Saturday, March 18, 2006

Paul McIntyre: Media silently digests plans for deregulation

Australia's big media groups have gone eerily quiet after a big bang earlier in the week when the Federal Government finally flagged detailed plans to deregulate the A$12 billion industry as early as January.

The headline items in the proposed overhaul include the lifting of foreign media ownership limits, the abolition of cross media rules forbidding common ownership of radio, print and TV assets in one capital city market, and the introduction of multi-channelling for the commercial broadcasters in which they can air different content on their second high-definition digital channels.

There's plenty to discuss in the proposals, but media groups are uncharacteristically silent on what they think of the Government's ideas, mainly because Communications Minister Helen Coonan has threatened if she can't get widespread agreement from the media on what needs to change, the rules will stay as they are.

The biggest private gripe so far is from non-TV network media owners over the continuing protection of free-to-air TV networks.

No fourth TV licence will be issued until at least 2012 and spectrum allocations for new media applications such as mobile phone TV will only be allowed if they do not resemble current TV broadcasting. Moreover, any company seeking to launch internet TV initiatives will be prohibited without a licence if they too look too close to existing TV network programming.

"If somebody wants to set up a broadband television channel [which resembles free-to-air TV], that is the sort of thing where we regard it as appropriate to have a licence," Senator Coonan said this week.

But in trying to fend off criticism over the Government's protection of broadcasters, Senator Coonan signalled that the cosy TV oligopoly will end in 2012.

But just how sweet the Government is with the free-to-air TV owners - the Packer/PBL-controlled Nine Network in particular - was seen this week when for perhaps five hours on Wednesday the prospect of public broadcaster, the Australian Broadcasting Corporation (ABC), airing ads on its radio and TV networks looked very real.

That was before Prime Minister John Howard got wind of the momentum and promptly starved the thing of oxygen. Howard's rationale for rejecting ads on the ABC had little to do with a purist anti-commercial vein for public broadcasting. Rather, it was the revenue impact it might have on his friends in commercial TV land that appeared to concern him.

Estimates by media analysts such as Fusion Strategy put potential ABC TV ad revenues at A$520 million using a "fully commercial" model - that is, about 14 minutes an hour of ads. On a "semi-commercial" basis, ABC TV could pull A$240 million annually.

There remains significant Government backbench support for the ABC to take advertising, but Howard's comments stalls things. "I think the ABC does a good job," he told ABC Radio on Wednesday. "I'm a supporter of the public broadcaster and I don't myself think this possibility of advertising on the ABC is going to amount to anything. I'd be very surprised if that were to occur.

"And there is an argument that there's a limited pool of advertising dollars and if they are spread further around then it makes the position of the commercial TV stations, well, it alters their position, because they don't get any public funding. But if they have to compete with the ABC, well that has implications, doesn't it?"

Senator Coonan fell quickly into line, despite hinting earlier about the ad possibilities on the ABC. "People need to take a cold shower. I have killed that idea stone dead."

One of the biggest challenges for the Government and industry in the proposed regulatory changes is switching off the analogue TV signal by 2012 - an effort which requires Australians to convert 14.5 million analogue TV sets.


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