1. A summary Australian convergence timeline

March 2011 – Convergence Review Committee receives Terms of Reference, covering electronic old (free to air TV and Pay TV) and new (internet) media

September 2011 – Independent Media Inquiry (Ray Finkelstein SC) receives Terms of Reference, covering journalism and print media regulation

February 2012 – The Independent Media Inquiry Report is published and recommends replacement of Australian Press Council with a new statutory regulator of old and new media with jurisdiction over any publisher that distributes more than 3,000 copies of print per issue or a news internet site with a minimum of 15,000 fits per year. Media criticism is led by News Limited papers and focusses upon freedom of speech and ‘it aint broken’ reasoning for status quo or limited reform.

March 2012 – The Convergence Review Committee Report is published with 31, broad reaching recommendations.

To the surprise of many, the CRC recommendations encompass both print and electronic (new and old) media and include a substantial winding back of media outlets to be regulated (as compared to current ACMA regulation) of old electronic media, based on a concept of ‘significant media enterprises that influence Australians access to professional content’.

The CRC also notes the Finkelstein Inquiry recommendations, but demurs as to the range of media outlets to be regulated and recommends a continuing and expended role for industry self regulation through a new Australian Media Council and registered industry codes of practice.

The CRC recommends abolition of Australian Communications and Media Authority (ACMA) for a new body with enhanced policy making powers, effectively centralizing policy making away from the Department of Broadband, Communications and the Digital Economy, the Minister and the old ACMA.

The CRC also recommends replacement of Australian Press Council with a new statutory regulator of old and new media, with jurisdiction over any publisher that distributes more than 3,000 copies of print per issue or a news internet site with a minimum of 15,000 fits per year. Media criticism led by News Limited papers and uses freedom of speech and ‘it aint broken’ justifications for status quo or limited reform.

April 2012 – The Communications Minister notes the CRC recommendations and says that Federal Government will respond after considering the recommendations in detail.

2012 – the existing print media self-regulatory body, the Australian Press Council, works to improve procedures and complaint handling. Some non traditional media outlets, including Crikey, join.

2012 The West Australian announces it is leaving the Australian Press Council to establish its own complaint handling body, the Independent Media Council. (http://www.independentmediacouncil.com.au). To date only newspapers published in Western Australian have joined. The first reference to the IMC is determined by the IMC in in August 2012.

November 2012 – The Communications Minster announces the Australian Government’s limited policy response to certain of CRC recommendations, says that these will be implemented through introduction of legislation in March 2013, and that further policy responses will be announced in 2013.

November 2012 – The UK Government publishes the Leveson Report. Lord Justice Brian Leveson undertakes a widely reported speaking tour in Australia.

2. Questions and Answers

2.1 As part of the Government’s initial response to the Convergence Review, the Government has announced measures to ensure the continuance of Australian content on commercial free to air tv. What were the key measures announced?

  1. Summary of Government Measures

The Government says its response attempts to find the balance between the continuing need for freeto- air broadcasters to invest in Australian content while recognizing reduced electronic media revenues in the transition to a converged media environment.

In effect, the Government has sought to promote continued availability of Australian television content by providing substantial concessions to free-to-air broadcasters.

In summary, the Government said it will:

  • broadcasting licence fees: extend the current ‘rebate’ on free-to-air broadcasting licence fees to 30 June 2013 ahead of a permanent reduction in licence fees by 50% to then be a maximum of 4.5% of free-to-air broadcaster’s revenue;
  • fourth free-to-air television network: not make spectrum available for a fourth free-to-air television network; and
  • national free to air TV networks: remove the 75% reach rule: this eliminates the restriction upon a person controlling a commercial network that has an aggregated audience reach of greater that 75% of the Australian population.

In exchange, the Government will:

  • multichannel quotas, not primary channel only: introduce multichannel content quotas for free-to-air broadcasters in 2013 with an incremental increase in the quota until 2015. There is a further incentive for free-to-air broadcaster to invest in first-release drama which will count double towards the digital multichannel quota; and
  • flexibility in quotas: maintain the 55% transmission quota for the free-to-air broadcasters’ primary channels but introduce greater flexibility into the current arrangements for sub-quotas.
  1. How will these measures affect free-to-air broadcasters and Australian content producers
  1. Multichannel quota

The Government has rejected one of the key CLC recommendations for the ongoing protection of Australian content: a 50% increase in the sub-quota for first release drama, children’s and documentary production.

The Government has instead opted for a total hours based approach for digital multichannel which will require each commercial broadcaster to screen a total of 730 hours (2013), 1095 hours (2014) and 1460 hours (2015) of Australian content on their digital multichannel.

Notably, in 2011, according to Free TV commercial broadcasters’ collectively broadcast at least 6,400 hours of Australian content which exceeds the proposed 2015 quota (which would only require free-to-air broadcasters to collectively screen 4380 hours of Australian content).

Commercial broadcasters will also be free to choose what Australian content will fill the new multichannel quota, as there is no requirement that the content is first-run or a specific genre. The Government has provided an incentive for commercial broadcasters to commission first-release drama by rewarding double counting for those programs. However, it is questionable whether the double counting will act as a strong incentive to invest in new Australian programming when broadcasters are already meeting the quota.

  1. Removal of the 75% reach rule

The 75% reach rule will not be missed, as in practice it was seen as doing little to improve content diversity as metropolitan broadcasters simply distributed content through regional affiliates.

Some media commentators think removal may pave the way for major commercial broadcasters to become national broadcasters through the acquisition of regional affiliates such as Prime, NBN, WIN and Southern Cross Ten: such takeovers would be subject to ACCC approval.

  1. Reduction in broadcast licence fees

The Government has decided to extend the current rebate on commercial television broadcasting licence fees to 30 June 2013 ahead of a permanent reduction in licence fees by 50% to a maximum 4.5% of a commercial broadcaster’s revenue.

Currently, this reduction in licence fees will not be offset by additional costs under the new obligations to broadcast Australian content as the obligations do not require the content to be new and, as discussed above, commercial broadcasters are already meeting the proposed minimum Australian content quota.

In the short term, this constitutes a significant boost for commercial broadcaster’s bottom lines.

  1. No fourth commercial broadcast

The Government’s decision not to allow creation of a fourth free to air television network is a win for commercial TV. However, this might be viewed as not a significant a win in an era of Internet, IPTV and the ever present spectre of the NBN broadband network which will enable audiences to obtain linear and other download content from multiple sources, ‘over the top’ (that is, delivered over the ‘normal’ internet and not as dedicated IPTV channels) and on-the-go.

  1. Conclusion

Overall, the Government’s measures would appear to be sensitive to the short and long term financial problems of free-to-air broadcasters. Free-to-air broadcasters as currently funded are poorly placed to fund Australian content without such financial concessions.

3. When will the new measures be introduced?

The Government has indicated that it will develop the legislation to implement the reforms by March 2013 which would include transitional arrangements for the new Australian content measures.

The new multichannel content requirements have already commenced: they will apply from 1 January 2013.

4. Were there any surprising announcement/omissions and what areas of the Review still need to be addressed by the Government?

There were not any particularly surprising announcements or omissions, though the Government largely left the most controversial recommendations for a later date.

This is not particularly surprising, as we are entering an election year in which the Government would be mindful of the hostile reception many of the regulatory recommendations received from large media organisations.

The Convergence Report did set out a three-stage implementation programme for its recommendations – or what it termed a ‘road map’. Stage one of the road map was to complete stand-alone measures that did not require extensive legislative change.

The Government’s initial response deals with some of the less controversial reforms outlined in stage one including Australian content transmission, local content rules and a decision regarding the television sixth multiplex but does so in a piecemeal fashion.

The Government is yet to comment on the more controversial recommendations in stage one:

  • establishment of the new communications regulator – initially acting in concert with ACMA including immediately dealing with functions relating to CSEs and media ownership including the administration of the much debated ‘public interest test’; and
  • support the establishment of the industry-led news standard body – this is highly controversial and as already noted has been the subject of recommendations by the Finkelstein Inquiry and the CRC. The Leveson Report calls for establishment of a on a statutorily based press regulator. This is a politically difficult issue for a Government to tackle in an election year.

The Government has indicated it is continuing to consider the review and further announcements are forthcoming this year. None of the measures announced by the Government so far demonstrate a commitment to the radical vision and scope of the CRC, which would recommended a complete rewrite and simplification of content regulation with only the largest content providers, rather than specific delivery platforms, the subject of regulation.

It is even less likely that the complex stages two and three, which will involve repealing the Broadcasting Services Act 1992 (Cth), will be implemented in the near future – at least, until after the outcome of the upcoming Australian election.