Media law changes - cutting to the chase

What is the status of Tuesday's statement by Senator Coonan?

It's a discussion paper, rather than a policy statement.

The fact that the paper is open for discussion until 18 April may make it look as though the Government isn't expecting to make many changes to the proposals in the paper. However, some of those proposals are still very much "up in the air", which indicates that the Government has left itself plenty of wriggle room.

What happens next?

As mentioned above, the next step is to get submissions in to the Government by 18 April. After that, the Government will, later this year, release a Digital Action Plan (which deals with the switch from analogue to digital TV). No firm timetable has been set for non-digital issues, such as media ownership.

First up - 2006-2007

The most immediate likely change will be the removal of the existing content restrictions on ABC and SBS digital TV services.

This is clearly a low risk strategy to boost the attractiveness of digital TV to consumers. The Government intends to introduce this change "as soon as practicable", but hasn't set a firm date.

The first events that can be precisely dated are:

• as already planned, lifting the moratorium on a fourth commercial FTA TV licence on 31 December 2006 (although this is more apparent than real: "it is not envisaged that any new licences would be allocated prior to the end of the simulcast period" (ie 2010-2012); 
• loosening some of the shackles on the datacasting channels (from 1 January 2007);
• the possibility of freeing FTA TV licensees from the requirement to duplicate SDTV content on their HDTV services -  in other words, a limited form of multichannelling (1 January 2007);
• "use it or lose it" rules for anti-siphoning (1 January 2007).

The attempted revival of the datacasting channels will take the form of two new licences for "new digital services". The current proposal is that these will not be full conventional FTA TV services, but will have a considerably wider content range than the largely moribund datacasting licences:

"options for these services may include subscription TV services, FTA niche ‘narrowcasting’ services, as well as interactive and short video or ‘datacasting’ services, whether delivered to fixed or mobile television receivers."

(Existing FTA TV licensees will not be allowed to take up these new licences.)

The divergence of views on digital multichannelling among current FTA TV licensees means that there may be little change in this area before the analogue switch-off in 2010-2012 (see below). The one immediate concession that the Government is prepared to make is in the HDTV area. From 1 January 2007, it may be prepared to abolish the requirement that the content of the HDTV and SDTV signals currently being broadcast by FTA licensees should be the same. Since there will still be a requirement that the SDTV signal is a simulcast of the analogue programming, this means that the only "new" channel will be HDTV. The FTAs will not be allowed to broadcast anti-siphoning list material on the HDTV service unless it is also shown on the SDTV service.

Finally, 1 January 2007 will see a "use it or lose it" scheme for anti-siphoning. This scheme will identify criteria against which "use" of an event by a FTA broadcaster could be measured. If the event is not "used", it may be removed from the anti-siphoning list.

What happens then?

2007-2010 is still a grey area. Although the Government has flagged changes to take place during that period, it has not set any firm dates. In fact, it has made it clear that, on some issues, it will take account of what happens in the market.

In brief, between 2007 and 2010:

• the Government will assume responsibility for allocation of additional FTA commercial TV licenses on the BSB spectrum, and will conduct a review into whether new licences should be granted (but not with a view to granting new licences before the shutdown of analogue);
• the Government will also assume responsibility for allocating commercial FTA TV licences outside the BSB spectrum;
• the Government may allow multichannelling by FTA commercial licensees "should there be any significant changes in the lead-up to analogue switchover which alters the balance in favour of an earlier adjustment" (if earlier multichannelling is allowed, they will not be able to use multichannels to broadcast anti-siphoning list material (unless it is also shown on the "main service"));
• the Government will review the anti-siphoning regime;
• the Government may wind back the foreign ownership and cross-media ownership restrictions - see below (although it intends to do this, it has said only that it could be done any time between 2007 and 2010).

Media ownership rules

As has been widely anticipated, the Government intends to lift many of the current ownership restrictions currently contained in the Broadcasting Services Act. This is only a partial deregulation:

• each mainland capital city market will be required to have at least five different media owners (other markets will require a minimum of four);
• no-one will be able to own more than one TV licence and/or two radio licences in the same market;
• although the blanket ban on foreign TV ownership will be lifted, such acquisitions will still be subject to the "national interest" requirements of the Foreign Acquisitions and Takeovers Act;
• deals in the media industry will still be subject to the competition law rules in the Trade Practices Act.

Looking ahead, that last element (the application of the Trade Practices Act) will be the great unknown factor when planning media acquisitions.

The foreign and cross-media ownership rules effectively imposed a moratorium on significant media acquisitions for many years, so that there was little need to consider how the Trade Practices Act would apply to media. Once those rules are lifted, both media players and the ACCC will be faced with some very interesting questions. Not the least of these will, of course, be the vexed problem of defining the appropriate "market" in the increasingly diverse media world.

Stay tuned for further updates from Clayton Utz as more detail comes to light.