Consumers and shareholders come last in media ownership reform
Beware of communications ministers prognosticating about the media. Here’s Malcolm Turnbull yesterday:
“Why in an age when the internet has become the super platform …to which everyone has access … why do we need to have platform specific ownership rules dealing with newspapers and radio and television? One of the big differences between my approach to this and Stephen Conroy’s is that Conroy and the Labor Party saw the arrival of the internet as an opportunity for more regulation and less freedom in the media. My view is the arrival of the internet, and the additional diversity and avenues for competition that it brings, really says we should have less regulation and more freedom.”
Turnbull’s remarks were nearly exactly 14 years since his predecessor as Coalition communications minister, Richard Alston, also declared the internet was a good reason to dump media ownership laws. Alston had a couple of goes at trying to remove media ownership laws. In 2002 he argued:
“It is this new media reality that drove the recent AOL/Time Warner merger and is resulting in companies such as Bell Canada and CanWest expanding across traditional media markets. It is the primary rationale behind the proposed Foxtel/Optus pay TV arrangement, with the participants recognising the importance of offering consumers a wider array of content choices across various platforms. It has also led the ABC to pursue its One ABC strategy, which seeks to adapt and exploit content across mediums, including through the provision of digital multichannels on pay TV.”
History, alas, has not been kind to Alston’s arguments. AOL/Time Warner is now taught in economics and business administration classes as one of the worst mergers ever. CanWest, which used to own a controlling stake in Ten despite the old prohibition on foreign ownership, went bankrupt in 2009, not long after it flogged its shares. The Foxtel-Optus merger delivered a monopoly in metropolitan markets and paved the way for the Foxtel pay TV monopoly we now have. And the ABC wasn’t “led” to its One ABC strategy by any “new media reality” it came about in response to Alston and John Howard cutting its budget by 10%. By the time Alston was writing those words, then-ABC boss Jonathan Shier had already dumped much of the One ABC structure and moved on.
Turnbull’s remarks about welcoming the internet with less regulation and more freedom are just as silly. Let’s nail those for the garbage they are right now. At the moment, in Turnbull’s very portfolio, his parliamentary secretary, Paul Fletcher, is working to establish an internet censorship scheme that has infuriated large social media companies (smaller, more recent arrivals that middle-aged bureaucrats and politicians aren’t aware of, like Snapchat, aren’t included). And Attorney-General George Brandis has announced he is considering implementing the copyright cartel’s plan for three-strikes legislation or some other mechanism to force internet service providers to spy on and block users file sharing.
Moreover, the Coalition has form in internet regulation; it was the Howard government that banned online gambling, an absurd and meaningless effort at prohibition that even Turnbull’s department wants to dump, and it was the Howard government that banned online discussion of euthanasia. And if you think that’s a dead letter, ask Dr Philip Nitschke who was harassed and had information stolen by Customs while leaving the country in January.
So while Turnbull points to the internet and declares “let freedom reign”, he is part of a co-ordinated effort to impose more regulation on the internet, partly designed to stop consumers using it to thwart the will of the biggest old media companies, some of which are controlled by a certain “demented plutocrat”.
But for governments, consumers are just eyeballs to be shunted around between old media companies without any reference to what consumers might want. On the hierarchy of political interests, the benefits to consumers of, for example, additional competition has always come a distant — very distant — second to the interests of media proprietors.
“The most likely outcome of a new round of mergers will be deals that pay much money for weak assets …”
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