The Australian media landscape, along with the entire world, has changed immeasurably. Yet much of the law that governs the traditional media formats of commercial radio, commercial TV and newspapers stems from that year – 1987.

The laws have been tinkered with, but their core remains largely intact….

Currently, Australia’s media control rules are based on five numerical tests which are designed to be a proxy for media diversity. Their basis is the historical dominance of newspapers, commercial radio and commercial television. And so the rules only apply to these media platforms. We have:
* The ‘75 per cent audience reach rule’.
* The ‘2 out of 3’ rule or ‘cross-media ownership rule’.
* The ‘5/4’ or ‘minimum voices rule’.
* And finally – the ‘1 to a market rule’ and ‘2 to a market rule’ which prohibit a person from controlling more than one commercial television licence in the same area, or more than two commercial radio licences in the same area.

Technology has marched on, leaving some of these rules redundant… once upon a time their choice of media sources was limited by their physical location. Now all one needs is a smartphone, a 4G or WiFi connection, and a swiping finger. With those ingredients, a consumer can access nearly any radio station, any news website and increasingly, any TV channel, anywhere in the world…

Whenever you’re talking about changes to media law, people in regional areas get nervous, particularly in relation to TV. It’s a legitimate concern. Here in Victoria, most of the state’s regional areas are covered by what is known as the Regional Victoria aggregated market.

Currently broadcasters in this market must broadcast at least 720 points of local content every six weeks.

The Government’s reform package will activate additional local content protections when regional broadcasters, as a result of a change in control, form part of media groups whose combined licence area populations exceed 75% of the Australian population…

Of the top 10 websites only half were owned by traditional Australian commercial media companies.

So even with the 2 out of 3 rule removed and consolidation occurring amongst long standing Australian media companies, there would still be significant ownership diversity
amongst those top online sources of news.

Diversity of media is a concern most keenly felt in regional areas. With smaller populations than the capital cities, there tend to be fewer media outlets. But the 2 out of 3 rule has little relevance to most regional areas. In 62 of the 99 regional and remote radio licence areas in Australia there are only two of the three regulated media platforms operating currently. So removal of the ‘2 out of 3’ rule would have no impact.

In around a third of the remaining 37 regional and remote radio licence areas, further consolidation could not occur because they are all at or below the ‘diversity floor’ of a minimum of four ‘voices’ under the 5/4 rule. So removal of the ‘2 out of 3’ rule would only permit acquisition or merger activity in around a quarter of Australia’s regional and remote media markets. It’s also worth noting that the Government is retaining the other three diversity rules…

Whilst some things divide free-to-air broadcasters, there is one issue that strongly unites them all – licence fees.

Currently free-to-air commercial television and radio broadcasters pay licence fees to the Commonwealth Government that total around $173 million per annum. That these companies would prefer to pay less, or none at all, is in one sense hardly surprising. “Companies want lower taxes” is not likely to make it to the “breaking news” list.

That said, I have a lot of sympathy for their arguments. It is clear that the licence fees paid by Australian commercial broadcasters are very high by international standards. These fees were established at a time when television and radio essentially had a monopoly on the available audiences. Which is clearly not the case now… Taxes should only ever be as high as they need to be…

In the radio space we must consider the future of digital radio. The technology has been rolled out in the larger mainland capital cities and is currently being successfully trialled in
Darwin and Canberra, but is unavailable anywhere else in the country.

How a broader rollout could occur is a question that warrants further consideration. So you can see that the policy challenges in the broadcasting space – licence fees, spectrum and technological changes – present tremendous reform opportunities and are material issues for the sustainability of our broadcasters. We are committed to getting the transition right.

The difficult reform tasks must be tackled. The too-hard basket must become lighter…