Address to the Country Press Association Annual Conference

Sydney 27 October 2006

The passage of the Government’s media reform package through Parliament is the culmination of ten years work by the Howard Government.

Admittedly, a lot of the shake-out since the passage of the legislation has centred around the fundamental question of - why?

Why are these reforms so important? And, if we are to have media reform, why now?

Despite commentary to the contrary, the main driver for the media reform package has been consumers and the exponential growth in new media.

Early on in the process I recognised that there were natural links between the need to move Australia to the digital age and the need to allow the media industry some opportunities to attract new investment.

At the heart of these synergies is convergence which represents both challenges and opportunities for the media industry.

Convergence is enabling consumers to get the same content over different platforms, they can now create their own amateur content and distribute it to the world via the Internet and it allows advertisers to reach their audiences in a myriad of ways. The era of blogs is upon us.

Newspapers are grappling with how they can maximise their online presence in both classified advertising and editorial content; television is challenged by the rise of online communities such as YouTube and radio is preparing for its own move to digital.

All platforms are facing the increasing challenge of how to retain their current audiences and attract new ones in an age where there is a myriad of possibilities at everyone’s fingertips.

It is this evolution of technology that has driven the case for a partial relaxation of Australia’s media laws.

Australia ’s media laws are now almost 20 years old. They operate on the increasingly outdated premise of containing the traditional platforms of print, commercial free-to-air TV and commercial radio, within a defined geographical licence area.

But new media is making a nonsense of these rules for old media.

Yes, the new rules will allow current media players some movement so they can adapt and compete in the 21 st century media marketplace. That is just common sense.

But it defies logic to confine traditional media in Australia by restricting where and how they can operate to a defined licence area when new media –such as the Internet – can operate largely unregulated and unfettered.

Even though new media is redefining the media landscape for young and technically savvy consumers,/ traditional media is still extremely important and will be so for the foreseeable future.

That is why what we are proposing is a relaxation not the wholesale removal of media laws in Australia. And any movements that this relaxation may enable are restricted in both type and number by significant safeguards to protect diversity.

The effect of these diversity safeguards is that in around 81 per cent of regional markets there can be very little or no merger activity unless new players first enter the market.

In addition, existing rules to ensure a person may control only one commercial television licence or two commercial radio licences in any licence area, and that a person may not control commercial television licences reaching an audience of more than 75 per cent of the Australian population, will remain.

And, of course, mergers will be subject to approval from the Australian Competition and Consumer Commission, that must be satisfied on a market by market basis that any mergers do not substantially lessen competition.

This means that all of a company’s assets would be relevant to the ACCC’s consideration of potential mergers.

The ACCC has published further guidance on its proposed approach to media mergers and has indicated that it will look particularly at control of content, the market for opinion and other market indicators such as advertising.

It has also acknowledged that it will pay particular attention to mergers in regional areas as they are smaller and more vulnerable.

We are also balancing the potential for movement by media players with the emergence of new services and potential new entrants.

The Government will allocate two new licences to operate innovative new digital services as part of the media reform package.

We have also lifted the genre restrictions on the two national broadcasters – SBS and the ABC – so they can show a broader range of content on their digital multi-channels.

From next year, commercial broadcasters will be able to set up a digital only, high definition multi-channel and from the end of 2008 can supplement that with a standard definition multi-channel.

So, all of this means that over the next few years Australians could be enjoying up to eight new digital channels in-home, up to 30 channels of new content delivered to a mobile device such as a phone and there could be upwards of 10 new digital only multi-channels from the free-to-air broadcasters.

This will put us in line with the rest of the developed world as we head towards digital switchover in 2010-2012.

I have always said the media package was about transition, creating the opportunities for new services now with the chance to re-examine the current industry settings and new licences at digital switchover.

For example, by digital switchover the Government will review the ongoing rationale for the anti-siphoning sports scheme, unlimited multi-channelling by the free-to-air broadcasters will be allowed to commence and the Government will consider the issue of the allocation of new free-to-air commercial television licences as well as how to manage the old analogue spectrum.

Switchover brings with it the freeing up significant amounts of spectrum and the ability to reassess assumptions underpinning broadcasting regulation which, in an analogue world, is all about access to a scarce resource.

To many, the diversity they speak of when referring to media reform is diversity of ownership.

I spoke earlier of the safeguards the Government has in place to ensure there remains diversity in the media market. But we are also concerned to ensure that there is diversity of content in the media marketplace.

The new services that will emerge as a result of these reforms are one way to ensure content diversity, but specific and measured requirements for local content are another. This is particularly relevant for regional Australia.

There has been a lot of focus on the Government’s proposed requirements for local content on regional radio across Australia.

In formulating these requirements I was very mindful of balancing the desire of the local community to listen to live and local content with the need to ensure any mandatory requirement was not too onerous for regional radio operators.

It is important to note that the local content obligations have not yet taken effect.

The general obligation to broadcast a certain amount of local content per day, currently set at 4.5 hours per business day between 6am and 6pm, will not take effect until 2008 and not until after the completion of a review into the requirement.

Other obligations, such as those relating to specific numbers of local news and weather bulletins, local presence requirements and the like will only come into effect following a trigger event such as a merger or transfer of control.

I have now directed the Australian Communications and Media Authority to commence the review and, after receiving the review’s recommendations by June 30 2007, I will consider whether the four and a half hours needs to be maintained or adjusted, or applied differently in different areas.

I think this is fair and it is recognition of the importance of the views of both consumers and the industry when mandating local content levels. In addition, I am mindful of concerns that have been expressed by some in the industry about the scope of the definition of a “trigger event”.

Therefore I have also directed ACMA to investigate whether the definition of a ‘trigger event’ may lead to unintended consequences for regional commercial radio licensees.

In particular, to examine whether small or family owned regional radio licensees might be unintentionally caught in certain circumstances.

Clearly the intention of the legislation is to ensure that local content and presence requirements are imposed on licensees where there is a change or transfer of control or the formation of a new media group.

But the review will provide an opportunity to examine circumstances in the context of changes within a group where there may not have been a significant change or transfer of control.

In order to resolve any uncertainty around this matter, I have asked ACMA to report to me on this by 31 March 2007.

I know everyone in this room has the health of the media industry – particularly those who operate in rural and regional Australia – at heart.

The Government too is concerned to ensure both the survival and the success of the media industry in Australia and that people in rural and regional Australia don’t lose the services they know and love.

The new media reforms offer opportunities for both small and larger players. I know that the activity by some media proprietors over the last week has caused a great deal of speculation.

I would reiterate that all these positioning moves are being made under the current laws that were enacted by the Hawke Labor Government in the 1980s.

And while the new media reforms may well have been a catalyst for some of these strategic moves, as the new laws are yet to be proclaimed it remains a matter of conjecture as to what deals may be proposed and whether in fact they will be permitted under the new rules and pass scrutiny by the regulators.

The Government is yet to set a proclamation date for the changes but we have always said that they would come into force at a time when there is also the opportunity for new services to emerge.

ACMA is working on establishing the Register of Controlled Media Groups and matters relating to the auction of Channels A and B. I am giving close attention to the progress of this work in the context of determining when next year, it is appropriate for the new laws to come into effect.

The pace of change in all of the industries involved in my portfolio is breathtaking.

In telecommunications, ICT and the media, the constant evolution of technology means content can be delivered in all manner of ways to all manner of devices anywhere you want it, anytime you want it.

This is the reality of the new consumer, the 21 st century consumer. News and entertainment are always on, always available whether it is on the TV, over the phone or on the computer.

The media industry must be allowed to adapt and to keep pace with these changes.

I appreciate that those who are most familiar with traditional media may find the new media landscape threatening or even bewildering.

I am confident, however, that new opportunities will emerge and that prospects are better if new ways are embraced rather than trying in vain to hold back the tide.

You can be assured of my commitment to see this through and to understand, in particular, the potential impacts on regional and rural media of adjusting to the new rules.

With a shared determination to keep a successful, diverse and vibrant media sector in regional Australia we can all look forward to the benefits these changes will bring. Thank you.