On 30 April, the Convergence Review Committee issued its hotly anticipated Final Report which sets out proposed changes to Australia's media regulatory framework. The Review emphasises a shift from 'black letter law' regulation towards flexible principles-based regulation.
Although the Review notes that its starting point was the removal of unnecessary regulation, it identifies three areas that justify continued government intervention:
- media content standards across all platforms
- the production and distribution of Australian and local content, and
- media ownership.
What entities does the Review primarily target?
The primary targets of regulation under the Review are ‘content service enterprises’ (CSEs), defined as enterprises with:
- control over the professional content they deliver
- a large number of Australian users - a proposed initial threshold of 500,000 users per month, and
- a high level of revenue derived from supplying such content to Australians - a proposed initial threshold of $50 million per annum of Australian-sourced content service revenue.
Modelling conducted for the Review indicates that currently only existing broadcasters and the larger newspaper publishers would be classified as CSEs, with entities such as Apple, Google and Telstra not qualifying.
Who is to regulate?
The Review also recommends the establishment of two separate bodies:
- a statutory regulator (incorporating a Classification Board) - replacing the Australian Communications and Media Authority (ACMA) to define the thresholds for CSEs, administer the ‘minimum number of owners’ rule and public interest test (see below), and ensure that content obligations are applied and
- an industry-led body to oversee standards for news and commentary across all platforms, in contrast to the Report of the Independent Inquiry into the Media and Media Regulation 's proposed publicly funded statutory authority. CSEs would be required to be members and provide the majority of funding, with Government contributions limited to specific purposes. Other media organisations would also be able to become members.
Media content standards across all platforms
The Review proposes a technology-neutral approach to content regulation and the application of a common classification scheme for content distributed by content providers to the Australian public. Once classified, this classification would be applied across all platforms. Unlike the current co-regulatory complaints system, the new regulator would be responsible for complaints and enforcement.
The review also recommends that CSEs be subject to other content standards where there is a case for regulatory intervention (eg. children's television standards). Content providers that are not of sufficient size and scope to qualify as CSEs would also be able to opt in to content standards or develop their own codes. The proposed framework also excludes social media and other user-generated content, but such sites will be encouraged to adopt self-regulatory standards.
The Review proposes the replacement of previous rules with a 'minimum number of owners' rule so that no media operator has a dominant influence in a local market for news and commentary. Such a rule, with different quantitative limits to be set for metropolitan and regional markets, would apply to all CSEs and media operators with significant influence in particular local markets. The Review also recommends that a public interest test apply to changes in control of CSEs of national significance. This raises the spectre of lengthy public hearings in relation to changes in control, a regime which was rejected when the current Broadcasting Services Act 1992 (Cth) was introduced.
The Review proposes a 'uniform content scheme' requiring CSEs that offer 'professional television-like drama, documentary or children's content' to invest a percentage of revenue in Australian content (investment option) or alternatively, to contribute a percentage of revenue to a ‘converged content production fund’ (contribution option). Modelling conducted for the Review indicates that currently only 'traditional broadcasters' would fall within this scheme.
Other matters covered in the Final Report
The Review also proposes new arrangements for the allocation and management of broadcasting spectrum and makes recommendations in relation to public and community broadcasting.
The Review recommends replacing the current revenue-based licensing system under the Broadcasting Services Act with spectrum licences subject to market-based annual fees. The Review states that under the new regime, free-to-air broadcasters 'may pay less' than licence fees paid in 2010-2011.
The Review has quashed hopes of a fourth commercial television network, instead recommending that capacity on the 'sixth channel' be awarded to a diverse range of providers, with established commercial and public broadcasters excluded from obtaining capacity.
Public and community broadcasting
The Review recommends that the charters of the ABC and the SBS be updated and proposes Australian content quotas of 55% for the ABC's main channel and 22.5% for SBS. The Review also recommends continued support and funding for community broadcasters and the availability of spectrum to such broadcasters for radio services and on the ‘sixth channel’.
The Review has already been heavily criticised by various sectors of the media industry and by the Opposition spokesman, Malcolm Turnbull. As the proposals are far reaching, it is likely that they will be the subject of ongoing and vigorous debate and it is unlikely that we will see any significant changes in the near future.