Scott should not be the only choice

Senator Dean Smith | The Australian Financial Review | 12 October 2015

The paradox facing policy makers on media reform is elegantly captured by Giuseppe Tomasi di Lampedusa's observation in his novel The Leopard that "If we want things to stay as they are, things will have to change".

Ironically, no one has done more to progress the case of regional media reform – and specifically abandoning the "reach rule" – than the current managing director of the ABC, Mark Scott. During a meeting with Coalition MPs late in 2014 he boasted that "in the near future the only regional broadcaster choice will be ABC".

Monopolies are never healthy, and especially not when it comes to our media. This is doubly so when the prospective monopolist is state-owned. Proposals for media reform are always fraught with tension, because there are strong commercial interests at stake.

For the government, the motivation for reform should be much simpler: how do we promote best the best interests of consumers? In the case of regional media reform precedence must be given to the present and future experiences of regional consumers.

At the risk of stating the obvious, Australia's media landscape is much changed of late. Indeed, the explosion of mobile viewing platforms and streaming services has altered our media markets radically from the one that existed even five years ago. It's little wonder that regulators are struggling to keep up.

MEDIA MARKET IS BORDERLESS

Consumers care little about distinctions between "traditional" and "new" media. They are voting with their smart TVs, laptops, smartphones and watching what they like, when they like. In that context, the nation's regulatory framework must allow broadcasters to compete effectively in a media marketplace where the traditional geographic approach to broadcasting is being rendered obsolete by technological advances. For all intents and purposes, today's media market is borderless.

In an environment where the possibility of reform is easily thwarted, we should not allow the perfect to be the enemy of the good. For this reason, a prudent starting point would be to abandon the 75 per cent audience "reach rule".

This rule prevents a person or commercial interest from controlling commercial television licences whose total licence area's population exceeds 75 per cent of the population of Australia. Removing the rule would permit consolidation within the commercial television sector and greater scale in operations, while other rules – including obligations in relation to the provision of local content in some regional licences' areas – could remain in place.

In practice, the rule prevents any of the large metropolitan commercial networks (Seven, Nine and Ten) from taking over any of the regional commercial networks (Prime, WIN and Southern Cross) without divesting some existing licences.

ROOM FOR OPTIMISM

Support for abolition of the reach rule was provided by the 2012 Convergence Review, undertaken by the Gillard Labor government, which noted that technological change had "diminished the effectiveness" of the regulation. Of course, change is dependent not just on the attitude of the government, but also the opposition and the Senate crossbench. Here, there is room for optimism.

Victorian crossbench Senator Ricky Muir has already voiced his support in the Senate to "remove outdated media ownership legislation". Likewise, Western Australia Senator Dio Wang has proposed previously legislative amendments that would abolish the reach rule.

Arguments for a "root and branch" or a "holistic" approach to media reform are, at best, disingenuous. In reality, arguing for the status quo or delaying reform provides a significant commercial advantage for some, or at least one, in Australia's media industry.

Sometimes, it's better to examine behaviour than words. The fact that one commercial broadcaster has launched an app that will allow Australians anywhere to stream its channels, while it is simultaneously arguing for retention of the reach rule in broadcasting, underscores the hollowness of the anti-reform case.

CONCERNS UNDERSTANDABLE

Concerns about the future of local content by some regional MPs are understandable. But there is little practical relationship between ownership and the provision of local content – and there is always the proposition of "grandfathering" local content requirements as part of future ownership changes.

There is a broad consensus that good policy demands the protection of media diversity, especially for regional communities. But the cause of diversity is not well served by doing nothing on media ownership laws, or by elevating Mark Scott to the status of prophet.

View the article on the Australian Financial Review.