Joint Select Committee on Broadcasting Legislation - 18/03/2013 - Further reform of Australia's broadcasting legislation
O'LOUGHLIN, Ms Nerida, Deputy Secretary, Broadcasting and Digital Switchover, Department of Broadband, Communications and the Digital Economy
PELLING, Dr Simon, First Assistant Secretary, Broadcasting, Department of Broadband, Communications and the Digital Economy
Committee met at 08:02
Senator LUDLAM: I recognise that we have Senate hearings later in the day to talk about the broader package of reforms that is before the parliament at the moment, but I want to talk about how lifting the 75 per cent reach rule would interact, if at all, with the government's proposed public interest test. Can you just tell us, for example, what will happen if the 75 per cent reach rule is lifted? Will any future mergers and acquisitions, particularly in regional areas, invoke the public interest test that the government has proposed?
Ms O'Loughlin : The public interest test is for mergers and acquisitions between what is defined as nationally significant news voices. It is a combination of-firstly we are talking about commercial radio and commercial television broadcasting licences; they are considered a voice. They would have to be over a certain threshold audience, and we would expect that most of these would be-
Senator LUDLAM: Most.
Ms O'Loughlin : Therefore that if there were mergers between them then that would probably enliven the interest of the public interest advocate.
Senator LUDLAM: When you are tabling for us a version of the sheet that you were reading from before, could you indicate next to each of those entities which of them are and which are not considered a voice under the government's draft legislation?
Ms O'Loughlin : We could certainly do that on the basis of our estimations at this point. The threshold itself needs some further work with the ACMA, but we can certainly indicate that.
Dr Pelling : Another relevant consideration is that something like WIN Corporation, for example, is a network of stations and so a range of things would come into play in terms of one company owning a network of stations and another company owning a network of stations which would be in addition to the impacts on the individual voices.
Senator LUDLAM: We will get to track this a bit better later in the day, hopefully, but how would an affiliate service be treated, for example, under that test-where it is effectively a shell that is just streaming content out of one of the big networks?
Ms O'Loughlin : They would be counted as a separate voice because, while they may have affiliate agreements, networks such as WIN provide significant content in their own right in terms of local news content.
Dr Pelling : Those rules tie to control, not to content per se.
Senator LUDLAM: Not what, sorry?
Ms O'Loughlin : They are tied to control, not to the actual provision of the content.
Dr Pelling : There is a broad content test relating to determining whether someone is in control but basically there is a difference between an affiliation arrangement, which is a simple commercial arrangement between a metropolitan and a regional broadcaster, and who controls the network.
Senator LUDLAM: All right. It might be made a bit clearer if you are able to table that paper. If the reach rule is dissolved and we see a wave of mergers and acquisitions in regional areas, and some of them may be subject to the public interest test and some may not-what instruments do you use presently to guarantee a minimum amount of local content, particularly news and current affairs, in regional areas?
Ms O'Loughlin : As I explained, the main provision is a licence condition under section 43 of the act. That relates to requiring regional television broadcasters to broadcast to local areas a minimum level of material of local significance. That is a licence condition which is administered by the ACMA. It is a points system, so each of the broadcasters has to reach a threshold of points and they can do that by the provision of what is defined as material of local significance, which may or may not be news. But they get additional points, so there is a very strong incentive for them to provide local news.
Senator LUDLAM: Okay. So, for example, how many points do I get if I run a regional radio broadcaster and instead of basing somebody locally I plant someone in Sydney in my parent company's studio and I read press clippings from a regional newspaper into a microphone into that broadcast licence area? How many points do I get for a practice like that?
Ms O'Loughlin : I do not think I can do a points calculation on that one. But I would explain that the licence condition for television relates to the provision of content, not the presence of facilities in a local area. So it is different to the radio source.
Senator LUDLAM: So I would not necessarily have to base anybody out there at all?
Ms O'Loughlin : It would be up to the commercial broadcaster to decide where they place people, but they only get points if they can prove that the material that is broadcast is of local significance to that particular area. It is not just across a licence area; it is divided down into local areas. So they have to provide it not just across a whole licence area but also to particular regions in that licence area.
Senator LUDLAM: Can you talk us through how that works for radio, then? If that is how it works for TV, does the same thing prevail for radio broadcasters?
Ms O'Loughlin : There is another set of conditions for radio which are about both the material of local significance and what is called local presence. It was aimed at ensuring that, if there were mergers and acquisitions or changes in control in the broad within a regional commercial radio licence, a level of local presence which existed in that market before the change of control would be maintained in that market after the change in control.
Dr Pelling : There are two layers: there is a local presence condition and a local content condition. Some senators who are involved in that process will recall there is a thing called a trigger event which activates the local content provision, which is tied to control.