ASTRA claims benefits of media regulatory reforms may be jeopardised

07 November, 2011 by IF

Press release from Tsuki

Opportunity for a converged world may be jeopardised by Government support and protection provided to free-to-air commercial television broadcasters


Deloitte Access Economics estimates:

• Nearly $800 million in net government support provided to commercial FTA television broadcasters in 2010-11

• Subscription TV contribution to GDP of over $700 million per year

The potential benefits of reform to media and communications regulatory settings in a convergence environment may be jeopardised if barriers to competition are not removed argues the Australian Subscription Television and Radio Association (ASTRA) in its submission to the Government Convergence Review.

Commercial FTA broadcasters receive substantial support from government to provide their services. In independent economic analysis released by ASTRA today, Deloitte Access Economics (DAE) estimates that $792 million dollars in net government support was provided to the commercial FTA television sector in 2010-11.

Overall, DAE estimates that just over $2.7 billion in net government support will be provided to the commercial FTA broadcasters over the period 2011-12 to 2014-15, together with funding for national and community broadcasting of $5.1 billion over the same period. This means a total of $7.8 billion will be provided by government to support FTA broadcasting over the next four years.

This significant tax payer support to the FTA sector must not be forgotten in any theoretical assessment of regulatory settings in Australia.

In comparison, the total gross output of the STV sector according to DAE estimates was $3.3 billion in 2009-10 with a contribution to GDP of $700 million per year. This includes $578.4 million invested by STV platforms and channels in 2010 into Australian content. The additional contribution of enhanced variety of programming choice and product innovation by STV also has important economic implications.

ASTRA CEO, Petra Buchanan said: “Convergence will drive an increasingly competitive media and communications environment that encourages the development of a more diverse range of new content and innovative services for consumers.”

“However, developing regulatory options for a converged environment requires more than merely an examination of how content is regulated on competing platforms. It is essential that existing regulatory barriers to competition are removed to provide a balanced and consistent regulatory framework.”

Commercial FTA broadcasters occupy a ‘special’ place in the Australian media landscape, enjoying a continuing significant degree of influence through universal penetration into

Australian homes, and a regulatory framework that provides guaranteed access to public spectrum, exclusive access to a wide range of important sports content, and protection from competition from new commercial FTA networks.

As the Convergence Review Committee has noted, requirements for the provision of Australian content by commercial FTA broadcasters have traditionally been connected to the regulatory benefits provided to these broadcasters. This quid pro quo continues to give commercial FTA broadcasters a competitive advantage against other sectors in the media and communications industry.

“As the Government reviews policy settings for a converged media sector, it is important that specific regulatory and other privileges afforded the FTA commercial broadcasters should continue to come with specific Australian content, social and cultural obligations beyond what might apply to other service providers,” noted Buchanan.

“Australians should have access to Australian content that reflects and contributes to the development of national and cultural identity. The important long-term objective should be that Australian content continues to be made, and be made attractive to both local and international audiences.”

ASTRA submits that the costs that may be incurred by commercial FTA broadcasters to comply with existing regulatory obligations must be balanced against the benefits received from other regulatory privilege and, as such, there should not be any permanent reduction in licence fees without also addressing these imbalances.

ASTRA has recommended a number of policy reforms to the Convergence Review Committee that would increase competition and content diversity in the media and communications environment, including:

• a re-examination of the scope of the anti-siphoning scheme;

• removing the regulatory barriers that prevent additional commercial FTA television broadcasting services;

• the separation of broadcasting (content) licences from apparatus (carriage) licences to enable more efficient use of existing broadcasting spectrum, including for other services;

• more closely aligning broadcast spectrum planning and allocation to spectrum planning generally, including market-based pricing;

• permitting the ‘sixth’ digital television channel to be used for new services; and

• a new approach to ensuring Australian content remains on our screens in the digital age underpinned by contestable funding.