The regulation revolution of the Convergence
The Convergence Review is … complicated. Appropriately complicated, in some ways, because it takes a root-and-branch look at how we regulate media and communications, identifies the flaws and proposes a wholly new approach to it.
There are big problems with some of its proposals, yes, but it deserves a detailed look at what has driven them, something most critics seem unwilling to do, preferring to attack its recommendations as though they’ve dropped out of the sky.
And, actually, the sky is relevant, because the sky, and particularly the distance radio transmissions travel across it, is the basis for how we regulate media and deal with issues such as media diversity. Our entire media regulatory framework is based on radio licence areas, which are structured around ensuring major population centres can have radio services without them interfering with each other. It’s radio licence areas, for example, that form the basis of our rules about how many media groups there can be in an area, and how you can’t control groups across all three platforms.
This approach also means that we have no way to assess the national impact of media mergers — our laws don’t recognise the existence of a national dimension to the media, so the The Australian Financial Review and The Australian don’t even count as media outlets.
The review suggests abandoning radio licence areas as the basis for regulation. That’s the single most critical part of the review, by far, even if few commentators will pick it up. From that springs a huge chunk of the recommendations across several areas.
It instead recommends regulation based on local areas and a national media environment, in which a regulator would determine the relevant local area, not radio licences, and mergers of major groups would be assessed at a national level as well.
How the regulator does that is where the problems arise: once you take away hard-and-fast rules around radio licence areas, the regulator needs to make subjective judgments about what a local area is and who the important media groups are in it, although the review recommends some guidelines for this and recommends keeping some basic numerical rules about the minimum number of media groups in an area.
Subjectivity is also the problem for a public interest test, which would be the basis for assessments of national-level mergers by the regulator (bizarrely, Malcolm Turnbull issued a media release yesterday saying that Julia Gillard would be the one making such assessments); the review also recommends a “public benefit” exemption for local area mergers that might otherwise fall foul of minimum numbers. In short, there are an awful lot of subjective assessments that the regulator will need to make.
It also recommends abandoning the link between spectrum allocation and content licensing. This is a subtle point, but an important one: currently in broadcasting the two are linked - access to broadcast spectrum comes with the rights and obligations of a content licence. Dumping radio licence areas also means you can decouple content and spectrum. That means spectrum is potentially more valuable when auctioned, because the purchaser no longer has to provide their own content services as a requirement of purchase.
The shift away from licence area also informs the overall approach to regulation of the review: instead of black-letter law based around identified restrictions such as numbers of media groups and enforced by a regulator, it suggests a legislative framework based on principles, which a powerful, independent regulator would then interpret.
And who gets regulated is also affected by this move away from radio licences areas. The review suggests that “content service enterprises”, the clunky name for media outlets, be determined free of issues about licensing and instead revolve around the issue of influence. That means newspapers (online or off) and subscription TV can be brought into the mix.
This raises a philosophical issue, at least for newspapers (pay TV is licensed and regulated under the Broadcasting Services Act now, even though it doesn’t necessarily use spectrum). Why should newspapers be regulated if they don’t use spectrum? They’re not licensed, they’re merely an expression of free speech. But the review counters that newspapers are already regulated now under media ownership laws, so there’s nothing philosophically innovative about regulating them; I might add it was the case until 2006 that foreign investment in newspapers was also specifically regulated (grandfathered for that Yank, Rupert) under foreign investment laws. Even so, the gist of the review case for bringing newspapers into the regulatory fold is, basically, because the community wants influential media regulated. Make of that what you will.
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