David Coleman (Banks, Liberal Party) Share this | Hansard source

I am really pleased to have the opportunity to speak on this important piece of legislation, building as it does upon the strong work of the coalition government in the broader deregulation area and specifically in the communications space. Since our election 18 months ago, with our two repeal days, the various measures we have put forward to the parliament have saved about $94 million in compliance costs and other associated costs and got rid of about 3,000 pages of redundant legislation. That is an incredibly important part of public policy in this area.

One of the questions you have to think about in this area is why there is so much regulation to be repealed. Understanding that is really important to understanding why the initiatives of the government in this area are so critical. The television industry would have to be one of the most highly regulated parts of the Australian economy, particularly in the free-to-air industry. What this government recognises is that many industries are changing and none more so than television and particularly free-to-air television. In that context, the last thing you want to do is burden industry with unnecessary red tape that does not do anything helpful for consumers, viewers or businesses and that really, frankly, gets in the way of running a sensible business operation.

You have to go back to the question of why there is so much regulation in free-to-air television. To do that you have to think: what is the public asset that free-to-air broadcasters enjoy access to, how is it linked to the high degree of regulation in this area, and how is that changing? The asset that free-to-air broadcasters have privileged access to is spectrum. It is a bit of an abstract term; most of us probably do not spend a lot of time thinking about what it means, but it means certain bits of the airwaves that are particularly valuable and that allow you to transmit a moving picture, in a nutshell. Historically that has been what is called the analogue spectrum; more recently we have moved to the digital spectrum, which I will come to in a moment.

What we have faced for many decades is a situation where the only way you could get a moving picture into the home was through the broadcast spectrum. There was no other way of doing it because scientists and engineers had not come up with any other way of doing it. That meant if a business had access to that spectrum, it was in an incredibly privileged position. Empires were built on that access. Understandably, governments of various persuasions said, 'If we are going to give you access to this extremely valuable public good, we are going to require you to comply with certain regulations.' That is why we see such an extensive list of regulatory requirements in the free-to-air area. Of course over time scientists and engineers have worked out other ways of getting a moving picture into the home. As that occurs, the power of broadcast spectrum will decline.

We started out with the VCR in the eighties, and in the nineties DVD players came along. We also had cable and satellite in the nineties and then, from the early 2000s onwards, first fixed-line and then mobile internet have been of sufficient quality to get a moving picture into the home—not just into the home but into a whole bunch of other places.

As a consequence of that, the free-to-air industry has changed quite radically. It does not have a monopoly on getting that access to the home, and the habits of viewers are changing considerably. It is very important to understand this background.

You have to think: where is this all headed? I suspect there will be a day when broadcast spectrum will become completely irrelevant, and that is when all homes will have access to a sufficient quality picture through other means—most likely the internet and in some places mobile or satellite. But that day is coming. It is probably within this decade—within that time frame—and then broadcast spectrum is frankly meaningless.

The situation faced by free-to-air broadcasters is they have gone from being a monopolistic provider of television services to the home to one delivery mechanism amongst a number—although free-to-air today is still the only way every home in Australia can get broadcast-quality content.

The member for Braddon was talking about problems which persist with broadcast spectrum. There are of course a number of homes, particularly in regional Australia, that cannot get broadcast-quality TV. They rely generally on a satellite service, but the vast majority—99 per cent of Australian homes—can get broadcast-quality in the home via broadcast spectrum. The percentage of homes that can get broadcast-quality 24 hours a day is rising—through the tremendous work of the Minister for Communications, ably assisted by his parliamentary secretary—and will continue to rise through the sensible NBN, which we are building, and the growth of mobile networks. But it is still not 100 per cent—it is still a way off but it will eventually be 100 per cent.

Broadcast spectrum will be irrelevant, because everyone will have access to a moving picture and, at that point, the broadcast networks will have no particular standing that is any different to anybody else in the world. Anybody at that point will be able to provide exactly the same thing into the home.

Massive changes are going on in the industry and, when industry and markets change, governments should change too. The fundamental question we, as a government, must ask ourselves, is: what is our role here; why is the government involved in this; what is it in fact that we are attempting to do; what are the problems we are attempting to solve; how involved do we have to be; do we have to hold the hand of the television industry every step of the way; or should we get out of the way and remove regulation that does not help while keeping important regulation in place that protects viewers?

The changes in the industry are well reflected by some numbers and it is interesting to look at how things have changed in the television industry—with all of this informing the appropriate response from government. If you look back to 2003-04—so 10 years ago—the broadcast networks Seven, Nine and Ten collectively made EBITDA, a measure of profit, of $740 million. Ten years later, because of all the forces that we have been discussing, that had dropped to $493 million—so that is about a one-third drop over 10 years. That might not sound so bad but, if you contrast that with what was happening in the economy more generally, it is actually a very steep decline. For instance, federal government revenue in 2003-04 was $188 billion; in 2013-14, it was $374 billion. So federal government revenue nearly doubled, and the television sector profitability in that same time was reduced by a third.

Ten years ago Foxtel did not make any money at all; last year it made twice as much as the entire free-to-air television industry combined. So Foxtel made EBITDA of $970 million. So this is a changing marketplace and, in that context, it is important that the government responds sensibly.

One of the things that the previous government did and handled with a degree of competence was the restack from analog to digital spectrum—television broadcasters now use a smaller part of the spectrum, which enabled an auction process for the previous analog spectrum and the government raised considerable funds from, principally, the mobile telecommunications industry so that was a sensible reform. The amount of spectrum for the free-to-air industry was compressed for the benefit of the broader economy.

If we look at the measures before us today, sensible one and all—captioning is something we have spoken about quite a bit this afternoon, and the government is absolutely committed to the maintenance of very high-quality standards in captioning. Captioning is in fact required on free-to-air broadcasts 100 per cent of the time on the primary channels between 6 am and midnight, so the vast bulk of viewing.

There have been some anomalies and some unnecessary complexity in the system, and it is good to see that the opposition is supporting some of the sensible adjustments to the captioning regime that are included in this bill, such as the 12-month exemption from captioning obligations for new channels; the ability to aggregate a captioning target across a number of sporting channels when they are offering related programs—for instance, a tennis event; and a number of other things to do with record keeping ACMA, the regulator, is certainly nothing if not a record keeper and if we can reduce the requirements for records to be kept and forms to be filled out it is to be entirely encouraged.

Drama is a highly regulated part of the Australian television industry, and a number of subscription TV channels are required to spend about 10 per cent of their programming budget on local drama, supporting local producers, actors and so on. That continues but there is no longer a need for an annual audit of that process. That is a sensible reform and, again, a very sensible red-tape reduction measure. In my electorate of Banks there are numerous pay TV channel providers that are very important in our community, and I certainly commend TVB, which provides terrific Chinese language services right across Australia, and World Media, who provide Arabic and other language services right across the nation. It is important that we do not overly burden these subscription TV operators with unnecessary form filling, and it is good to see that we have made that change.

Licence area population is a very complex area in which many lawyers have made a lot of money over the years, but we are making things a little simpler. If ACMA chooses to change the definition of a licence area, rather than having the potential impact of a broadcaster being required to sell a station and/or to provide substantially more local content, that will not be required. That is a good thing because if ACMA changes the definition of a licence area, nothing has changed in terms of what the broadcaster is actually doing; they are still broadcasting the same shows to the same people and therefore the requirements should not change, because they are not in themselves changing anything at all.

As we talked about before, digital switch-over has been an ongoing process for a number of years—right back to around 2005-06. It is completely finished now and the management of the end of that process was done very effectively by this government. There were lots of transitional provisions during those six or seven years and the import of much of that was: what you do in analog you must do in digital, and vice versa. Those provisions are no longer required, of course, because analog is no more, so those requirements should be deleted from the statute books.

It is good to see in this legislation that ACMA is no longer required to formally conduct reviews on the classification system. We have seen ads on TV about the television code and seeking input on the television code. There is lots of community consultation about these matters. ACMA needs to sign off on any final classification scheme and it is certainly within ACMA's rights to refuse to sign off on something if they think it is inappropriate, but they should not have to conduct formal reviews simply for the sake of doing so.

There are very strong deregulatory measures here. They take account of the changing nature of the broadcast industry and I commend these changes to the House.

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