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Estimates & Committees
Scott Ludlam 21 Oct 2009

Senator LUDLAM-Were you in the room earlier when we were asking Mark Scott about the CD network that the ABC uses for its iView service and that the ABC is currently in negotiation with ISPs about unmetered access. Are you aware of technical issues that have arisen with the ABC using that service?

Mr S Brown-No, I am not. I am as of this morning's discussion. That was the first I had heard of it.

Senator LUDLAM-It is essentially around source IP address lists and how the server would have to be offering everything unmetered, not just ABC or SBS content, and that has thrown up a couple of issues, which they are busy negotiating on currently. I think it would be worth investigating that. Presumably you are doing that as part of your tender process. Can you give us a bit of detail as to what it is that you are intending to offer and how similar it would be, for example, to what the ABC is doing?

Mr S Brown-We already offer broadly what the ABC is doing. We have not branded our catch-up system. That is simply available on the SBS website. Our catch-up strategy is broadly similar to theirs in that depending on the rights that are available we will offer seven-plus days of catch-up hopefully as part of our free-to-air rights and not costing any more. Obviously that is a potential constraint. But at the moment I think the trend in the industry is for a view that there is a free-to-air window that incorporates an online delivery as well over a constrained period. After that it tends to go into another commercial proposition where the original rights holder will seek to exploit it for their own purposes. In addition, we provide a substantial volume of current affairs on a much longer timeframe. Dateline and Insight programs or parts thereof can be accessed going back many months.

Senator LUDLAM-Is there a policy whereby after a certain period that sort of content is knocked off or are you starting to hold that material in perpetuity?

Mr S Brown-I will take that on notice. That is a good question.

Senator LUDLAM-I would presume there is no technical reason why that material could not be archived for all time, server space permitting?

Mr Broderick-There is. Our internet service provider-the company that does that for us, Macquarie Telecom-holds a lot of the content online for us and we pay for an amount of storage that they have at their site. It does cost us to keep it sitting there even if no-one is using it.

Senator LUDLAM-Thank you for that. So, there are a couple of questions on notice. Returning to an issue that I think we spoke about in May or June, or whenever it was we were here last: ad breaks and funding, which I figure you assumed I would ask you about.

Mr S Brown-Yes.

Senator LUDLAM-Minister, feel free to step in, as I am sure you will, if you think it is within your purview. Given we are into a triennial funding round, would the government consider adjusting funding available for public broadcasters such as SBS in the middle of that round or will we need to wait until 2012 or thereabouts until we see increases in funding?

Senator Conroy-The government is always prepared to consider worthwhile funding concepts, but we have obviously just completed an increased funding for both the ABC and SBS. In the current economic climate and the restraint that many are calling for I do not foresee that there is much likelihood of that, but we do not have a closed mind. We have an open mind.

Senator LUDLAM-That was what I was trying to establish. You are not in any kind of policy straitjacket until that triennial funding period lapses before you start looking at an increase-

Senator Conroy-That is why it is known as a triennial funding period.

Senator LUDLAM-But you are not constrained within that period-

Senator Conroy-The government is the government.

Senator LUDLAM-Can you tell us-and I will put the question to you Mr Brown-whether there have been any formal or informal discussions around an increase in SBS funding to make up for any shortfalls that might arise as a result of cutting back on in-program advertising?

Mr S Brown-I think as I indicated last time we have not sought that arrangement. Our preference is that at this stage any additional funds go to expand our service. You have talked about online and SBS2. These are critical areas of necessary growth for SBS. If there were additional funds available from government our view is that they should be prioritised into that and also into radio rather than offsetting the commercial revenue at this stage.

Senator LUDLAM-Do you get a lot of feedback or criticism over the amount of advertising that you are running? Is it an issue that regularly pops up in email or snail mail feedback to the station?

Mr S Brown-We receive about two complaints a week and that is to be expected. It is not so much about the volume because the volume is a constant. It is five minutes and it always has been five minutes on both radio and television, and that is unchanged. But obviously the decision to place advertising in programs was controversial and some audiences resent it. When we first did it we attempted-and I think we were relatively successful-to explain why and pointed to the benefits on air for audiences that would not otherwise be there if we did not have sufficient commercial revenue. But there remains a group of viewers who perfectly legitimately hold the view that advertising does not belong on public broadcasting. That is something they
hold true to, and no amount of persuading them that, as they are watching East West 101 and Who Do You Think You Are? and The Nest, they would not be able to see all of these local programs we are currently showing if we did not have these additional funds.

Senator LUDLAM-The minister responded to a question on notice in May of this year that SBS's policy in respect of films that are longer than 60 minutes is that they would be broadcast with only two breaks. I do not have a number that I can quote back to you, but that was the response in May and that was affirmed by you, Mr Brown, again earlier this year.

Mr S Brown-Feature films; movies, in other words.

Senator LUDLAM-‘Films that are longer than 60 minutes'; I guess that would take in feature films, yes. But I am aware of a number of instances in which programs longer than 60 minutes are being broadcast with up to five breaks. I am just wondering how that policy is applied and why it is so uneven.

Mr S Brown-It might be helpful to know the examples, but in general the intention of that policy is to apply it to the specific feature films, which are always over an hour, and to have a very low level of interruption in them. But there are other programs that might exceed an hour. Sports events exceed an hour, for instance. Obviously, they are not films. If there is some ambiguity there that needs to be looked at. But my understanding is the intention of that guideline is to ensure that feature films are not interrupted with the same frequency as general programming.

Senator LUDLAM-The one example that I have here is the German film Eight Miles High, screened at 11 o'clock at night on 11 September 2009, which ran for nearly two hours and had five breaks and not two. That might be one example you could go back to and find out whether-

Mr S Brown-Thank you. It that is a feature film then, in my view, that is not in accordance with the guidelines we have laid down.

Senator LUDLAM-Perhaps you could follow up on that one. Again, on the same subject, Minister, I put a quote to you from May, which was, ‘Labor has opposed and continues to oppose the decision by SBS to introduce in-program advertising.' You came back with the comment that that was just an opinion and it was not actually Labor policy. Can you remember that exchange?

Senator Conroy-I do remember that exchange because, as I said at the time, I am very familiar with what Labor policy was. And you cannot point to anything that said it was Labor policy.

Senator LUDLAM-I can. I am just about to. I did not have that at the time. There was an email sent from you, one from Kevin Rudd, who was then opposition leader, and one from the ALP campaign information services that contained that quote under the heading Labor-

Senator Conroy-You have already given these to Crikey!; they have run them ahead of you.

Senator LUDLAM-No, I have not, actually. It was quoted under the heading of ‘Labor's SBS policy'. Is that in error? Can you acknowledge for us whether it was policy or an opinion?

Senator Conroy-You are misrepresenting that letter/email. I think it was a consistent response in both email and letters-

Senator LUDLAM-What would a true representation of it be if it arrived under the heading of ‘Labor's SBS policy'?

Senator Conroy-You are misrepresenting what it says in that document.

Senator LUDLAM-I just read a quote back to you. Is that quote in error?

Senator Conroy-Perhaps you would read it again, but I believe you are trying to misrepresent that quote.

Senator LUDLAM-I would not do anything of the kind: ‘Labor has opposed and continues to oppose the decision by SBS to introduce in-program advertising.'

Senator Conroy-That does not state that we would force SBS to stop it.

Senator LUDLAM-That you would do anything about it?

Senator Conroy-You continue to try to suggest that that is what it says. It is entirely your opinion.

Senator LUDLAM-No, that is what it actually says.

Senator Conroy-No. What you are implying-

Senator LUDLAM-I have read it to you twice.

Senator Conroy-You are implying it says that it was an ALP policy commitment to withdraw or to stop that funding, which it is not.

Senator BIRMINGHAM-I think the minister ultimately conceded, when he looked at the legal advice that he called for, that he was wrong and it was in fact within the act.

Senator Conroy-I did not say it was wrong. I just said that I accepted their legal advice. I think I stated that they believed their legal advice allows them to do this. Given that no-one has yet charged them for a breach of the act it is probably a reasonable assumption that their legal advice stands up.

Senator LUDLAM-You spent a lot of time prior to the election suggesting that you thought it was a breach of the act.

Senator Conroy-As I said, I have now seen the legal advice.

Senator LUDLAM-That is your act, though, now.

Senator Conroy-I accept that, but the implication that you are again trying to draw is just your assertion and your opinion. It is not a fact.

Senator LUDLAM-It arrives in an email headlined ‘Labor's SBS policy' but then you try to redefine it after the election as an opinion.

Senator Conroy-No, I am not redefining it as an opinion. I am simply saying to you that that is not a policy commitment to end the practice.

Senator LUDLAM-What does ‘continue to oppose' mean if not some kind of commitment to actually do something-

Senator Conroy-Now you are verballing and now you are attempting to draw-

Senator LUDLAM-I am reading the email that is right in front of me. There is no verballing going on.

Senator Conroy-Yes, that is exactly what you are doing. You are actually now trying to put words into my mouth rather than the words that are written in the piece of paper. You are saying, ‘But doesn't it really mean this?' I am saying to you: no, it does not.

Senator LUDLAM-Does the government continue to oppose in-program advertising? Does the Labor Party continue to oppose in-program advertising?

Senator Conroy-The Labor Party introduced advertising on SBS, so let us be very clear about this. We introduced advertising on the SBS.

Senator LUDLAM-Yes. Then did you proceed in the next step to oppose in-program advertising?

Senator Conroy-There are many letters-

Senator LUDLAM-In-program advertising-let us just stick to that.

Senator Conroy-No, many letters are written to us saying, ‘Abolish this.' They actually wrongly believe that you did it, Senator Minchin, in your government. I would be quite willing to make sure people understand that we introduced it. Am I excited by it? Absolutely not. But am I in a position that I can provide $20 million, $30 million or $40 million a year to make up for the lost advertising revenue? The answer is, no. Within the existing funding constraints the policy, as SBS board are enacting it, stands. Senator Birmingham has tried to torture me on this in his own mind extensively. Senator Ludlam, you are welcome to join in. You will get the same responses.

Senator BIRMINGHAM-Does the government no longer oppose in-program advertising on SBS? Does the Labor Party no longer oppose in-program advertising on SBS?

Senator Conroy-As I said, am I excited by it? No. But am I in a position that I can provide-

Senator BIRMINGHAM-I am not too fussed about your excitement levels.

Senator Conroy-Am I in a position that I can commit to either cause those programs to stop being produced or provide alternate funding for those programs that are receiving that advertising revenue? The answer is, no. So, within the existing budgetary funding constraints SBS will keep doing what they are doing and we are not in a position to change it.

Senator LUDLAM-You make it sound like a law of physics that you are in no position at all to do anything about.

Senator Conroy-Unless you have $30 million or $40 million that you would care to donate to the SBS I am not in a position to do anything about it.

Senator MINCHIN-Did you not seek to prevent the SBS having in-program advertising unless you could confidently, and to the SBS's satisfaction, recompense them for the loss of revenue?

Senator Conroy-Absolutely. If we were to follow Senator Ludlam's suggestion-

Senator LUDLAM-No, it is your suggestion in an email from you.

Senator Conroy-No, it is not my suggestion. I repeat: you are now for the third or fourth time attempting to imply what you think that letter or email means-

Senator LUDLAM-It is pretty unambiguous.

Senator Conroy-It does not say the words you are implying it says. It stands in its own right. It is very simple-

Senator LUDLAM-I am reading it directly from the email.

Senator Conroy-Yes, and then you are going on to try to extrapolate, imply or suggest what those words mean.

Senator LUDLAM-In that case, just for the record, can you tell me what I should assume this to mean: ‘Labor has opposed and continues to oppose the decision by SBS to introduce in-program advertising.' What sort of meaning should I draw from that if I am reading it wrongly?

Senator Conroy-That if we had been in government at the time we would not have done it. But we were not.

Senator LUDLAM-But you were not, you were in opposition.

Senator Conroy-That is correct.

Senator LUDLAM-Now you are in government.

Senator Conroy-And now we have seen the legal advice and we have the budgetary constraints that are on us and we are not in a position to reverse it. I do not know how much clearer I can be. But for you to suggest that we said in a letter that we would reverse it is clearly misleading this committee.

Senator LUDLAM-You would oppose it until you were in a position to do something about it, is what-

Senator Conroy-Three times you have attempted to suggest what you believe the meaning should be, want it to be, or was and none of them is correct.

Senator BIRMINGHAM-As you alluded to before, we did spend a lot of time in the February 2008, May 2008-

Senator Conroy-We did. I am happy to keep going over and over this.

Senator BIRMINGHAM-and October 2008 and the February 2009 estimates leading up to this. Because each time, of course, you told me that it would be a matter determined in the triennial funding agreement.

Senator Conroy-It was, and it was determined to leave it as it was as there was no available funding to replace the moneys currently being raised through those-

Senator BIRMINGHAM-Did you seek available funding to replace those-

Senator Conroy-I am not going to comment on budgetary matters and deliberations of cabinet.

Senator BIRMINGHAM-You spent so long in opposition, as Senator Ludlam is reminding us, that you were railing against this-

Senator Conroy-I did.

Senator BIRMINGHAM-and were so passionate that it was said that it was perhaps even a breach of the act, and then spent nearly 18 months in government leading everybody to believe that there was some-

Senator Conroy-No. You are falling into the same trap as Senator Ludlam. Frankly, I am disappointed about that.

Senator BIRMINGHAM-You kept telling me to wait for the triennial funding review.

Senator Conroy-You are now attempting to join Senator Ludlam in verballing both the Prime Minister and me.

Senator BIRMINGHAM-You allowed people, shall I say, to hold out hope until the triennial funding review that you might do something. I do not think that is verballing you. You continued to defer giving a commitment on the matter and saying, ‘Wait until the triennial funding review.'

Senator Conroy-That is not quite right. I accept the general thrust of what you are saying, but I do not accept your assertion that it was giving a commitment. I will accept the point you are making.

Senator BIRMINGHAM-You allowed people to hold out hope.

Senator Conroy-We went through the triennial funding round and the government was not in a position to commit the funds needed to offset the loss of revenue that would have occurred in the programs that are being produced.

Senator BIRMINGHAM-Did you champion that cause that you had so passionately championed in opposition?

Senator Conroy-As I said, I am not going to reveal cabinet budget discussions. I do not think Senator Minchin ever did whenever I sought to press him on these matters. As I said, I have always had a lot of admiration for Senator Minchin-

Senator MINCHIN-Very wisely.

Senator Conroy-and follow his lead on many matters.

Senator MINCHIN-Not all, regrettably.

Senator BIRMINGHAM-With that gratuitous love, I will let Senator Ludlam get back on track.

CHAIR-Move along please. Senator Ludlam.

Senator LUDLAM-No, I have had enough.


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