Malcolm Turnbull, Mitch Fifield set to dump TV reach rule

The Australian | Darren Davidson and Michael Bodey | 9 November 2015

Media reform will be discussed by cabinet this month, with Malcolm Turnbull poised to abolish the population reach rule and television licence fees in the current parliamentary term.

Despite strong opposition from some players that led to the plan being ditched earlier this year, a recommendation to cabinet and a public policy announcement could be made by Comm­unications Minister Mitch Fifield as soon as this week, sources say.

A decision in the sitting week of November 23 is most likely, ­because speculation suggests draft legislation is yet to be framed, ­limiting the ability for quick ­mergers and acquisitions, as happened within days of the 2007 cross-media ownership changes when Nine and Seven both sold to private equity partners.

There is a growing belief the commercial free-to-air networks have also succeeded in their ­request to have TV licence fees axed altogether after progressive cuts in recent years.

The abolition of the current structure, in which the Seven, Nine and Ten networks pay 4.5 per cent of gross revenues in licence fees, will be the major philosophical statement by the government.

It will argue that the value of public airwaves has been rendered zero by the emergence of a growing band of internet-based TV services including US giant Netflix, Nine and Fairfax joint-venture Stan and Google’s YouTube amid hefty licence writedowns by the networks on their balance sheets. The move will add tens of millions to the bottom lines of the three networks and it is not anticipated there will be a “quid pro quo” for some fees to be contributed to a production fund or a local production quota.

Initially, local content quotas for prescribed percentages of drama, documentary and children’s programming are not expected to be ­altered despite considerable free-to-air lobbying against them.

Senator Fifield is also seeking to retire the “two-out-of-three” cap that limits deals between print, radio and TV companies and is a legacy of laws imposed in the 1980s before the arrival of the internet.

However, the government may leave this regulation untouched if it believes it cannot get sufficient support from both houses.

Labor is divided over the “two-out-of-three” rule as some MPs oppose the change while others accept that the internet has made the current rules obsolete.

A spokeswoman for the Prime Minister directed inquires to Senator Fifield’s office, which declined to comment. A month after commencing high-level closed-door meetings with media bosses and proprietors, Senator Fifield is on tour, with meetings scheduled to take place this week.

Any move to retire the reach rule in isolation while leaving other laws untouched would represent a controversial move that leaves the government open to ­accusations of playing favourites with the regional TV networks overstating their financial plight.

It could put the government on a collision course with Seven West Media and News Corp.

It would create advantages for some media companies, Seven and News Corp executives argue, while further shackling incumbents competing with digital ­giants like Facebook and Google that operate without borders and the same regulatory burden local players face.

“If the government believes one law needs to go, then they all need to go. Otherwise they are failing to address the problems we all face,” one high-level spokesman said.

The widespread perception is that government is running out of time to attain industry consensus and draft a bill in the current term, however, Senator Fifield sent a strong message last month in an interview with Sky News.

He indicated that he wanted to abandon the reach rule and “two-out-of-three” reforms and would go to crossbench senators to try to get them through parliament.

View the article on The Australian.