Early Convergence Commitments and More On the Way

On Friday Communications Minister Stephen Conroy released the first elements of the Gillard Government’s response to the Convergence Review. The review was set up by the Labor Government in order to respond to the changing media environment which has seen the introduction, within the last two decades, of digital media sources.

Initial policy responses include a decision not to allow a fourth free-to-air commercial television network and the extension of the broadcasting licence fee rebate which will eventually lead to a permanent reduction in fees levied. Further, Senator Conroy also announced that the ‘75% rule’ would face the parliament. And finally, the minister announced a change to local content rules.

The Gillard Government has decided that a fourth free-to-air commercial television broadcaster will not be sought by the government, at least in the short-term. However, the possibility of a sixth broadcaster has not been ruled out completely.

In the meantime, community television will be allowed to broadcast on the spectrum not made available for a fourth network until at least the end of 2014. This means two more years of without the prospect of another television station.

In terms of certainty for existing networks, this decision is positive. It means market share will not be as hard to maintain as it would be in the event of another competitor in the field.  But at the same time it is a loss for competition.

Existing television stations have been granted another reprieve by the Minister for Communications. Their broadcast licence rebate will be extended for one more year. After that 12 month period has passed, licence fees will drop to just 4.5% of revenue, a 50% decrease.

This move can only be seen as a positive, decreasing the costs associated with operating a television network.

Perhaps the greatest outcome, at least in theory, is Senator Conroy’s announcement that he would seek parliamentary approval for the removal of the ’75 percent rule’. This rule dictates that no one person can control broadcast interests which have an audience reach of more than 75% of the population of Australia.

The change will have to make it through parliament, but that would seem a fait accompli, with the Liberal and National Party coalition unlikely to block such a move by the Labor Party. The Greens will probably voice their opposition to the plain, but it will likely come to nothing.

Where the move on the 75 percent rule moves from great in theory, to very ordinary in practice is that it will be tied to local content provisions in regional areas. No business should have government effectively making major business decisions for them.

For this reason too, increasing local content obligations across the broader television media landscape is also a poor decision on the part of the ALP.

The primary channels of the TV networks will see their content obligations remain the same. They will be expected to broadcast 55% local content, a requirement imposed by the former Howard Government in 2005.

Under the new plans too, commercial television multi-channel broadcasters will have to show 730 hours of local content in 2013. In 2014 this will increase to 1095 hours. For 2015, the target will be 1460 hours of local content.

The new rules will provide what has been termed an incentive. If a network shows first-release drama on a digital multi-channel, then that hour of broadcast will actually count for two hours under the new obligations.

The so-called ‘incentive’ is silly and should not be used to sugarcoat what is a silly idea from government.

Television networks must be allowed full control of content and therefore their individual branding. All content should compete for transmission on a level playing field. Media companies will not always make good decisions, but to say that governments can make good business decisions for broadcast media companies, which they are actually doing through content requirements, is an exercise in fantasy.

There are more changes to the media landscape flagged for 2013. How much more control of the media will the government seek in 2013?

About Tom Bridge

A perennial student of politics, providing commentary for money and for free. Email me at tbridgey@gmail.com or contact me on 0435 035 095 for engagements.

Posted on December 4, 2012, in Federal Politics and tagged , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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