Media legislation has fallen far behind the times and it's time for change

Angus Taylor, Federal Member for Hume | Sydney Morning Herald | 29 September 2015

Australia's media ownership rules come from a pre-internet era and in the face of massive technological changes, there needs to be a complete overhaul.

This year, for the first time, I followed the Tour de France on my phone, not on TV. As a sports nut, I thought it was brilliant: free-to-air television couldn't compete with the availability, information and commentary from the Tour de France app. For me, this said it all about the new disruptive changes bearing down on traditional free-to-air television. It also told a story about the urgent need to modernise and streamline our media legislation. It is long past time for change.

We have all watched video kill the radio star, downloads kill off CDs, Amazon knock off many bookstores and the internet's effect on newspapers. Similar forces are driving massive changes to traditional TV, which is now facing challenges from competitors such as Netflix, clever sports codes and online news streaming.

We need to change the rule book so that the new digital era can flourish and at the same time make sure we don't go too far.The Broadcasting Services Act (1992) is from a pre-internet era. It restricts broadcasters to a reach of less than 75 per cent of the population (the "reach rule"). Yet now, any broadcaster can reach the entire population through the internet. For example, Channel 7 reaches all of Australia through its streaming service, Plus7, as does the ABC with iView.

As a regional MP I despair at the impact of the reach rule. It is squeezing the life out of our regional TV networks. As the metropolitan networks sell them content at high prices, they cut local news content to the bone, and cut new investment in transmission towers. They have no choice.
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TV towers might seem unnecessary in the modern era, but free-to-air will remain important for older viewers and for high-profile national TV events. To make things worse, large parts of regional Australia lost TV reception in the recent switchover from analogue to digital. Despite the former Labor government spending more than $900 million on the switchover, not a single new tower was funded.

Broadcasters also face restrictions in merging with radio and newspapers. The "two out of three" rule prevents ownership of TV, radio and newspapers in any one licence area. Again, in a modern era the obvious answer is to combine written content with TV and radio, just as the ABC does. In practice, this rule means that a newspaper company like Fairfax can't add both radio and TV to its network.

In the past, this restriction may have been justifiable. Media markets were restricted to a single town or city, and there was little "convergence" across media channels.

But now we can view video, listen to podcasts or live streams and read news articles on a single website, and there is fierce competition crossing traditional geographic boundaries. Modern journalists, particularly in regional areas, are adept at capturing video and audio while writing articles and tweeting.

The answer, as many already know, is to get rid of this anachronistic legislation. In the process it will be possible to manage a sensible transition where local news content and TV transmission is protected.

In practice, this means repealing the reach rule, the two-out-of-three rule and streamlining a number of other restrictions. One of the trickier restrictions is anti-siphoning, preventing pay TV from putting our most loved sporting events behind their paywalls. Yet, in time sporting codes are likely to take control of their own product by streaming online, as the Tour de France has already done (albeit with the co-operation of local networks). Online they are essentially free from regulation. Anti-siphoning rules will become increasingly redundant as content moves online.

Uber (and its customers) is single-handedly deregulating a taxi industry, which excelled in tying itself up in red tape. Similarly, AirBnB is shaking up the accommodation industry. While complete deregulation probably won't be the right result, we need a very significant reset that reflects the way we now receive information and the way we will receive it in the future.

Media deregulation has been waiting in the wings for far too long. If we don't act quickly to ensure a smooth transition, large parts of our media sector are at risk in the same way the traditional music industry, bookstores and taxis are at risk. Local news content, TV transmission and access to major sporting events are also at risk.

Angus Taylor is the federal member for Hume. He was previously a partner at management consultants McKinsey & Co and Port Jackson partners.

View the article on The Sydney Morning Herald.