PRESS CONFERENCE

July 13, 2006

Senator Helen Coonan

Minister for Communications, Information Technology and the Arts

HELEN COONAN: Thank you very much for coming. Today I'm announcing details of the government's framework for media reform. The objectives of media reform are to progressively deregulate the sector to take advantage of new digital technology and new services and to provide, of course, more choice for consumers. What I have to announce is, I think, a comprehensive package designed with the interest of consumers in mind. There are nine key elements to this package and a number of subsets which I will go through briefly. And in the material that's being handed out, there's obviously a lot more detail and I'm sure that some are more interested in certain bits than others.

As part of the framework announced today, the government will, first of all, develop a digital action plan to drive the take up of digital television services and to help consumers make the transition from analogue services to the new digital environment. That is absolutely necessary because the current switch off date at the end of next year, sorry, at the end of '08 won't see enough take up of digital and we need to reset the date for a target of 210 to 212 (sic).

The second thing we'll do is to open up two reserve digital channels for new digital services such as mobile television or new in-home services. That will mean that up to 30 new channels could be available on some users, under some users, and that spectrum will use up the other, the only spectrum that's reserved until we can get to switch off and have available more digital spectrum.

So that means that the government has made a decision to go with two new digital licences and to use that spectrum instead of allocating just a look-alike for commercial free to air station.

The next set of reforms relates to multichannelling. The government will permit commercial free to air channels to broadcast one standard definition multichannel from 2009 and to allow full multichannelling no later than the time of digital switchover. In addition, we will permit a high definition multichannel by removing the simulcast requirement on high definition television programming. Thirdly, we'll remove the genre restrictions on the types of programming which can be shown on ABC and SPS multichannels subject to not showing sport on the anti-siphoning channel unless it's first been shown on a free to air channel. This means that potentially consumers are looking at up to eight multichannels, free to air.

 The anti-siphoning regime will be substantially reformed to commence on 1 January next year. It will comprise or it will introduce a use-it-or-lose-it system for sporting events on the list. There'll be further consultation on what will constitute 'using and losing' and ACMA, the regulator is currently monitoring the anti-siphoning list for the introduction of these reforms. And subsequently the anti-siphoning list will be reviewed when it comes up for review in 2010 which is likely to coincide with the commencement of switchover in any event. But obviously there will always be a core anti-siphoning regime at least for the foreseeable future because we understand that Australians very much enjoy watching events of national significance on free to air television.

There will be a relaxation – and I stress relaxation, not removal – of the current restrictions on cross-media ownership subject to safeguards that will ensure no fewer than five independent voices remain in metropolitan markets and four in regional markets. And that will commence upon proclamation on a date to be determined in 2007. And the relaxation of Cross Media will be subject to a number of protections.

Firstly, there will be legislation to retain license conditions ensuring local content on regional television in Queensland, New South Wales and Victoria and will be extended to Tasmania. Next year, there will be a review of the arrangements in South Australia and Western Australia. There will be specific protections for local radio content in regional markets by requiring commercial radio licensees seeking mergers in regional markets to meet minimum standards for local content including news, community service, announcements and emergency warnings.

The protections and safeguards will also include the ACCC who is currently specifically empowered to take into account regional areas, regional markets. The ACCC will ensure that competition laws are fully complied with under the general mergers provision in the Trade Practices Act. That will mean that any merger will be subject to not substantially lessening competition in the market according to the tests that are currently applied and that may be developed by ACMA and by the ACCC.

 ACMA will oversee the safeguards to ensure diversity in local content including ensuring that transactions comply with the minimum number of media groups. So they will administer the five/four numbers.

The foreign ownership restrictions will also be removed but we will retain the media industry as a sensitive sector under the rules, under the Foreign Investment Policy. That will happen upon proclamation on a date to be determined in 2007 at the same time as the Cross Media rules are relaxed. That means, when something is a sensitive sector that all media transactions, all direct media transactions are subject to scrutiny and indirect investments over 5% are subject to scrutiny. We've found that that is effective and appropriate to ensure that the national interest is maintained.

 The regulator will be given a significant suite of additional powers to regulate broadcasting including the power to seek civil penalties and injunctions and to accept enforceable undertakings from broadcasters. These complement the review that I announced last week on Television Codes of Practice that relate to reality television programming and also complement new legislation that I announced in June extending to converge devices, mobile phones and premium internet services, some content regulation.

We think that taken as a whole, the set of arrangements provide a degree of flexibility to enable not only media players but consumers to have all the advantages of new technology and new investment in these services. I firmly believe that it's consumers who will be the most significant winners out of this package with access to a range of new services, particularly several new digital channels and, of course, even more to come in the transition to digital television.

Finally, I just want to say something about timing. It is very interesting the speculation about timing, but nothing has slipped. Everything is still on time. Nothing has been put back. There has now been a government decision to adopt the package and the core decisions have now been made. There is, however, a degree of implementation to be worked out in relation to the design of spectrum and the issue of new digital licenses and, of course, in relation to development of the Digital Action Plan. However, in both of those areas, we expect to be able to announce the outcome of how they will be implemented, not whether they will be implemented, but how they will be implemented later this year. It's a timeframe that should see all of the necessary legislation developed this year and the package implemented in 2007. Thank you.

QUESTION: Won't this simply concentrate media ownership from now on?

HELEN COONAN: I don't think so because of the safeguards. In fact, I really find it very difficult to see how anyone could think that it will simply concentrate the media from now on.

What it will do is enable some new investment. It will enable some scale and scope. But, for instance, the regional protections which is an interesting example mean that for 63% of regional markets, no mergers would be possible at all under this floor of four. One merger would be possible in 18% of regional markets. So that means that in 81% of regional markets, you have none or one unless there is a new entrant and I do think that there is some possibility of new entrants. Nineteen regional markets have six or seven players, but only 20% of regional markets can potentially have more than one merger.

 So, before everybody gets too exercised about any potential concentration, I think we need to realise that these safeguards have been designed very carefully to ensure that there are possibilities in larger markets but a number of safeguards and certainly a number of hoops that potential investors would need to jump through before they could or would undertake a merger. And I think it is also relevant to say that when this was previously looked at and there was a discussion about whether there would be two out of three, that actually only dealt with the types of mergers not the number. The floor of four and the floor of five is actually a more stringent test.

QUESTION: What about 20% in cities like, say, Newcastle and Wollongong, which are the bigger regional markets but may not necessarily be big enough to attract new investors into those markets. Are those major regional centres, the ones that could potentially suffer the most out of these?

HELEN COONAN: Well, why would they suffer if it means that consumers are actually able to get new services because unless …

QUESTION: [Inaudible]

HELEN COONAN: Just let me finish my answer please. The markets that have the requisite number are certainly the ones that could be potentially subject to some of the movement under this floor test. However, whether that happens will depend whether or not there's a substantial diminution of competition in that market. It's important to understand that the ACCC applies the rules not relating to companies but relating to the market, and the operation of that particular market. So the fact that that might occur in those kind of very large regional markets I think is more likely to attract investment rather than discourage it.

QUESTION: Do you have a view on what using a program means as far as the anti-siphoning law, will you leave that purely to ACMA--

HELEN COONAN: No.

QUESTION: -- to develop the definition.

HELEN COONAN: No, they'll be consultation in the last quarter of this year based on ACMA's monitoring of the operation at the anti-siphoning list. And there will be consultation between government, ACMA and the relevant industry players as to what would constitute use or sufficient use and what would be the conditions under which it could be lost.

QUESTION: But there's actually, there's black and white views on the Pay TV and the free-to-air, how are you going to resolve this?

HELEN COONAN: Well that's what government's job is, on advice from the monitoring that's currently underway. But there's over a thousand events on the anti-siphoning list. Quite clearly some of them are not used. And I think it's appropriate that we have objective monitoring and that it's transparent so that all of those with an interest in the operation of the anti-siphoning scheme get an opportunity to have a say about how the monitoring goes.

QUESTION: Minister, you've achieved something your predecessor couldn't achieve. You've actually got cabinet blessing on cross and foreign. You still have to get the support of the Senate and particularly the Nationals. Notwithstanding the regional framework that you've announced, that you've unveiled, are you confident that you could win the support of the Nationals, particularly in the Senate. And Barnaby Joyce last night was questioning some of the reforms as he understood it.

HELEN COONAN: Well, I've had a very long conversation today with both Senators Joyce and Mr Neville who called me from overseas and we've walked through the package. I think they're broadly supportive of the package, but it's a very complex package and it's important that for the purposes of people voting, they understand what they're voting for.

QUESTION: So you're confident the Senate will back this?

HELEN COONAN: Well, what I think is that Cabinet's backed it. There were three National party ministers in the Cabinet who supported it. And certainly from the way in which the package has been designed and they've been extensive and exhaustive consultations with most of my colleagues, that we've dealt with most of their concerns.

QUESTION: Usually we would say by not opening up a fourth commercial television channel that it is anti-competitive, advantaging the free-to-air channels against a television. What do say to that?

HELEN COONAN: Well, it's a very puzzling argument when you think about, isn't it, because we're going to provide that space for directly competitive services. Under the current arrangements, free-to-airs cannot bid for additional licenses whereas News could. So I don't really quite follow the concern about no fourth channel.

QUESTION: So News or Fairfax could bid for one of those two new channels.

HELEN COONAN: Well, potentially yes.

QUESTION: They will be restricted to -- I thought you said that they'd be restricted to mobile telephony …

HELEN COONAN: Well, they have restrictions.

QUESTION: We're not talking about other free-to-air.

HELEN COONAN: No, they're not a look a like fourth free-to-air channel as what you get sitting in your lounge room. But with the advantage of technology of course, there are many opportunities now to redesign what was the old datacasting and was not something that was very attractive into some very attractive ways to deliver new services and information and entertainment to consumers.

QUESTION: Are those restrictions on the datacasting defined here and is the difficulty of defining restrictions one of the reasons why that needs further consideration this year?

HELEN COONAN: No. What was required, David, was a decision in principle to allocate them. Then of course you can go to the substance of the design of the spectrum, the conditions that you attach to the issue of the licences, how they will be allocated, whether they'll be auctioned, whether there'd be a beauty parade. Precisely the best way to deliver these services. What is a business case? There's lots of issues that we can now look at confident that there's a decision in principle to allocate.

QUESTION: But if you open the definition too widely and make it too broad, you could have a fight on your hands with some of the free-to-air networks.

HELEN COONAN: Look, I'm quite used to having fights on my hands I must say. But I'll be having a look at all of the context as to how these additional digital licenses will be designed and I make no apologies about this. I'm in it for the consumers, and I want to get new services for consumers and I think that that is entirely what a package of this magnitude should be delivering.

QUESTION: So that could include subscription services?

HELEN COONAN: Sorry.

QUESTION: They could still include subscription type services, those two…

HELEN COONAN: Well, they're not excluded but I think more free-to-air services in that space is something that could be desirable. But what we need to do is to have a look at the conditions on which these licenses would be allocated.

QUESTION: How did the action plan work, how do you make sure that Mary Bloggs who is 73 and doesn't even have a mobile phone can watch television …?

HELEN COONAN: Well, I mean the first answer to that is, you've got to get a time frame in place. You've got to look at the logistics of what needs to be done. What are the tasks that we need to identify that have to be done to get to switch off. They're complex and difficult and what I think we do need is to get a road map to get there.

For instance, what you need to do with manufacturers, with retailers, with consumers, with people who ultimately are frightened of technology and don't really know how they'll do it. We have to look at what we give consumers by retailers. We have to get the cooperation of industry and I think we then have to look at some milestones along the track to 2010, and we'll have a look at where take up has got to. I'm very confident that with new and innovative services and proper consumer information plus the fact that the price of set top boxes is coming down significantly and dual tuners in televisions is now becoming more available. It's all moving on and I think as we stand here in 2006, we've got to escalate the attention to getting people to understand what they're going to be asked to do in 2010.

And ultimately one might have to look at people who are disadvantaged, that's happened in the UK, that's happened in Germany, to make sure that no one's left out of here. It's a very long and difficult task. So what we'll do is come back with the design of the plan this year and that will have the time frame and how these sorts of logistics are going to be identified.

QUESTION: So 2010 is not set in stone as far as you're concerned, there'll be no slippage.

HELEN COONAN: Well, it's a target, Steve. It's a target. I mean what you've got to do is to have some way to get there when you've got something this far out. The difficulty has been that a date was set and none of these kind of issues appeared to have been addressed adequately to my way of thinking. And I think it's not just for government. This is something that really needs the community being on board. You need all of the stakeholders to participate in getting to something like the change over of a major technology.

QUESTION: But it's not an undertaking.

HELEN COONAN: What it is, it's a target.

QUESTION: Are you saying…?

QUESTION: You've indicated that you've had a discussion with Mr Neville and Senator Joyce and three of your National party cabinet colleagues signed off on this package. Does that mean in your mind, this is it, this is the bottom line that when the legislation is presented to parliament, there'll be no more horse trading. This is it, this is the final package or is there room to move to address concerns they may have over the coming weeks.

HELEN COONAN: It would depend on what the concerns were, I would think. But this package has been very comprehensively workshopped and discussed with colleagues over some considerable period of time. So I would think that apart from minor matters, it's the decision that will guide the framework now for the implementation of these quite complex matters.

QUESTION: Doesn't the slippage on digital television mean that digital radio will be compromised because the analogue TV spectrum won't be freed up for more services on digital radio and so therefore it won't be attractive to an audience?

HELEN COONAN: Well the radio package is on a slightly different track partly due to industry and partly because the framework has just been announced. It has its own set of conditions and it's operating under the current technology with the development of a multiplex. Under the current multiplex and with the current standards, there is enough spectrum for radio to be competitive and they'd want to get on to digital and that's what we are doing.

QUESTION: The consumer interests would be enhanced by PBL taking over John Fairfax and/or News Limited taking control of one of the free-to-air networks.

HELEN COONAN: Look, I think, I'm not going to really be drawn on specific possibilities and probabilities here. I mean, I really do think rather than us speculating about that what we have to do is to say that there's a framework that will give options. There are some very stringent safeguards and conditions attached to it, and then it's going to be a matter of what parties see as something they wish to do and whether they pass all the tests.

QUESTION: Do you think the package is balanced enough? It's got all these balancing factors in it. Is it sufficiently balanced to offset or to minimise some of those concerns aired by the media moguls like Murdoch and Stokes. Do you think you can settle their concerns with this package?

HELEN COONAN: Well, look this is not designed for any particular media mogul, let me make that perfectly clear and I think you can see from the detail that it is not. It does not address the kind of issues that might have entirely suited the agenda of certain media proprietors. It's a balance and I must say that I think it's very important that we understand that if they are actually going to deliver these services, you try and understand what they need to do and where they want to take their business. That makes a lot of sense because they deliver things that consumers actually like. That's why it's important that rather than pull the rug out and cancel all televisions licences and try and do impossible things, now what we need to do is to ensure that you've got a transition to a deregulated environment that doesn't take away from consumers what they expect and enjoy now.

QUESTION: Minister, just back on the anti-siphoning list. Do you believe consumers would like to see more live sport on TV and can that be achieved?

HELEN COONAN: Well, look, I think that the way in which this list is paired, if you like, is something that we've got to have a look at in terms of the monitoring. I think a lot of consumers get very frustrated when free-to-airs don't show certain things that they're expecting. Somebody complained to me the other day that somebody cancels, one of the television stations, I don't know which, had cancelled the golf two days running because they said there wasn't interest or whatever it was. Now, I don't know whether or not that's correct and that's why we've got some rigorous monitoring into it so that what is reasonable in terms of commercial programming can be shown and what's not should be able to available to be shown elsewhere.

QUESTION: So there is an argument to cut the anti-siphoning list depending on the ACMA findings later this year?

HELEN COONAN: Well, I'd have to see what it is. But what I've said is that we will introduce a use-it-or-lose-it scheme that will build on what the monitoring tells us following consultation, of course.

QUESTION: With regard to the numbers you gave us on the limited potential for mergers in regional Australia, what do the same figures show us, what do your figures show us for the potential for mergers under the new regulations in urban Australia and why you clearly don't agree with the criticism that we're in for a flood of mergers and takeovers? What increased level of activity in that sense do you expect? You expect some, I presume.

HELEN COONAN: Well, I don't know. I mean, it's a matter for proprietors and people who are running media businesses as to what they see is a business case. What these rules are designed to do is to provide a bit of flexibility to enable media companies where they are sufficiently large to be able to make some investment with some confidence that they can build on what the rules allow. So it's really to try to put a framework around it, not to speculate about who might do what.

QUESTION: But you speculated with those numbers in regional Australia on pretty tight possibilities on potential mergers. What are they like in urban Australia? What do you see?

HELEN COONAN: Well, they're a different range of percentages which I can give you later if you like. I'm not going to read them all out because there's a lot of markets all around Australia. But the point I was making in regional Australia is that because there's been a great deal of comment about regional Australia, that it's not, to my way of thinking, an issue where there could be many because we know that 63% of them just fall under the floor. Now, you know, if you like I can give you charts of what numbers there are in every market but I'm certainly not going to speculate on what might happen.

QUESTION: Will the digital action plan include subsidies for the disadvantaged people you were talking about earlier?

HELEN COONAN: It may do but we have to wait and see what the digital action plan looks like when it's developed and the issue really is probably not so much as whether but when. I mean, I don't think it's appropriate to be looking at subsidies before some of these reforms work and you see what people will do in any event. You have to always have regard to the fact that it's taxpayers' money you're looking at here. But there is a case, no doubt, at some point of penetration of digital where you would look at people who need help.

QUESTION: Would it also encumber something like some sort of standard on the set top box so that people couldn't exclude other players when they provide a set top box under various arrangements?

HELEN COONAN: Well, it may do. I mean, these are, I think, legitimate issues that need to be tackled in the digital action plan but the clear objective will be to get everybody to be able to receive a digital signal by 2010. And part of having a digital action plan and possibly even a purpose built industry group to look at how you get there, such as the SwitchCo in the United Kingdom, is to identify where the barriers really are.

QUESTION: So what do you think is the most likely date to switch off today's analogue signals?

HELEN COONAN: Well, I think it'll be a staged process but once again that's something that needs to be worked out as part of the digital action plan. And it has been proven to work reasonably well if you do it region by region in other jurisdictions. So we'll be having, in fact have had a good look at that. So I would expect without wanting to be regarded as having made some definitive statement about it, I would expect that it would happen region by region commencing in 2010.

QUESTION: Minister, just on the leadership issue, would you endorse Mr Howard taking the Liberal Party to the next election as leader and do you think it's in the interest of the Liberal Party government that he declare his position sooner rather than later?

HELEN COONAN; Well, look, what I want to say about this is that I think the Prime Minister has very clearly demonstrated his ability to make decisions in the interests of the Australian people and in the interests of the Liberal Party time and time again and I think we can continue to rely on his judgement.

QUESTION: Minister, with these changes today, through your eyes, do you see the media landscape expanding or with the passage of time, fewer media players?

HELEN COONAN: Well, I certainly think that with new digital services it will expand because there are new players and I expect as a result of this package that there is likely to be some new players. I don't know, I might not be correct about that but from the interest that has been expressed, I would expect that there will be some new players and I think that's a very thing for diversity. If, say, a new third grouping, major media grouping emerges out of these reforms.

 But let me say this, that the way in which technology is moving, I don't think it will be very long before we will be able to get, for instance, the same content over a mobile phone, over broadband and over television in broadcast. So, some of the kind of rules around allocating licenses in areas becomes quite problematic and I think this is an area that is very fluid and it changes very quickly. It's one of the reasons why we can't just stand with our feet planted in concrete here and do nothing. We do need to move on in all of these areas and recognise that if we don't do it, technology will simply overtake us.

QUESTION: Do you think channels should be national network?

HELEN COONAN: Yes.

QUESTION: There are reports that some of the mobile phone companies might try and wrap up exclusive deals on content using the [DVDH] standard. Do you think that that mobile phone datacasting should be open to all phones or is it free to companies to carve it up and say, only show TV channels to their own mobile phone subscribers?

HELEN COONAN: Well, look, I think that's what we need to have a look at as to how we'll design it and what kind of conditions are attached to it. I think that you've raised a legitimate point. I think on content, more broadly, the regulator, at least Mr Samuel has said, I think in a number of speeches that he is particularly interested in the tying up of content as part of what ought to be considered when you look at markets and when you look at some of these mergers. So, I do think that it's important that we have regard to these kinds of new ways of getting access to these kind of platforms in how you design it.

QUESTION: What do you see as the role of the ABC? I mean, I gather in what you're saying is they will supply some of this digital TV technology, new content and so on. Is that how you see it?

HELEN COONAN: I think that the ABC, just as the BBC, has a potential role to do some very new and innovative things and, in fact, I think they've done a very good job so far with ABC2 and certainly with their online service. I think that the ABC is to be commended for that and I think SBS has also done some very good things. They've been hamstrung to a large extent by the genre restrictions. I think that that's important, that those restrictions get removed.

QUESTION: The ABC will now be able to broadcast after the genre restrictions being removed a new 24 hour news and current affairs channel? Or SBS a 24 hour sport channel?

HELEN COONAN: As long as they are not infringing the anti-siphoning scheme, they will have a lot of programming flexibility as to how they might want to use their second channel.

QUESTION: Have you had any discussions, Minister, with any of the international media groups who are showing any interest in, perhaps coming to Australia?

HELEN COONAN: Not for some time, although I certainly have had contact from what you would call as international stakeholders.

QUESTION: Recently?

HELEN COONAN: Not recently, but I've certainly had in earlier months some contact.

QUESTION: Try to attract a number of these to Australia…?

HELEN COONAN: I mean, Australia is an investment opportunity for a lot of industries. My role and the Treasurer's role in this is to ensure that we look after the national interest and that foreign investment accords with the investment in any other sector. That means that it remains subject to scrutiny by the Treasurer because it's regarded as a sensitive sector, but the commercial opportunities are not something I want to speculate about. Thank you very much. Thank you.