Sunday, 02 December 2012 11:31

Conroy rules out fourth FTA TV network

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Communications Minister Senator Stephen Conroy has released the government’s initial response to the media Convergence Review. It confirms that a fourth commercial TV network will not be allowed.

Conroy positioned the response largely in terms of strengthening Australian content laws through “a package of measures to ensure quality Australian content continues to be seen on Australian television,” but it is much more far reaching than that. One of its key aspects is that the government has decided that no licences will be made available for a fourth free-to-air (FTA) television network.

“This follows the Minister’s review of future uses of the so-called sixth channel of television spectrum,” Conroy’s statement said. “Online technologies like IPTV are giving people new ways to access content. The low barriers to entry for these online content services and the scope for future innovation mean that in the long term, these online platforms are likely to be a real alternative to traditional terrestrial television. The rollout of the NBN will further facilitate this.” In the long term? It’s happening now.

This “sixth channel is a favourite subject of Conroy’s. It refers to the addition of TV beyond the three commercial networks, the ABC and the SBS. “Potential uses of the sixth channel will be considered in the longer term, in the light of ACMA’s assessment of future broadcasting technologies.

“In the meantime, the government will allow community television to use spectrum intended for the sixth channel until at least 31 December 2014. The government remains committed to ensuring community television has a permanent spectrum allocation for digital broadcasting.” It may “remain committed” to community TV, but it will not allocate it any permanent spectrum.

The Convergence Review was conducted by a team led by former managing director of IBM Australia Glenn Boreham. Also on the review team were Malcolm Long, chairman of NDA and a former member of the Australian Communications and Media Authority, and Louse McElvogue, a British media consultant.


Their report was presented to the government on 30 March 2012. Its key recommendations were to:

  • Replace “silo-based regulation” with platform and device-neutral regulatory framework.
  • Introduce the concept of “Content Service Enterprises” (CSEs) and limit the regulatory framework to these organisations. CSEs would include media companies but exclude carriers, social media companies and companies like Apple and Google.
  • Form a new statutory regulator to replace the ACMA. This new regulator would have the power to examine changes in control of CSEs of national significance and to block proposed transactions based on public interest considerations.
  • Form a new self-regulatory body to oversee journalistic standards for news and commentary across all platforms. This has been widely resisted by media companies, most notably News Limited.
  • Introduce a “minimum number of owners” rule and public interest test to replace the existing “75% of audience reach”, “Two out of Three”, “Two to a market” and ‘”One to a market” rules.
  • Repeal Australian content quotas and minimum expenditure obligations and replace them with production requirements or contributions to a new converged content production fund.
  • Implement a common approach to planning, allocating and managing spectrum, including a market-based pricing approach, consideration of public interest factors, and certainty for spectrum licence holders in the renewal process.
  • Replace existing commercial broadcasting licences with “spectrum licences”.

All reasonable recommendations, but the government has not exactly embraced them. Rather than implement any wholesale changes, Conroy chose to emphasise that the government will strengthen Australian content laws on FTA television.


“Free-to-air television plays an important part in our lives, and seeing Australian stories told on TV is vital in reflecting and maintaining our Australian identity, character and diversity,” Conroy said. “To make sure that we keep being able to watch Australian content, we are taking a number of steps to enable commercial television broadcasters to continue to invest in and broadcast Australian content.”

Conroy said the government will:

  • Immediately extend, via regulation, the current rebate on television broadcasting licence fees by a further 12 months, ahead of moving to reduce television broadcasting licence fees permanently by 50%, to a maximum of 4.5% of revenue. The rebates will have effect for the 2012-13 financial year. 
  • Introduce a multichannel Australian content requirement for each commercial television broadcaster of 730 hours in 2013, increasing to 1095 hours in 2014 and to 1460 hours in 2015. This includes an incentive for first-release drama by allowing an hour of first release drama premiered on a digital multichannel to count for two hours under the transmission hours requirement for multichannels.
  • Retain the current 55% transmission quota for the commercial television broadcasters’ primary channels, but introduce greater flexibility into the current arrangements for sub-quotas.

Conroy said these measures are only part of the Government’s response to the Convergence Review, and that  further announcements will be made next year.

“The Government will develop legislation to implement the reforms announced today by March 2013, with appropriate transitional arrangements for the new Australian content measures. These content requirements will apply from 1 January 2013. The Government will also start consultations early in 2013 on how captioning levels will be increased on multichannels following digital switchover. These measures address content and captioning levels on digital multichannels that were to be separately reviewed.”

Conroy said that in 2011-12 the commercial television industry invested a record $1.35 billion in Australian programming: drama, sport, news and current affairs and light entertainment. In the same period, revenues have remained weak and costs have increased. He did not mention the vast increase in so-called “reality TV”, which is cheap and easy to produce compared to drama, nor the sad decline in the quality of current affairs and news journalism.

“Commercial free-to-air television is under pressure from the structural change taking place in the media due to the convergence of content delivery platforms and changing consumer habits,” he said. “Without adjustments to the current rules, the industry could be forced to drop quality Australian content as cost-cutting bites into programming. Updating the rules on commercial free-to-air television broadcasters gives them certainty, and allows them the flexibility and capacity to innovate and thrive.”

You can be sure that “more certainty” will mean more reality TV and more cooking shows.

The government says will also remove the “out-dated restriction” on a person controlling a network of commercial television stations that has an audience reach of greater than 75% of the Australian population. “This will be subject to adherence with existing local content obligations in regional areas and written undertakings in respect of those obligations.” This restriction will be removed “subject to the approval of parliament.”

Governments of all persuasions have a pathetic record in Australia when it comes to TV and regulatory policy. Existing media owners have had almost monopolistic control, and were – unbelievably – subsidised by the government to move from analogue to digital TV. Australian viewers have subsequently paid more and seen less than they would have if real competition had been allowed.

The consequences of these policies are still with us. But fortunately technology is overtaking those consequences. The government’s response to the Convergence Review’s report sees most of the uncontroversial or common sense recommendations are endorsed, and touchy areas like media regulation and the abolition of ACMA ignored.

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire. He is one of Australia’s longest serving and most experienced IT journalists. He is author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’

He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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