Hello and welcome to the BRR Legal Brief,
where we bring you the latest legal news affecting
corporates. Today we're looking at the Convergence
Review, which released its final report on
Monday. Joining me to discuss the review and
its recommendations is Peter Leonard, who's
a Partner from Gilbert + Tobin. Peter thank
you for joining us again in the studio.
Pleasure Kate.
Now Peter I'd really like to start firstly
with your general impressions and whether
you think it's likely to be welcomed by industry?
Well this is a really interesting report and
like all reports that propose radical change
most people in industry will find things that
they don't like, and a few people will find
things that they really do like. But the first
thing I'd say is that I think it's actually
a ground breaking report on a global scale.
It's the first time a body such as this, has
looked at free to air television, pay television,
newspapers, magazines, local newspapers in
the country and radio as all ways of communicating
with the public and basically taken the position
that there should be the same set of simple
rules that apply across all of those. The
second thing is that it starts with an interesting
proposition that Australians want diversity
in media ownership and content regulation.
That they expect content standards and that
they want Australian content. And the finding
that Australians want Australian content inevitably
leads to some controversial findings because
then they say regulation is necessary to get
sufficient local content and that may include
regulation of online services, and newspapers
to ensure sufficient local content in those
as well. The other thing that's radically
different about this report is that it proposes
a big shift of power from Canberra to an independent
regulator. Now traditionally broadcasting
policy in this country has been very closely
controlled by the government, the Minister
and the Minister's Department, what this report
proposes is that important policy decisions
would be made by a regulator that really functions
a bit like a corporation that has a large
degree of independence from government, under
the oversight of the Parliament rather than
the Minister. And I think that will be an
interesting pill for the Minister to swallow,
because what it really says is that if the
Minister accepts the Committee's recommendations
that Minister and Ministers in the future
will have a lot less power to influence broadcasting
policy than they do today.
And Peter I'd just like to move on to surprises.
Were there any major surprises in the final
report?
I think some of the areas where the Finklestein
Inquiry which you might recall was the committee
that looked at regulation of the print media,
and it came out with a recommendation that
in essence regulation of the print media should
be done by a government appointed body rather
than the Press Council, and should be extended
to television and new media including any
internet site that got more than 15,000 hits.
And that was a pretty radical proposal because
in essence it extended press regulation across
new media and applied the same rules across
the broadcast television and pay TV. I was
not surprised to see that the Committee back
away from that, but it backed away quite a
distance and in the end it introduced an idea
of content service enterprises and regulation
specifically targeted at those and in doing
so it proposed thresholds both as to audience
reach and Out of Australia Revenue bill that
in essence meant that only 15 enterprises
on the Committee's own modelling would be
regulated as content service enterprises.
So that's a really significant narrowing of
regulation from today. On the one sense it
broadens out in that newspapers become regulated
the same way as television and radio and Pay
TV and all in essence come under the same
regime, but it narrows it down to effectively
only 15 enterprises at the highest level of
regulation, whereas today regulation applies
across dozens and dozens of radio stations,
television stations and so on.
And Peter just moving back to the review,
what do you see is they key recommendations
to come out of it?
I think really the key recommendation is that
the independent regulator have a broad policy
setting agenda, and that is quite a radically
different concept to the Minister making the
rules. The other thing that's quite different
about this report is that it says that there
should be a national interest test applied
to any change in ownership and control of
these 15 or so major enterprises who are regulated
as content service enterprises. So potentially
that means that this new independent regulator,
if there was to be a change of control of
Foxtel, of News Limited, of a television station,
of a major radio network, could potentially
launch an inquiry as to whether that change
of control is in the national interest or
not, and could conclude that a change of control
is not in the national interest. So in this
new world you would have regulation by the
ACCC as to whether a change of control is
anti-competitive, and you would have potentially
parallel regulation by this new independent
regulator looking and applying a national
interest test, and amongst other things considering
whether the effect of a change of control
or merger might be to reduce diversity of
media ownership or reduce the number of voices
that are heard on Australian media.
And just keeping with media ownership, there
were some submissions that media ownership
limits should be abandoned, what did we end
up with?
Well there's two layers of regulation proposed;
one in essence looks at the national level,
and applies this national interest test to
the content service enterprises, subject to
the highest level of regulation, and then
there's another "separate test" that would
apply in so called local markets, and the
concept there is that whatever diversity of
voice there is at the moment in local markets
should remain. So if there were to be a change
of ownership or control that had the effect
of reducing the diversity of voice then again
this independent regulator could express a
view on that and potentially stop that from
occurring. So there's two separate layers
of regulation looking at the national voice
and diversity at that level, and then the
second goes away from the complicated and
highly prescriptive rules that currently apply
to television and radio and instead has this
broad concept of in essence diversity of voice
in local markets.
And just keeping with regulations, what were
some of the recommendations? And were new
content providers, such as bloggers, included?
Yeah that's an interesting question because
the regulation that is proposed is at a few
layers, and for example, there's proposed
regulation around news and commentary services
that would apply automatically, mandatory,
to the 15 or so largest content service enterprises.
Then smaller news and comment sites or bloggers
could elect to join the new Media Council
in essence that would be the first layer of
regulation, and they would get some advantages
for doing so, specifically the Committee suggests
that they get some of the protections that
exist under the Competition and Consumer Act
and the Privacy Act for media organisations,
so there would be an incentive for bloggers
to join the organisation to get the benefit
of those protections but the price as it were
would be that they would then be subject to
the rules about fairness and balance and truth
in reporting that the Committee proposes that
this new regulatory body would apply. So the
Committee in essence proposes two regulatory
bodies, an industry lead body that's like
a council, a board and press council, and
then the independent regulator standing behind
it who might then investigate things if it
consider that the Media Council hasn't done
an adequate job or is taking too long or is
not taking up causes that the independent
regulator thinks that it should. So quite
an interesting regulatory structure that will
have compulsory members and potentially a
range of other people who might elect to join
up to it as well, and then it operates in
essence under the umbrella of supervision,
oversight of this independent regulator.
Well lots of recommendations in the report.
But what are the next steps?
Well that's an interesting question as well.
I noticed in the media today that Senator
Stephen Conroy was somewhat laughingly rejecting
a suggestion that he'd committed to respond
to the report by June. So that seemed to be
sending a clear signal that the Minister was
not going to allow his timetable to be set
by the media. Whether the Government does
in fact respond by June or July or August
we simply don't know, Senator Conroy's not
said. I mean I think that what will happen
is that the Government will watch very closely
commentary in the media and academic circles
about these proposals and will adjust what
it's going to say accordingly, it wouldn't
surprise me if we see separate announcements
by the Minister as to what recommendations
the Minister supports, or maybe commissioning
further research into, so I think we're not
going to hear a comprehensive response from
the Government quickly, but the Government
will need to respond because the media is
very interested in the outcome of these recommendations
and you can be sure they're going to be on
the Minister's case.
Yeah certainly. It looks like a bit of a waiting
game. Peter thank you so much for joining
us in the studio again.
Pleasure Kate.
And thank you viewers for joining us on the
BRR Legal Brief, of course we will be back
next week.
