The report is very useful for anyone practicing in media law, particularly media M&A because it contains a comprehensive review of media companies active by platform and radio licence area. Effectively, the report functions as a great ‘ready reckoner’ for anyone looking to get a ‘quick and dirty’ view on potential issues created by a potential media deal under Australia’s existing cross media ownership laws.
In addition, the report provides commentary around which deals might become possible if certain of the existing rules were scrapped. For example, the report comments that the abolition of the existing 75% rule could result in consolidation in the free-to-air television sector, with one of the metropolitan networks (Seven, Nine and Ten) combining with one of the affiliated regional networks (Prime, WIN and Southern Cross Austereo) whereas repeal of the 2 out of 3 rule may not, of itself, result in any consolidation.
Time for change?
The report’s purpose is not to replicate “Bing or Google Lawyer”. Rather, the report seeks to describe the existing rules applying to media ownership in Australia, compare those rules to other media ownership regimes, and raise two fundamental questions: is change required to the existing regime in Australia, and if so what should that change be?
The paper’s answers to these questions are (in essence):
- Yes: change is required to enable regulation to focus on media outlets (including online outlets) rather than media platforms (as the current laws do). Under the previous Federal Government the catchphrase for the driver for change was ‘media convergence’ but this phrase (and the previous Government’s policy work in this area) is not referenced;
- Hard to Say: the paper postulates that there is no clear basis for measuring levels of media plurality across media platforms.
Is there any requirement for media diversity rules?
However, there may be a more fundamental question that deserves airing, and that is whether regulation to preserve or ensure plurality is required at all.
The report notes that the key policy concern around preserving a plurality of media voices is in maintaining a sufficient number of diverse voices in news media, given that genre’s role in shaping political debate.
It is arguable in news media, however, that the growth of the online platform has had the most significant effect of increasing diversity of voices.
However, diversity is not the only key ingredient of plurality, which requires a diversity of influential voices.
This is where the concept of measuring plurality for purposes of regulating ownership may start to feel overly subjective, at least for some. The previous Federal Government posited the widely criticised concept of a ‘Content Service Enterprise’, or CSE, that would be platform neutral and would enable an objective ‘number of voices’ test buttressed by an overriding public interest test.
The threshold for CSE designation was not fully developed, with a number of possible objective bases being floated, including user numbers or revenue. Under such a regime, the concept of ‘influence’ is equated with size on some measure – but as the report points out, measuring influence by reference to size across platforms is not straightforward and may miss the point entirely.
Those challenges are only exacerbated by the need for such a regime to be capable of keeping pace with what is rapidly developing market place.
It is notable that the paper has been published in the context of the Department of Communications ‘Deregulation’ focus area. While not expressly raising it, in our view the paper certainly begs the question of whether regulation in this area continues to be necessary.
All roads lead to the Australian Competition and Consumer Commission
Even if the existing cross media ownership rules are repealed in whole or part, the final arbiter of any consolidation in Australia’s media sector is likely to be the Australian Competition and Consumer Commission which would likely closely scrutinise any consolidation in Australia’s media industry to test whether that consolidation would be likely to have the effect of substantially lessening competition in a market.
In the past, during its assessments of consolidation in Australia’s media sector, the ACCC has tended to focus on the availability of subscription driving content – news, sports and movies – and has found separate product markets based on delivery technology. The ACCC’s assessments have tended to be relatively lengthy and, in some cases, have taken up to 1 year to complete.
Also, one untested question is whether the Australian Competition Tribunal might authorise, based on net public benefits, consolidation of Australia’s media sector which might otherwise be blocked by the ACCC. However, in an application to the Tribunal for authorisation based on net public benefits, the ACCC must prepare a report for the Tribunal and otherwise assist the Tribunal. One way or the other, all roads lead to the ACCC.