Submission to the Department of Communications, Information Technology and the Arts on Meeting the Digital Challenge April 2006 The Government of Western Australia welcomes the opportunity to comment on the discussion paper “Meeting the Digital Challenge: Reforming Australia’s media in the digital age”. It is pleasing to note that many proposals made in the State’s earlier submissions to the Commonwealth have been recognised. There are several issues that deserve further reflection, and these are discussed in this submission. KEY PROPOSALS PART 1 -A ROADMAP TO DIGITAL CONVERSION Digital Action Plan The Government proposes to develop a Digital Action Plan in partnership with stakeholders to expedite digital conversion, bring the simulcast period to an end and achieve analogue switchover. The Digital Action Plan would be released in 2006. The proposed Digital Action Plan would contain: i) a roadmap to guide the process and a time frame for the closure of analogue television services in Australia; ii) measures aimed at providing appropriate incentives to broadcasters, receiver manufacturers/importers and others to move to digital television; iii) appropriate incentives and potential assistance that may be required for consumers to move to digital television; and iv) the roles that various stakeholders and agencies would play in working together to achieve switchover, including the potential formation of a dedicated new organisation to oversee and co-ordinate the activities necessary to achieve analogue switchover. The Digital Action Plan would recognise the different requirements for achieving analogue switchover in metropolitan and regional areas nationally. It is pleasing to see that the idea for an “unambiguous and detailed”1 Digital Action Plan is being considered. The State’s earlier submission to the Department of Communications, Information Technology and the Arts (DCITA) noted some important points to be covered. While a number of concerns have been addressed in the discussion paper, some areas require greater focus. The road map should address how all of the country, and thus all viewers, will be covered. The Digital Action Plan will need to state whether the switch-off of analogue will be phased and, if so, the dates for each licence area/region, and how this will affect viewers in the junction between licence areas. 1 Submission to the Department of Communications, Information Technology and the Arts review of the Duration of the Analogue/Digital Television Simulcast Period, Department of Industry and Resources, November 2005 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 3 As noted in the State’s previous submission, “for a successful transition to digital television, there must be resolution of self-help services; [and] a successful transition for community broadcasters is needed”.2 How the Commonwealth Government decides to support the retransmission facilities is crucial. While the discussion paper mentions how the conversion of remote areas will be handled, the issue of what financial and other assistance will be available for communities upgrading their self-help facilities is not clearly addressed. The issue of how any viewers who currently receive a terrestrial signal but will only have access to a satellite broadcast will be treated, has not been tackled. It is dismaying to note that the only mention of community broadcasting in the discussion paper is in the section on Completing Digital Roll-Out where it states that the important issue of community broadcasters and other narrowcasters has “yet to be finalised”. The incentives for conversion and relief for consumers who find conversion inaccessible or expensive need to be refined and promulgated so that people do not wait until the last minute to adopt the new technology in order to qualify for a free set-top box and/or installation. The information and awareness program to ensure consumers are fully informed does not refer to Digital Broadcasting Australia (DBA), save for reference on a chart. The Western Australian submission identified DBA “as probably in the best position to coordinate an information and awareness campaign”3. The subscription telecasters and prospective telecasters should be encouraged to join the organisation, so issues can be addressed and explained to consumers with one voice. It is believed that this was to have been DBA’s role. The discussion paper makes no mention of what recourse there will be for complaints, nor does there does seem to be any reference in the paper to how the government will ensure that Australians will not continue to be sold television sets that are only suitable for analogue reception (that is, that are not part of a package with a digital set-top box). The Digital Action Plan is key to a successful conversion. It should be a strategy to address these issues. This should be developed as soon as possible, with a period of public comment before 2 Ibid, p. 2 3 Ibid, p. 8 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 4 finalisation. The removal of the uncertainty regarding the changeover to digital will increase the take-up of digital services by consumers and the offering of services by broadcasters. PART 2 -ENABLING A DIGITAL ENVIRONMENT 2.1 NEW SERVICES ON SPARE SPECTRUM AND OTHER PLATFORMS Fourth network moratorium Preferred options: i) The moratorium on new commercial television licences, which expires on 31 December 2006, would not be extended. ii) The Government will legislate to transfer the decision-making power for the allocation of new commercial FTA television licences from ACMA to the Government, consistent with its election commitment. iii) No new licences for commercial FTA services in BSB spectrum will be allocated at the conclusion of the moratorium. iv) Prior to the end of the simulcast period and in accordance with the Digital Action Plan, the Government will review whether additional FTA commercial television licences should be allocated using BSB spectrum. It is not envisaged that any new licences would be allocated prior to the end of the simulcast period. There is no evidence that a fourth commercial television service will increase the amount of local content or increase diversity, and it may affect the spectrum availability for community television. Before a decision for a fourth commercial television service is made, or any further allocation of the two channels mooted nationwide, there needs to be an independent assessment of both the viability of the additional services and of the net overall benefits to consumers. The Western Australian Government sees no need to activate a fourth network, certainly not in place of a community or datacasting service. A service that would specialise in Australian content is a worthy goal, but real local content is sought – locally produced programs, especially news and current affairs. Localised diverse services can provide a greater number of employment and training opportunities than a monolithic national service. Opportunities for Western Australians to follow a broadcasting career are better served with a local service than having to line up for auditions for reality television shows. 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 5 This underlines the requirement that an independent assessment under the auspices of the Australian Communications and Media Authority (ACMA) needs to be made regarding additional channels. No allocation should be made prior to the end of the simulcast period. The political arm of the Commonwealth Government should have a minimal role in the allocation of broadcasting licences. It should maximise the use of independent advice, such as would be offered by ACMA. ACMA’s expert advice should be relied upon in areas such as determining community interest in the allocation of new licences. Its role could be strengthened to provide the necessary investigations into the worthiness of a licence holder. Community consultation and input is vital. The process for allocation of any new licences and the actual allocation must be seen to be independent of potential political influence and so should be arm’s length from the political arm of government. A merit-based system for allocating new licences would be worth considering. One of the elements of a merit-based system should also be the financial capacity to sustain a broadcasting service for the licence period. However, financial endowment should not be the determining factor. Money should not automatically qualify an applicant for the public trust of a broadcasting licence. New licences should continue to be issued individually for designated licence areas. Monolithic networks are to be avoided: the Western Australian Government places great stock in local content in broadcasting, and a potential applicant having to prove it can and will serve a local area is one means of assuring this. New digital services on broadcasting spectrum Preferred options: i) Two reserved digital channels of terrestrial spectrum would be allocated as soon as practicable in 2007 in markets for new digital services. ii) From 1 January 2007, subject to licence requirements, options for these services may include subscription TV services, FTA niche ‘narrowcasting’ services, as well as interactive and short video or ‘datacasting’ services, whether delivered to fixed or mobile television receivers. They would not include a new FTA commercial television service. iii) This would provide opportunities for new innovative digital service options of interest and value to consumers, rather than services that mirror traditional television services. iv) Commercial and national broadcasters would continue to be permitted to provide datacasting services on their existing digital spectrum. v) The current prohibition on commercial and national broadcasters being able to control datacasting transmitter licences would be retained. 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 6 vi) The Government would consider what, if any, obligations or restrictions should be placed on operators of these new digital services and the manner in which the channels should be allocated. In doing so, the Government would have regard to the obligations and restrictions currently applying to FTA and subscription broadcasters. The Government of Western Australia maintains its support for community television’s access to a full digital channel. As recently as last month in the State’s submission to the House of Representatives Inquiry into Community Broadcasting, it was stated that “Allocation of a full bandwidth segment is crucial in order for digitised community television services to achieve its potential. 7MHz channels should be made available for a full-time community/educational television service nationwide. The experience of Access 31 in Perth shows that with full-time, fullspecctru access and a wide array of content providers, including educational and training material and government services, a successful alternative programming source can exist”4. The State Government has long been interested in a datacasting channel and would be keen to participate in a trial, such as exists in New South Wales, to deliver Western Australian Government educational, training and other services interactively through the ubiquity of television. Experiments to provide these services through other platforms would certainly be examined carefully in Western Australia. Given the still-limited amount of spectrum space available and a desire to provide diversity in sources, it is recommended that the services on the new platforms be subject to the rules relating to licence area ownership, 75 percent audience reach and cross-media ownership. The above options are therefore supported apart from the failure to address the need for spectrum allocation for community television. New digital services on other platforms Preferred options: i) The Government will legislate to transfer the decision-making power for the allocation of new commercial FTA television licences delivered outside BSB spectrum (such as wireless, satellite and broadband services) from ACMA to the Government. 4 Submission to the House of Representatives Standing Committee on Communications, Information Technology and the Arts inquiry into Community Broadcasting, p. 7, Department of Industry and Resources, March 2006 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 7 ii) In considering applications for such licences after 31 December 2006 the Government will consider whether allocation is in the public interest. The process for allocating such licences will be considered further. iii) Commercial FTA broadcasting services operating outside the BSB spectrum would be exempted from the media ownership and control provisions of the Broadcasting Services Act 1992, at the same time as commercial BSB broadcasting services and newspapers are exempted. iv) Commercial FTA broadcasting services operating outside the BSB spectrum would remain subject to general competition law and the Foreign Investment Policy provisions relating to ‘sensitive sectors’ including the media. v) The Broadcasting Services Act 1992 would be amended to provide that the acquisition of rights to an event on the anti-siphoning list by a commercial FTA broadcaster operating outside the BSB would not satisfy the requirement that before a subscription TV licensee could acquire rights, a national or commercial FTA broadcaster must have acquired the rights or the event has been delisted. As noted above, the political arm of the Commonwealth Government should have a minimal role in the allocation of broadcasting licences. All free-to-air telecasters, especially community stations, should have an opportunity to air major sports programming before they are made available to non-BSB telecasters or subscription TV. 2.2 EXPANDING SERVICE OPTIONS FOR EXISTING FTA BROADCASTERS a) Consequences of analogue switchover i) Analogue switchover and the end of the simulcast period would provide a natural point, from both a practical and policy perspective, for further changes to the digital television regime. Given that the conversion to digital broadcasting has already been dragging on for a number of years leading to uncertainty and complacency in the marketplace, the sooner the analogue switchover takes place the better. Under the current proposal the analogue switchover will occur progressively between 2010 and 2012, the delay in introducing further changes is too long. A more appropriate date would be linked to the Digital Action Plan. This plan, developed with public input and comment should include strategic decisions on timing of changes. 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 8 b) Multichannelling Commercial broadcasters Preferred options: i) The current restrictions on commercial television broadcaster full multichannelling would be removed at the end of the simulcast period, consistent with the transitional nature of the current policy settings and the Digital Action Plan. ii) The Government is prepared to reconsider the timing for relaxation of the restrictions on full multichannelling should there be any significant changes in the lead up to analogue switchover which alters the balance in favour of an earlier adjustment. iii) Arrangements for the regulation of multichannels by commercial FTA broadcasters, including, for example, appropriate Australian content rules and captioning obligations, would be considered prior to the end of the restrictions on commercial television broadcaster multichannelling. In considering such arrangements, the Government would have regard to the obligations applying to other digital services. iv) In the event the restrictions on commercial broadcaster multichannelling are removed prior to the end of the simulcast period, to maintain the integrity of the anti-siphoning scheme, commercial broadcasters would be prohibited from televising sport on the antisiphhonin list on any new digital channel unless the sporting event has already been shown (or is simultaneously shown) on the main service. v) Prior to the expiry of the anti-siphoning list on 31 December 2010 and the end of the simulcast period, the Government would review the ongoing rationale for the antisiphhonin scheme including the restriction on commercial broadcasters televising sport as set out in paragraph (iv) above. National broadcasters Preferred options: i) The genre restrictions on national broadcaster multichannelling would be removed as soon as practicable, upon passage of the necessary legislation. ii) The Government would continue to monitor the issue of local content levels on the national broadcasters. iii) To maintain the integrity of the anti-siphoning scheme, the national broadcasters would be prohibited from televising sport on the anti-siphoning list on any new digital channel unless the sporting event has already been shown (or is simultaneously shown) on the main service. iv) Prior to the expiry of the anti-siphoning list on 31 December 2010 and the end of the simulcast period, the Government would review the ongoing rationale for the antisiphhonin scheme including the restriction on the national broadcasters televising sport as set out in paragraph (iii) above. The Western Australian Government strongly supports multichannelling on the digital spectrum for all telecasters. It can increase localism and the diversity. Multichannelling would provide better local services and programming to all Australians. The restrictions for commercial services to multichannel should be lifted as soon as possible in order to encourage digital uptake. Hopefully, regional areas would benefit from this acceleration as well. 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 9 Programs can be enhanced with language versions or localised references. Specific interests can be catered for at the same time: local news can be further localised by presenting the local news at a single time slot with multichannels devoted to different geographic areas. A 6:30pm local newscast could be multichannelled for northern, southern, eastern and western suburbs. A football show could be multichannelled for Aussie Rules, Rugby Union, Rugby League, Soccer and Gridiron. Previous submissions have recommended that licensees should be required to include local content (program and advertising) in different regions within their licence areas, whether through multichannelling or other means. With the new technologies available, adoption of the MPEG-4 standard might ease the transition as well. c) High Definition television Preferred options: i) The current HDTV quota of 1040 hours per year would be retained until the end of the simulcast period, consistent with the transitional nature of the current policy settings and the Digital Action Plan. ii) As an interim measure, from 1 January 2007, the Government could remove the requirement that the HDTV version of a digital television service be a simulcast of the SDTV service. This option would effectively allow FTA TV broadcasters to run one multichannel in HDTV in advance of switch-off. iii) To maintain the integrity of the anti-siphoning scheme, broadcasters would be prohibited from televising sport on the anti-siphoning list on any non-simulcast HDTV channel unless the sporting event has already been shown (or is simultaneously shown) on the SDTV service. iv) In the event the Government does not implement the option in (ii) above, regional broadcasters would be permitted to provide a single HDTV service throughout their licence area without the requirement for multiple local break-outs. The Government of Western Australia is concerned about eventual access to HDTV (High Definition Television) in the most remote parts of the State. The State Government seeks complete HDTV penetration of the non-metropolitan licence area by 2010 based on a progressive roll-out schedule and consideration of financial support to viewers, telecasters and self-help retransmission groups.5 HDTV is a potential driver of take-up, particularly for those viewers who have switched to digital for the picture quality. 5 Provision of Commercial Television Broadcasting Services After December 2006, Department of Industry and Resources, September 2004 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 10 The transition to digital and thus HDTV must be kept as simple as possible, with the goal of having a single upgradeable set top decoder for all television services. Ideally, this set-top box will also serve as a return path for interactive services, if not already built in to receivers. Any viewer who wishes to receive an HDTV service should be able to receive a full suite of free-to-air services at minimal extra cost – that is, without the need for another separate set-top box. HDTV should be accessible to all, but not at the cost of any local programming. All free-to-air telecasters must be required to eventually provide HDTV. Quotas can be lifted, but this should not be an excuse for a withdrawal of localised services. As well as assisting individual viewers and telecasters to convert to HDTV, the Commonwealth should pay special attention to areas reliant on self-help retransmission schemes as the only means of access. d) Anti-Siphoning Preferred options: i) Commencing 1 January 2007, a “use it or lose it” scheme would be introduced for events on the anti-siphoning list, based on the results of ACMA’s first year of monitoring. ii) The scheme would identify criteria against which “use” of an event by a FTA broadcaster could be measured and, if the event is not “used”, it may be removed from the antisiphhonin list. iii) Ministerial discretion would be retained in respect of any decision to remove events from the anti-siphoning list. iv) The ongoing rationale of the anti-siphoning scheme and the extent to which it is meeting its objectives, would be reviewed in 2009, prior to the new list expiring on 31 December 2010 and in the context of the end of the simulcast period. This review would also consider the restriction on commercial and national broadcasters televising sport on the anti-siphoning list on any new digital channel. v) The Government would continue to monitor the matter identified by FTA broadcasters as the “loophole” in the anti-siphoning regime. Hoarding is the bane of the average viewer. While the “use it or lose it” approach is commendable, all free-to-air telecasters – especially community stations – should be given an opportunity to air major sports programming before they are made available to non-BSB telecasters or subscription TV. This would include multiple-round tournaments, where the events that are less 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 11 attractive to the licence-holder can be made available first. Free-toaai multichannelling may solve this problem somewhat. The 50% of the population reach figure mooted as a criterion for assessment of adequate usage might work well for New South Wales and Victoria but it would not be acceptable to Western Australia or the other less populous States. Even more important than the population skew is the fact of the time difference. Events that cannot be shown live on the East Coast are often dismissed, and thus not shown in Western Australia. This is one reason that Access 31 was able to gain the Ashes series, because the local commercial station had other network obligations. 2.3 MEDIA OWNERSHIP AND CONTROL Foreign ownership Preferred options: i) The current media-specific foreign ownership rules in the Broadcasting Services Act 1992 would be removed. ii) The current newspaper-specific foreign ownership restrictions in the Foreign Investment Policy under Foreign Acquisitions and Takeovers Act 1975 would be removed. iii) The media would be retained as a ‘sensitive sector’ under the Foreign Investment Policy. iv) Proposals by foreign interests to directly invest in the media sector, irrespective of size, would remain subject to prior approval by the Treasurer. Cross-media transactions Preferred options: i) The cross-media rules would be amended to allow cross-media transactions to proceed, subject to there remaining a minimum number of commercial media groups in the relevant market (four in regional markets, five in mainland state capitals). ii) Existing limits on broadcasting licences would be retained: a maximum of two commercial radio licences in a radio licence area; one television licence in a licence area, and no more than 75 per cent national television reach. iii) Public disclosure would be required when a media outlet reports on the activities of a cross held entity. Regional services protections Preferred options: i) A legislated requirement would be established for the continued imposition of licence conditions in key regional commercial television markets to provide minimum levels of content on matters of local significance. ii) ACMA would continue to ensure there is genuine competition between regional radio licensees through the requirement that, following the sale of a commercial radio licence, if the program format of that service changes from one of broad appeal to one of more 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 12 limited appeal, it considers the allocation of a new commercial radio broadcasting licence in that licence area. iii) ACMA and the Government would continue to monitor the provision of local content in other television licence areas and on regional commercial radio services. The Government may consider extending licence conditions relating to levels of local content to those markets if local content levels decline materially. It is important that the media remain a “sensitive sector” under the Foreign Investment Policy. The description of the new cross-media rules is satisfactory. Local content and ownership should not, however, be applied solely on a national or international basis – local content and ownership should be applied locally. Any new regulations should include provisions for local voices to be heard and seen. It does not matter if there will be five different voices allowed in Perth and four in Geraldton, if all of them are from Sydney. The floor on voices in a market must not be seen as a ceiling; local and regional voices must be encouraged. Only one of the current eight commercial voices in Perth is locally owned and operated. Similarly only one of the current five commercial voices in Bunbury can be considered local. It could also be disputed that just because a company is larger, it does not necessarily follow that it is more innovative. Media conglomerates are taking over all forms of electronic communication, but not necessarily encouraging creativity. The new media’s proliferation is often a reflection of the old media finding a new outlet. Diversity in station formats is welcomed; however, there must be a licence requirement that all stations must provide locally oriented, if not originated, content based on the site of the transmitter. Even if there is a repeater station, some provision must be made in a station’s programming that such a licence area is truly being served. The amount of local content can be balanced to the size and value of the market. A station in Perth would be required to have a significant amount of statewide and local content, whereas the licensee repeating the service in Karratha would carry the significant statewide programming from Perth but insertions of news, advertising and community announcements relevant to the area the licence covers. An examination of the term “matters of local significance” is needed. Representation in the calculation of these matters should include all facets: news, advertising, community announcements, and of course, any programming. It should apply not only to 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 13 regional telecasters, but all licensed broadcasters under the province of ACMA. The requirement for local content should apply to the national broadcasters as well. Recognising those needs further strengthens the cases for the support of multichanneling and community broadcasting. Regulators’ role Australian Competition and Consumer Commission Preferred options: i) Media mergers would continue to be subject to the general mergers provisions of the Trade Practices Act 1974. ii) The ACCC would assess the competitive impacts of transactions, in accordance with the requirements of the Trade Practices Act 1974. Australian Communications and Media Authority Preferred options: i) ACMA would oversee the operation of the Broadcasting Services Act 1992 in relation to media transactions to ensure they comply with the ‘minimum number of media groups’ requirement and the licence and reach limits. ACMA’s enforcement powers under the Broadcasting Services Act 1992 would be enhanced to enable it to make more timely and proportionate responses to industry activity. The suggested roles of the ACCC and ACMA are welcome. Strengthening ACMA’s capacity to deal effectively with regulatory breaches is essential. Timing Preferred options: i) Media ownership reforms could take effect following automatic changes to the regulatory framework in 2007 that would also allow new licences for digital services on reserved spectrum to be allocated. ii) Alternatively, media ownership reforms could be linked with the end of the simulcast period, in line with the Digital Action Plan. It might behove the Commonwealth to compromise between the two alternatives. Action to address the issues raised is needed sooner rather than later, but they are issues that should form part of the Digital Action Plan with the plan specifying the effective date. This does not need to be delayed until the end of the simulcast period. 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 14 PREVIOUS RELEVANT SUBMISSIONS Relevant documentation on issues raised in this submission. Copies available upon request. 1. Submission to the House of Representatives Standing Committee on Communications, Information Technology and the Arts inquiry into Community Broadcasting Department of Industry and Resources, March 2006 2. Submission to the Department of Communications, Information Technology and the Arts review of the Duration of the Analogue/Digital Television Simulcast Period Department of Industry and Resources, November 2005 3. Submission to the House of Representatives Standing Committee on Communications, Information Technology and the Arts inquiry into the Uptake of Digital Television in Australia Department of Industry and Resources, September 2005 4. Review of Broadcasting Services Bands Spectrum Department of Industry and Resources, December 2004 5. Provision of Commercial Television Broadcasting Services After December 2006 Department of Industry and Resources, September 2004 6. Provision of Services Other than Simulcasting – Response to DCITA Review Department of Industry and Resources, July 2004 7. Telecommunications Needs Assessment: the communications needs of regional Western Australians Department of Industry and Resources, July 2003 8. Response to DCITA Proposal for Community Broadcasting Arrangements Department of Industry and Technology, September 2002 9. Digital Transmission of Community Television: Response to DCITA review Department of Industry and Technology, July 2001 000118.dan.scherr.doc Last printed 05/02/2008 6:25:00 PM 15 CONSULTATIONS The following organisations have provided comments in the preparation of this submission: Access 31 Perth Radio for the Print Handicapped Australia SBS CONTACTS For more information regarding this submission, please contact Dan Scherr Senior Project Officer Communications Technology Development Branch Department of Industry and Resources 1 Adelaide Terrace East Perth WA 6004 tel 08-9222-0430 fax 08-9222-6162 Dan.scherr@doir.wa.gov.au or Sheryl Siekierka General Manager Communications Technology Development Branch Department of Industry and Resources 1 Adelaide Terrace East Perth WA 6004 tel 08-9222-0432 fax 08-9222-6162 Sheryl.Siekierka@doir.wa.gov.au