accordance with the requirements of the Trade Practices Act 1974.

Australian Communications and Media Authority

Preferred options :

• ACMA would oversee the operation of the Broadcasting Services Act 1992 in relation to media transactions to ensure they comply with the ‘minimum number of media groups' requirement and the licence and reach limits.
  ACMA's enforcement powers under the Broadcasting Services Act 1992 would be enhanced to enable it to make more timely and proportionate responses to industry activity .

Timing

Preferred options :

• Media ownership reforms could take effect following automatic changes to the regulatory framework in 2007 that would also allow new licences for digital services on reserved spectrum to be allocated.
• Alternatively, media ownership reforms could be linked with the end of the simulcast period, in line with the Digital Action Plan.