Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry, Infrastructure and Industrial Relations) Share this | Link to this | Hansard source

I rise to speak in this cognate debate on the Datacasting Transmitter Licence Fees Bill 2006 and the Broadcasting Services Amendment (Collection of Datacasting Transmitter Licence Fees) Bill 2006. This legislation follows the government’s decision announced earlier this year to auction currently unallocated broadcasting spectrum to provide new digital television services. This is the spectrum that was set aside in 2000 as part of the government’s disastrous datacasting experiment. As members will recall, the then minister, Senator Alston, attempted to create a new category of television service. In that event, the limitations on the types of programs that could be shown by datacasting licences were so restrictive that the auction failed. The failure of the government to use scarce broadcasting spectrum to allow the creation of attractive new services is one of the main reasons why its digital TV policy has been a spectacular failure.

This time around, the government has announced that the spare spectrum will be divided into two parts, known as channel A and channel B. Channel A will be reserved for in-home digital TV services and, depending on the technology used, it could provide up to eight television services. However, the holder of this licence will not be able to offer commercial broadcasting services. Channel A services will be limited to narrowcasting, datacasting or community television. This is an important feature of the regime and it is a point that I will return to later. Channel B will be subject to a less restrictive regime. There is a widespread view in the industry that channel B is most likely to be allocated to a licensee who will use the spectrum to provide mobile television services.

It is the intention of the government to auction the spectrum for channel A and channel B early next year. The bills before the House today are part of a number of steps that must be taken to allow the spectrum to be sold. These include planning the spectrum, designing the auction process and further clarifying the nature of the regulatory regime that will apply. The legislation before the House today relates only to proposed channel A. These bills facilitate the collection of licence fees from the holder of the new channel A datacasting licence. The Datacasting Transmitter Licence Fees Bill 2006 imposes an annual licence fee on the holder of a channel A licence based on the percentage of revenue received by the licensee. The bill provides that licence fees are to be levied on a sliding scale similar to that which applies to commercial free-to-air broadcasters. Fees range from half a per cent to nine per cent of the licensee’s revenue. The maximum rate of nine per cent will not apply until the licensee’s revenue exceeds $75 million.

The second bill in this package, the Broadcasting Services Amendment (Collection of Datacasting Transmitter Licence Fees) Bill 2006, provides payment machinery and record-keeping obligations to support the datacasting bill.

As I mentioned earlier, the government has indicated its intention to conduct the auction for the channel A licence early next year. The offer documents for the auction will need to specify the obligations of licensees. It is important that prospective bidders are informed as soon as possible about the nature of the regulatory obligations attaching to these licences.

Labor will support the passage of these bills through the parliament to impose a licence fee. The broadcasting spectrum is a scarce public resource. As a general principle, it is appropriate that the holder of a licence to provide services on this spectrum be required to pay an annual licence fee to the Commonwealth for the privilege of being able to offer these services. This principle has long been recognised in relation to radio and television services.

Notwithstanding the fact that the opposition will support this bill, we would like to take the opportunity provided by this debate to make some broader comments about the proposed channel A service and digital television policy in general. According to the government, the new channel A licence will have two significant policy impacts. Firstly, it has been argued that the new services will provide media diversity and will offset the effect of increased concentration and ownership as the inevitable consequences of the government’s new media laws. This claim is nothing but an attempt to deceive the Australian people about the impact of the new media ownership laws.

The restrictions on the new channel A licence mean that the services that will be likely to be broadcast will be limited to narrow types of services. There could be religious channels, a home shopping channel, a traffic report channel or a government services information channel. Channel A will not be a new commercial television service. It is nonsense to argue that these channel A services will offset the loss of diversity of news and opinion that would come about if a major metropolitan newspaper like the Age or the Sydney Morning Herald merged with a TV station like 7 or 9.

The government have also argued that channel A will be a significant driver of the take-up of digital television. This claim is open to considerable debate and I am sure we are going to hear from the government about what they think on this issue. As I stated earlier in the debate on the digital television bill passed last month, the government restricted the channel A services to programs which fit the description of narrowcasting, datacasting or community television. These of course are all niche services.

There is considerable scepticism in the media industry about whether there is a viable business model for channel A given that the licensee will be only able to show a limited range of programs. Perhaps that is something the member for Hinkler can address in his remarks—whether this will provide the sorts of services that he is looking forward to in regional Queensland or that might be provided to regional Australia.

News Ltd and Fairfax have indicated that they are not interested in bidding for this spectrum because they do not think that it is sustainable commercially. I think that says a lot about what the government is actually trying to do in this bill and what it has done in terms of its cross-media ownership laws.

It is interesting to note that in the explanatory memorandum to the datacasting bill the government declined to make any estimate of the amount of money that will be raised from the annual licence fee imposed by the legislation. This may be an indicator that even the government is aware that it is auctioning something that is unlikely to generate a significant revenue stream. It is very unlikely that channel A will make a significant contribution to driving the take-up of digital television.

The rollout of infrastructure to broadcast in digital has made excellent progress in the country—85 per cent of the Australian population can access all of their local free-to-air services in digital. However, in Australia and overseas it has been shown repeatedly that additional attractive digital content is the key to convincing consumers to invest in digital television. It is that element that has been missing from the government’s digital policy for the last seven years. The recent digital television legislation makes only a minimal attempt to address this deficiency. As most people would know, even if they have got digital television at home, it is almost a matter of saying: ‘Why would you have it? Why would you bother? Why would you spend the extra dollars required?’ It is quite expensive. The content that is likely to be shown on channel A will not appeal to a mass audience. It is clear that the rules regarding channel A were not designed with the interests of consumers in mind.

Back in 2000 the government set a target to switch off analog broadcasting by the end of 2008, which is now approaching very quickly. Of course, it has been clear for some time that there is no way this target will be achieved. Last week the Minister for Communications, Information Technology and the Arts, Senator Coonan, released what she called her ‘digital action plan’ to drive take-up so analog broadcasting can be switched off by 2012. Unfortunately the digital action plan is further evidence that the interests of consumers are a very low priority in the government’s media policy.

In the digital television legislation rammed through the parliament in October, Senator Coonan put in place a regime which limits consumer choice and reduces incentives for consumers to invest in digital technology. For example, commercial broadcasters can only run a second digital channel or multichannel in high definition until 2009—all a little bit too complex. At present HD equipment, high-definition equipment, is in only around seven per cent of households, which I think is a very poor outcome and an indictment of this government’s policies. It is typically three times as expensive as standard definition equipment. This restriction may suit the interests of some media companies, but it is very hard to see how it is in the interests of any consumers at all. The market for high-definition broadcast is so small that it must be doubtful whether it will be commercially viable for any broadcasters to launch a high-definition multichannel.

Senator Coonan’s legislation also severely restricts the ability of free-to-air broadcasters to show major sport on their digital multichannel service. Under the government’s laws, if for example there is a clash between the 7 pm news and a netball test between Australia and New Zealand, the ABC is not allowed to show the match live on ABC2. You would have to wonder how the government could possibly argue that this restriction is in the public interest. Again, perhaps that is something that the member for Hinkler can address in his remarks and tell us how that would be in the interests of his constituents, of regional and rural Queensland and of other regional parts of Australia. How will it encourage consumers to take up digital TV? This is the question that needs to be asked. This government is not serious about putting in place a media policy that puts the interests of consumers first.

There is much work to be done in getting Australia to the point of digital switch-over. As the minister admitted last week, more analog equipment is still outselling digital equipment. So, while 41 per cent of households have access to digital television, 26 per cent of households have two or more sets. One set-top box or digital TV per household will not be enough to allow switch-over to proceed.

Research commissioned by the Australian Communications and Media Authority indicated that only 17 per cent of televisions in Australia have been converted to digital. Again, that is a very poor outcome and a very poor indictment of the government’s policy in this area. The task of achieving digital switch-over is a huge policy challenge for this country. Australia and the UK are both due to complete switch-over to digital by 2012, some many years after the government had originally indicated would be the date. However, the UK is far more advanced than Australia along the path to digital transition. 72.5 per cent of households have access to digital TV in the UK and it is estimated that 40 per cent of TVs have been converted—a much better outcome.

In Australia there is still a widespread lack of awareness in the community about digital TV. Fifty-seven per cent of people do not know whether digital television is available in their area. Thirty per cent of people are not aware that analog broadcasting will be switched off at all. Measures announced in the digital action plan, such as improved labelling of analog equipment, increased consumer education on the benefits of digital TV and industry coordination, are absolutely essential and Labor encourages the government to progress these matters as quickly as possible. The announced measures, however, do not make up for poor government policy that limits the appeal of digital television to consumers.

The digital action plan announced by the government contains no additional money to allow the ABC and SBS to create new attractive digital content which would encourage consumers to take up digital. Labor believes that the national broadcasters have a key role to play in building a digital Australia. Through ABC2 and the SBS world news channel, the national broadcasters have shown that they are keen to embrace the potential of digital television. They need government to maybe go that one step further with them to make that happen. If public broadcasters are to exploit the full potential of digital television then additional funding will be required. It is the old case of the government needing to put its money where its mouth is. Currently ABC2, the ABC’s digital-only channel, runs on around $2 million a year. If you put that into the context of costs of programming and content, $2 million is literally a drop in the ocean.

As a consequence the service largely consists of time-shifted material from the main channel and children’s programming. Exciting new content is needed to drive digital uptake. Given where we are currently at in digital uptake, perhaps we need to go that one step further—swing the pendulum a little bit too far in order to make amends and bring people on board, to drive them to seriously look at digital uptake. Otherwise, I am afraid that even by 2012 we are not really going to get the sorts of outcomes that the government is hoping for.

The ABC and SBS both made bids in their triennial funding submission for the resources to make this content happen. The ABC asked for funding to broadcast an extra 200 hours of digital-only content for the ABC2 and ABC broadband platforms. Two hundred extra hours is not a lot. They also sought to develop interactive television enhancements to differentiate digital from analog television. SBS sought funding for two new digital-only channels. These proposals were completely rejected by the government which, if the government seriously wants to make this happen, should not be the case. In the UK, extra channels and interactive services offered by the BBC have been a key driver of digital take-up.

In the lead-up to next year’s budget I urge the government to reconsider providing extra funding to the national broadcasters as a way of increasing the appeal of digital television to ordinary consumers. The announcement by the minister last week that a firm date will be set for digital switch-over is welcomed, but there is no point setting a date unless it is backed by credible policies as well as dollars.

Senator Coonan’s digital action plan comes seven years after the former minister, Richard Alston, released his digital broadcasting industry action agenda. Regrettably, the digital television regime that the government has legislated means that Senator Coonan’s plan is likely to be only a moderate improvement on that of her predecessor. So while the government has spent years dithering on digital policy, other developed countries have rapidly moved into the digital age. People listening to this might draw a comparison to broadband to the home to show where this government has left this country in terms of moving into the 21st century properly.

The take-up of digital television in Australia lags well behind countries like the UK and the US where governments have invested heavily in the transition. Achieving digital switch-over offers sizeable benefits for the Australian economy as well as for consumers. It is not just about giving consumers a better viewing experience. The reason why governments around the world have made achieving digital switch-over a policy priority is that it offers a large efficiency benefit known as the digital dividend.

As I have said in the House previously, there is strong public interest in freeing up the spectrum currently used for analog broadcasting so that it can be deployed for additional TV channels or wireless broadband services. More efficient use of spectrum could be worth hundreds of millions of dollars to Australia. In addition to this efficiency dividend, achieving switch-over would end costly simulcasting where broadcasters are forced to transmit in both analog and digital, which is obviously inefficient. The government has conceded that every year it costs around $75 million to meet the analog broadcasting costs of the ABC and SBS, which assists regional broadcasters.

Digital switch-over would also allow these funds to be redirected to programming. I am sure that this would be welcomed by all viewers. I conclude my remarks today by restating that the opposition will support this legislation so that prospective bidders in the auction of channel A can have a measure of certainty about the costs involved if they want to acquire the licence. Labor has very grave doubts about whether channel A will have a significant impact on the take-up of digital TV. This government needs to seriously rethink its approach; it needs to design a policy that serves the interests of the community and serves the national interest and the economy. I commend the bills to the House.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

The Datacasting Transmitter Licence Fees Bill 2006 and the Broadcasting Services Amendment (Collection of Datacasting Transmitter Licence Fees) Bill 2006 are another step forward in the allocation of channels through unused spectrums to enhance digital services. I welcome the opposition’s support of this legislation, but the previous speaker, the member for Oxley, was far too harsh in his assessment of what has been happening.

By way of preface, Australia, in adopting various forms of broadcast and telecommunications, has always taken the cautious approach. We were not one of the first countries out there with black-and-white television but, when we did get it, we had the best standard and it was readily taken up. The same applied to colour television. I am confident the same will apply to digital television.

I remember David Hill, when he was the Managing Director of the ABC, giving a public lecture in Bundaberg. I was not in parliament at the time. He described Australians as electronic junkies. He pointed out the rapid take-up of black-and-white and colour television. He also talked about things like VHS machines, fax machines, mobile phones and the like and how readily we have embraced those things. For a country as wide and diverse as this, there is GSM coverage somewhere in the order of 96 per cent and CDMA coverage of about 98 per cent of people in their homes in this country. That is not to say that we cover the whole of the nation. You do not put 25 transmitters in Sturt Stony Desert, for example. But it has been an orderly and measured approach.

It is true that the turn-off date has been put back to the year 2012, but the government’s original plan was to turn it off in 2010. If I recall correctly, it was the Democrats which had that amended back to 2008, and that was probably too ambitious a target. But there have been a lot of movements over recent times, not the least of which is the fall in the price of set-top boxes. I have seen them as cheap as $49. I do not know how good they would be, but you can certainly get quite acceptable models—the member for Herbert is an expert in these matters—in the range of $50 to $100. There may be opportunities further down the track, with respect to those last few people who perhaps cannot afford set-top boxes, where the government will consider some form of subsidising those so that all people can participate in the digital agenda. I for one would certainly support that, and I know that the Minister for Communications, Information Technology and the Arts is not averse to it, although I think her view is that that would be premature at this stage.

The other thing we have to recognise is that all the free-to-air channels have seven megahertz of analog spectrum. That applies to the ABC, SBS and the three major commercial channels, and in most country areas—not all—their commercial affiliates also have seven megahertz. When we do turn off analog, a lot of spectrum will be freed up, and certainly the government and no doubt the people who wish to use the spectrum can be more expansive and creative. What we are doing now is putting a toe in the water of expanding digital television in two forms. One is in channel A, as the member for Oxley quite rightly said—a datacasting channel that includes datacasting, narrowcasting and probably community television. No-one is saying that that is the be-all and end-all of digital television—absolutely not. What we are saying is that it adds another dimension to digital television. It will, for example, have text and film, and the sorts of things that we will see will be another tool in the home’s total communications package that will allow people to get a better appreciation of the services that are available under this method.

As things like broadband expand across Australia still other opportunities in the digital field will emerge. Talking about channel A and channel B, they hold great opportunities for specialisation and specialties for Australian audiences. They also allow smaller niche proprietors and media proprietors into the market. Aside from data services and general texting, there would be information like the Stock Exchange, weather information and government services. There will also be a narrowcasting section where you can look at programming on things like religion, rural matters, lifestyle and shopping. The only restriction there will be that it must not be look-alike television. I felt the member for Oxley was straying into that field by saying this channel A should be allowed some form of de facto recognition so that it could get into that field. Once you do that you then muddy the waters. I think it will be a matter of the government taking the brakes off slowly and, in so doing, enhancing the services that are available on channel A.

The two bills essentially extend the same licence fee obligations that the free-to-air commercial television stations have to whoever is the successful holder of the channel A licence. In other words, these licensees are required to pay an annual fee based on the gross revenue of each entity. The new entity will be no different. The government is amending the Broadcasting Services Act 1992 and creating a framework for the payment and record-keeping obligations of people who are going to participate in this channel A regime.

I would like to take the opportunity to expand on the potential I envisage channel A might hold. Australia is one of the most culturally diverse nations on earth. We are a multicultural and a multifaith country, with the majority of our population living outside the metropolitan centres. These facts would indicate that there is a broad scope for attracting audiences that have a particular interest in specialised subjects, whether that be religion; business, through financial reports, Stock Exchange reports et cetera; rural content, through market prices and all those sorts of things; and government facilitation services. Interestingly, in the trial that is going on in Sydney at present, the New South Wales government is trialling those government facilitation services as part of a potential channel A type experience.

Although this matter has not been decided yet, I would favour seeing Channel 31, certainly in country areas, on this spectrum. I think that would allow the Channel 31 agenda to move outside the capital cities using this as the conduit. If you wanted to establish Channel 31s in most existing television markets it would be an extraordinarily expensive operation, probably beyond the capacity of most places, except perhaps Newcastle and Canberra. All the other areas I think would find it very difficult. I am one who would favour the use of community television through this medium, but, as I said, the matter has not been decided yet. I think it would really add to the scope and the reach of Channel 31.

The other thing we need to recognise is that if, as is being proposed now, some of the free to airs under the ‘lose it or use it’ provisions are going to make football games available to Channel 31, it would be untenable to have football on Channel 31 in the metropolitan areas but not available to people in country areas so that you could watch two games. I for one cannot understand why we cannot watch two football games on a Saturday or Sunday on, say, two separate channels, whether you do that by expanding the scope of multichannelling or whether you do it this way, through a channel 31. Why can’t we see, for example, the game of the day in high definition on a major channel and then, on a subsidiary channel—be that a multicast channel or a channel 31, which in this instance would probably be a narrowcast channel—watch the game of state interest?

If, for example, the Broncos are playing the Cowboys, it may not be the game of the day, but you can imagine that most Queenslanders would want to watch that. Or, if two Sydney clubs are playing and it is not the game of the day, you could imagine that a lot of Sydney people would still want to watch that game, be it NRL or AFL. I think that this is a good step forward. It is certainly new territory. There will need to be some experimentation, and I am sure that government will not be mean fisted in allowing whoever gets the licence to make a success of it.

There are some, too, that would like to see a competitive service to the ABC in rural areas, perhaps somewhat different from the major ABC channel—not necessarily a carbon copy of it—where you could have stock reports and interviews and things about rural matters, such as the use of chemicals, varieties of cropping, methods of harvesting, methods of marketing and all that sort of stuff. The ABC does an excellent job, and I do not diminish that for a minute, but this could be yet another service and it might allow industries in rural areas on a commercial basis to be able to support a narrowcast within a channel A format.

So it is another step forward. I do not know what the member for Oxley meant about the ABC, but the genre restrictions on the ABC and SBS are about to be lifted, which will allow them a lot more scope both in their major ABC channel and in ABC2. So this is a good bill and another step forward in digital transmission, and I commend the bills to the House.

Sussan Ley (Farrer, Liberal Party, Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I thank the members for Oxley and Hinkler for their contributions on the Datacasting Transmitter Licence Fees Bill 2006 and the Broadcasting Services Amendment (Collection of Datacasting Transmitter Licence Fees) Bill 2006. I do, however, note that the member for Oxley made various disparaging comments during this debate about the government’s media reforms generally. This is the same rhetoric that we have been hearing from the opposition on these issues for some time now. It is very difficult to take them seriously when all we are hearing is opposition for opposition’s sake and no policies to offer in return.

It is the government that has done the hard work to achieve media reform that will deliver benefits to consumers and allow Australia’s media industry to adapt to and make the full switch to digital and continue to deliver quality services to consumers into the future, including the new digital services that are the subject of this legislation. By contrast, the member for Hinkler outlined, I believe very well, the benefits and the flexibility, particularly the flexibility of the new digital age in a country that, as he said, is diverse both in rural and regional areas and in culture and ethnicity. I thank him for that.

If I can use my own electorate of Farrer as an example, digital multichannelling will, I hope, allow the citizens of Albury, which is in New South Wales, to receive a New South Wales news service. At the moment the only one that we are able to receive on television is a Victorian news service. If they had a vote, most people would actually prefer the Victorian service. I do not know why. Nevertheless, digital multichannelling will give the people who want to see a New South Wales news service an opportunity to do just that, so that is one single advantage for my own area.

These bills are part of the implementation of the government’s media reform policies in relation to the allocation of datacasting transmitter licences for the two unallocated television channels. The Broadcasting Legislation Amendment (Digital Television) Bill 2006, passed by parliament on 18 October 2006, provides for the allocation of one set of licences: channel A datacasting transmitter licences for fixed, in-home, free-to-air digital services and the other, channel B datacasting transmitter licences, for a potentially wider range of digital services. These bills will require the channel A licence holder to be subject to a revenue based annual licence fee in addition to the up-front payment resulting from a price based allocation system. The Datacasting Transmitter Licence Fees Bill 2006 provides for the annual licence fee to be determined according to formulae based on the formula used to calculate commercial television broadcasting licence fees.

The Broadcasting Services Amendment (Collection of Datacasting Transmitter Licence Fees) Bill 2006 amends the Broadcasting Services Act 1992 and the Radiocommunications Act 1992 to provide payment machinery and record-keeping obligations to support the administration of datacasting transmitter licence fees. This will ensure that channel A services are subject to licence fees consistent with the fees levied on commercial television broadcasting services and that the compliance obligations in relation to datacasting transmitter licence fees will be similar to those currently imposed on commercial television broadcasting licences under part 14A of the Broadcasting Services Act.

Passage of these bills will enable the Australian Communications and Media Authority to set licence conditions for the channel A allocation process, which the government expects to be completed for both unassigned channels as soon as practicable in 2007. Once again, I commend the bills to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.