Senate debates

Wednesday, 9 November 2016


Broadcasting Legislation Amendment (Television and Radio Licence Fees) Bill 2016; Second Reading

11:44 am

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | Hansard source

I rise today to speak on the Broadcasting Legislation Amendment (Television and Radio Licence Fees) Bill 2016 on behalf of the Australian Greens. I want to acknowledge the effort and work that my colleague Senator Ludlam has put into this particular area. I am hoping that my comments today will reflect his thoughts and concerns about this piece of legislation.

I am sure that we all recognise the challenges that Australia's commercial television and radio stations are facing, and we have just heard some of those outlined by the previous speaker: the challenges of convergence and fragmentation. Until not very long ago, if Australians were at home and they wanted to watch something on the screen, all they would have to do was put on the television. There was not really much else available. The main competition the three commercial television networks faced was from the public broadcasters—that is, the ABC and the SBS—and every now and again maybe the video.

For the better part of five decades Channel 7 and Channel 9 faced not much competition at all, except from each other, and then from what became Channel 10 in the mid-1960s and from pay TV in the mid-1990s. But, just as technological innovation has created the possibilities of commercial network television, further technological innovation began to present real challenges. For more than a decade, the commercial television networks have faced real and increasing competition from online alternatives facilitated by the increase in network bandwidth from users of the internet, and then, suddenly, they had access.

YouTube launched in 2005, and its user-generated possibilities were quickly realised by a generation of young and tech-savvy entrepreneurs. Very soon there were thousands of highly produced films and documentaries that competed for the eyeballs and the ideas of people who had been attentive viewers of content on the commercial networks. All of a sudden the world was open to them. To everyone's surprise it was not exactly expert produced content that did well on YouTube and other online platforms. It was not just that type of content; it was much broader. There were lots of videos of cats. The point is that there was much more choice for everyone, particularly the younger generations, for people who wanted to watch screens at home in their time—what they want; where they want.

With the arrival of online subscription-based streaming services, like Netflix, competition has become even more fierce. The networks have responded in kind by making their own content available on demand via their websites—a format pioneered, I point out here, by ABC's iview, which, in my opinion, is still one of the best in the country—and by partnering with other media companies in the cases of Stan and Presto.

The main policy issue here is that the spectrum, which the commercial networks have traditionally relied on to send their signals to TV sets across the country, is becoming less and less important and, therefore, less and less valuable. Once upon a time, the spectrum was just about the only way of delivering visual content to viewers. Now, content creators and providers can use the internet, which means they can bypass the audiovisual spectrum entirely.

The same thing has happened with respect to commercial radio. The phenomenal growth of podcasting has created new life for commercially produced radio content, but it has also allowed a truly incredible range of really amazing material that can be produced cheaply and distributed widely. The result of all of this is that the spectrum is less valuable than it once was. If we are to acknowledge that, it makes sense to reduce the fees that the broadcasters pay across the spectrum.

In 2013, that is exactly what happened for television broadcasters. Their fees to access the spectrum were slashed by an incredible 50 per cent. The Greens, at that time, voted in favour of that reduction, because there was a case for a substantial fee reduction and because the bill was brought as part of a package which supported reforms that had come out of the quite exhaustive Convergence Review process.

As part of that package there were substantial improvements to the minimal local content requirement for commercial television networks. In particular, the commercial networks' secondary channels like GO and GEM, for example, were for the first time required to show a minimum of locally produced content—and so they should. It was not an entirely adequate amount of local content. It was much, much less than the 55 per cent quota that the networks had to meet on their primary channels, but nonetheless it is there. It was a start, and the package was passed. That package passed in 2013 and required the networks to increase local content to their secondary channels over the course of the following three years, and here we are.

In 2013, the package also did a number of other things. It legislated a 55 per cent local content quota on core primary FTA commercial channels. It legislated a local content quota on secondary FTA commercial channels, which is due to increase incrementally over the three years. It updated ABC and SBS channels to recognise their roles as providers of digital content, which has become invaluable. It implemented the then ALP government's decision that the ABC would be a sole provider of the international broadcasting services. Watching the US election unfold today shows just how important that service is. It required the minister to appoint at least one Indigenous non-executive director to SBS.

But now we are back here again debating a further 25 per cent cut. The argument that supports a further 25 per cent cut is the argument that I have already outlined. It is an argument that, taken to its logical conclusion, has a certain fatality about it. The Nick Xenophon Team have accepted that fatality holus-bolus and have pressed fast-forward on that logical conclusion with an amendment to abolish the licence fees altogether. This is what those commercial broadcasters want, and they want it badly. The Greens will not be supporting this amendment, because the networks are not the only groups with skin in the game here. Indeed, the commercial broadcasters and their mostly corporate shareholders are perhaps not even the main players who are affected by reforms in this area. As the Screen Producers association points out, it is the entire value chain, particularly for television content, that is under pressure because of audience fragmentation.

The Xenophon party amendments, and indeed the government's own substantive bill, would certainly relieve pressure at one end of that value chain, but there are other parts of that value chain that are also under significant pressure, and this bill does nothing to address those. We know the commercial broadcasters are in this place, lobbying hard to have the licence fee abolished entirely. But to abolish the licence fee entirely is to accept that the spectrum itself no longer has any value. That the value is less does not mean there is no value at all.

Some people argue that the broadcasting licence fee is comparable to the licence fees paid by taxis. Now that the digital revolution has allowed Uber and other companies to compete with taxis, it is fair to say that taxi licences, which were once incredibly valuable, are now not valuable at all—and governments in many jurisdictions are arranging to buy back those licences. But the litmus test to determine whether or not the spectrum retains value is surely the extent to which the commercial broadcasters are prepared to share the spectrum with new entrants. Of course, they are not at all prepared to do that. This is all about protecting them, to the extent that they managed to secure a legislative amendment in 2013 which guarantees that a fourth commercial broadcasting licence cannot be issued without parliamentary approval.

In a time of increasing audience fragmentation the value of the spectrum remains very substantial. Through what other medium does a content provider have an opportunity to reach 99 per cent of Australian households in a way that is to all intents and purposes free. Under what other spectrum is this available, from the point of view, of course, of the content consumer?

The taxi-Uber analogy would apply to the broadcasting industry only if taxis were effectively free for customers and if taxis could take you to certain places, such as certain major sporting events, that Uber and other competitors could not. On top of substantial regulatory protections, such as a ban on new licences, the broadcasters also enjoy the benefits of substantial media attention for their leading content, as well as TV guides which are included in most major newspapers, some popular magazines and across the internet.

If we accept that the broadcasting spectrum has a value, and it clearly does, then we must emphasise that the spectrum is a public good. The commercial broadcasters pay to access that public good in order to generate private revenue and profits. One predictable effect of a further substantial reduction in the licence fees paid by the commercial broadcasters to access the spectrum is that the money they save will simply be added to their bottom lines—of course it will—or to the very substantial war chests that they use to bid for major sporting events.

It is of course vitally important that Australians continue to get access to major sporting events on free-to-air television. I do note that there has been some significant slippage from that principle since the introduction of pay TV and I note also that we are likely to see 11 fewer AFL games on free-to-air TV next year. This is mostly an issue of anti-siphoning legislation, which this bill does not address but which is something we should be aware of nonetheless.

What we do know is that the commercial networks seem to be much more prepared to pay for sport than they are prepared to pay for drama and children's TV. During the three years leading up to 2012-13, the commercial free-to-air broadcasters increased their spending on sport by 23 per cent but decreased their spending on drama by six per cent. We accept the view of the Screen Producers Association and other groups along the production value chain that there are substantial issues with the regulation of local content. I do not think anyone could seriously suggest that the quality or substance of local content on free-to-air commercial TV has improved in recent years. There is a lot more reality TV, which is cheap to produce. There is a lot more content from New Zealand, which satisfies local content regulations and which is much cheaper to produce, given the higher tax offsets and generally lower costs of production in that country.

We think that the whole issue of local content regulation has to be looked at in a considered fashion. We need to be seeing a package. Ultimately, it is actually in the broadcasters' long-term interest to invest in new locally produced drama and children's television, because those are their major points of differentiation in the converged market. Other providers will continue to screen overseas content and sport—of course—but the only way the local broadcasters can ultimately secure their relevance is to produce local drama and children's television.

There are additional, related issues. There are the anti-siphoning rules I referred to earlier. There is the issue of audio description services for the visually impaired, which currently do not exist as a regular feature of free-to-air TV in Australia. And there is the huge issue of community broadcasting, which the Turnbull government seems determined to kill off, mainly because the Prime Minister seems determined to speak only to the big commercial broadcasters and therefore keep himself wilfully ignorant of the real issues.

As legislators and regulators we have a real responsibility to make sure that regulation is, as much as possible, in the long-term interests of everyone along the value chain of Australian TV and radio production, including broadcasters, content producers and viewers. The government has flagged a content review, but we have not seen the details about when and how that will work. I look forward to hearing some clarification about that from the minister.

What we do not understand is why the government would effectively be giving away its major bargaining chip with the broadcasters, which is the substantial cut in the licence fee. You would not give it away for nothing. Surely the more sensible thing to do would be to withhold that cut and to defer this legislation, at least until a substantial content review has been conducted, perhaps in the form of an independent or parliamentary inquiry. As it is, this bill does not begin to address the core issues facing the broader industry. The ultimate policy goal should be to improve the quality of locally produced content, especially news and current affairs, drama and, a passion of mine, children's TV.

All this bill will do is effectively gift around $163 million to the commercial broadcasters without requiring anything in return. I must say, I would not want the government negotiating on my behalf, if this is the kind of deal they stump up. There must at least be consideration given to the view that out of $163.6 million some, or at least a substantial portion, of it could be reinvested in some way to create locally produced drama and children's television, in particular. We know that is where there is a need. We also know that we need increased audio description services for the visually impaired. It is also a complete mystery to me as to why a portion of this money could not go towards the maintenance of the immensely valuable community broadcasting sector. We know they need help and they need support. To that end, the Greens will be moving our own amendment. I foreshadow that now. It has been circulated in the chamber.

What this bill appears to be is a bandaid response to some aggressive lobbying by the commercial broadcasters. I am sorry to say it is not good policy, at least at this time and at least while it is separated from any broader industry considerations. We would be more than happy to consider these broader issues with the discussion of a review of content and the desire for more locally produced content. We urge the government: do not hand over your bargaining chips for free. I move:

At the end of the motion, add:

", but the Senate notes the savings for the commercial free-to-air television broadcasters resulting from the reduced licence fees and is of the opinion that those savings should be reinvested into Australian produced drama and children's television and increased audio description services for the visually impaired, including trial programs by each channel.".


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