17 September 2009

Review of anti-siphoning regime announced

On 20 August 2009 the Department of Broadband, Communications and the Digital Economy released a discussion paper for its review of the Australian anti-siphoning regime under the Broadcasting Services Act 1992 (Cth) (BSA), Sport on television: A review of the anti-siphoning scheme in the contemporary digital environment.

Background

The objective of the anti-siphoning regime is to ensure that events of national importance and cultural significance are made freely available to the Australian public and not "siphoned" exclusively to pay television.

The anti-siphoning regime operates via a licence condition on subscription television broadcasters preventing them from acquiring the right to televise events on the anti-siphoning list until either the rights have been acquired by the free-to-air television (FTA) broadcasters or the events have been de-listed[1].

The anti-siphoning list contains events and competitions including major football competitions, cricket matches, tennis and golf tournaments, motor races and the Melbourne Cup amongst other things.

The current list relates to events conducted during the period from 1 January 2006 to 31 December 2010.

What is the status of the announcement?

The Minister must cause to a review of the operation of the anti-siphoning provisions and whether they should be amended or repealed before 31 December 2009. This is timed to occur before the expiration of the current regime on 31 December 2010, as well as the digital switchover which is scheduled to be completed by the end of 2013. The discussion paper has been released as part of this review.

What happens next?

The paper invites interested parties to make submissions by 16 October 2009. The issues listed for comment as part of the review are:

1. the purpose of the anti-siphoning scheme and its impacts;

2. the appropriateness of the events on the anti-siphoning list and their rationale for inclusion;

3. the duration of the anti-siphoning list;

4. the appropriateness of the current automatic de-listing arrangements;

5. scheduling and coverage of events on the anti-siphoning list;

6. the restriction on FTA television broadcasters being able to show an event on the anti-siphoning list exclusively on their digital multi-channels; and

7. coverage of sports on new media platforms.

Positions of the parties

The anti-siphoning scheme has traditionally been the source of much debate between FTA TV and pay TV.

A key issue which has emerged in the anti-siphoning debate is whether the FTA broadcasters should be permitted to premiere anti-siphoning listed events on their digital multi-channels. This is currently not permitted unless there is a simultaneous broadcast on the FTA broadcaster's main channel. Commercial FTA broadcasters have been lobbying for this restriction to be removed. The pay TV industry has argued against this change and lobbied more generally for the anti-siphoning list to be abolished or relaxed in its favour (including by shortening the list and having a more formal use it or lose it regime).

In June this year the Productivity Commission released its "Annual Review of Regulatory Burdens on Business" draft report which suggested that the abolition of the anti-siphoning list should be "explored" and made the following recommendation:

"The anti-siphoning regime imposes regulatory burdens because of the protracted commercial negotiations required in respect of listed events. To address this issue the Australian Government should substantially reduce the anti-siphoning list."

New media

The discussion paper raises the possibility of anti-siphoning regulations being extended to new media.

The current anti-siphoning scheme affects television broadcasters only and does not affect sports coverage on any other media platforms. It was introduced at a time when concern was raised about the impact of the then emerging pay TV services on FTA services.

Since the anti-siphoning regime was introduced sports coverage on new media platforms such as the internet and mobile phones has emerged. The announcement of the National Broadband Network has drawn into focus the fact that new media platforms like IPTV are not currently subject to the regulations which apply to television broadcasters but they could be used to provide television-like services.

This issue drew comment in the context of submissions made recently in response to the Department's "National Broadband Network: Regulatory Reform for 21st Century Broadband" discussion paper. Both FTA and pay TV broadcasters have called for the anti-siphoning regime to be applied equally to new technologies such as IPTV services.

Possible outcomes of the review

While the discussion paper calls for submissions regarding the coverage of sport on new media platforms, it is more likely that the Government will defer any decision about whether the anti-siphoning regime should be extended to new media platforms until it conducts its broader review of the application of the BSA to new media in the context of the National Broadband Network. The paper hints at this noting that there is little evidence that sporting events are being exclusively siphoned to new technology platforms and that the majority of new media coverage is supplementing traditional television broadcasts.

While the discussion paper does not make any formal recommendations about the anti-siphoning review, the paper does allude to some possible outcomes of the review including that:

  • the anti-siphoning regime will continue following the review. The paper notes that the Government is "committed to ensuring that sporting events of cultural significance and national importance can be made freely available to the Australian public";
  • the Government is unlikely to introduce any obligations on the FTA broadcasters to show listed events live or at a particular time. Noting arguments from the pay TV industry that events on the list should be shown live nationally or de-listed, the paper states that "[a]s a general rule, a system where broadcasters are encouraged to respond to the preferences of the viewing audience is likely to be superior to one where viewing times are determined by a central authority"; and
  • the restriction on FTA broadcasters premiering listed events on their multi-channels will form part of the review. While noting that a full removal of the restriction would constitute a major change to the operation of the anti-siphoning regime and have implications for the pay TV sector, the paper highlights possible benefits of removing the restriction. For example, the paper notes that lifting the restriction would allow a rugby league match that receives live coverage on a FTA broadcaster's main channel in NSW and Queensland to be shown live simultaneously in other states on the broadcaster's multi-channels without disrupting programming on the main channel. Additionally FTA broadcasters could provide increased live coverage of major multi-round events such as tennis and the Olympic and Commonwealth Games. These comments suggest the Government may be considering a possible middle ground where the multi-channelling restriction is partially removed to facilitate such use of the multi-channels.

The discussion paper does not give anything away about what a future anti-siphoning list might include. However, the Minister has previously commented that events involving iconic national teams like the Wallabies and Kangaroos will be staying on the list and that Socceroos' World Cup qualifiers will be added. He has also indicated that the Government is considering whether other events which receive less FTA coverage such as the French Open Tennis should be removed.

 

[1] The Minister for Broadband, Communications and the Digital Economy may de-list an event if the FTA broadcasters elect not to acquire the rights to the event. Also, use it or lose it guidelines came into effect from 1 January 2007 which provide that where listed events do not receive adequate FTA coverage, or are not acquired by FTA broadcasters, these may be considered for permanent (or partial) removal from the anti-siphoning list at the discretion of the Minister. No events have been removed from the list under this scheme.

Events are also automatically de-listed 12 weeks before they commence unless the Minister overrides the automatic de-listing.

Disclaimer
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.
For more information, contact...
Email: Kate Jordan, Deputy Chief Executive Partner - People
Tel: +61 2 9353 4721