01 May 2012

Convergence Review recommends major changes to media ownership rules

Australia's media ownership rules would be significantly overhauled, if the Convergence Review's recommendations are accepted by the Australian Government.

Based on a principle of technology neutrality, the Report's recommendations focus on the regulation of content service enterprises, which would be limited to only the most substantial and influential entities delivering professional content which they also control.

Media ownership – minimum number of owners + public interest

The Convergence Review recommends removing the:

  • the "75 per cent audience reach" rule;
  • the "2 out of 3" rule;
  • the "two-to-a-market" rule;
  • the "one-to-a-market" rule;

and replacing them with a test of the minimum number of owners plus the public interest. A new communications regulator would be able to block mergers that are deemed not to be in the public interest. What is to be regulated is the content rather than the platform from which it is delivered.

It also recommends local media ownership be regulated through the minimum number of owners rule, and the 4/5 rule be updated to take into account all entities that provide a news and commentary service and have a significant influence in a local market.

A new communications regulator

In addition to regulating media mergers, a new communications regulator would be able to set media competition rules, and content standards, except for news and commentary. Unlike the Finkelstein Report, the Convergence Review recommends that the latter be regulated through an independent self-regulatory news standard body. Serious or persistent breaches of the media code could however be referred to the communications regulator.

Australian content quotas

There would be a new uniform content scheme applying to free-to-air and subscription TV.

Instead of a minimum expenditure obligation, content service enterprises would be required to spend a percentage of their total revenue from professional television-like content on Australian content. If this isn't practicable, the money could go to new converged content production fund.

As for radio, the music quotas applying to analogue radio would be extended to digital radio.

Spectrum allocation and management, and the new sixth channel

The Convergence Review recommends a common approach to the planning, allocation and management of both broadcasting and non-broadcasting spectrum. This would include:

  • a market-based pricing approach for the use of spectrum, and one that provides greater transparency when spectrum may be used for public policy reasons; 
  • spectrum planning mechanisms that explicitly take into account public interest factors, and social and cultural objectives currently reflected in the Broadcasting Services Act 1992; 
  • giving the Minister the power to reserve and allocate spectrum to achieve policy objectives; and
  • certainty for spectrum licence holders about licence renewal processes.

Commercial broadcasting licensees should also have the flexibility to trade channel capacity within their spectrum.

As for the sixth planned television multiplex, channel capacity should be allocated to new and innovative services that will increase diversity. Existing commercial free-to-air television broadcasters and the ABC and the SBS should be precluded from obtaining capacity on the sixth multiplex.

What happens now?

The Australian Government will consider the Convergence Review's report, along with the Finkelstein Report, but has not set a date for this, so we shall have to wait and see – watch this space!


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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 communication. Persons listed may not be admitted in all States and Territories.