Datacasting really is bullsh-t. Nevertheless for a while it looked as though we should make the best of it. In early drafts of Senator Helen Coonan’s media reform package the two new datacasting licences to be made available next year looked like the only big benefit for consumers in the short term, and the main means by which she would try to shoe-horn some diversity into the media landscape while keeping the existing free-to-air networks if not happy then at least manageably disgruntled.

She said datacasting should be redefined to make it attractive, and she said she was determined the licences should go to new players offering innovative services.

Yesterday’s announcement has failed to deliver. One datacasting licence will be for in-home services. The free-to-airs will be banned from bidding for it, but it will probably be so limited that nobody will want it in any case.

As for the other licence, it will be used for mobile television services, and will be attractive (although not that different from existing 3G mobile phone services) but guess what? The existing moguls will be allowed to bid.

How exciting is this for consumers? You can tell by the fact that the tabloids barely mention yesterday’s announcement. Exciting new services for consumers? I don’t think so.

Datacasting is defined by government regulation. The technology is exactly the same as digital television, but the government has already ruled out a new fourth television network, so has invented Datacasting and defined it so narrowly that so far nobody has been interested in doing it.

Datacasting is therefore part of the long history of governments and broadcasting regulators seeing it as part of their job to protect the revenue and business models of existing players, rather than opening up the spectrum to competition.

The Productivity Commission called the Government’s bluff back in 2000, calling on it to drop the Datacasting nonsense and simply open up spectrum as rapidly as possible to new entrants.

Why were free to air networks so protected from competition, the Commission asked? Arguably because they were saddled with the cost of meeting other government requirements, such as Australian content levels and the like. But lots of other industries – building for example – had to carry the cost of meeting government requirements, without dominant players expecting to be protected in return, the Commission said.

The real reason for protection is of course the politically pragmatic one. It is a brave politician who takes on the owners of the population’s main source of news and information.

At the beginning of this long process of media reform, I thought Coonan was doing her best in the unenviable job of balancing the politically possible with the public interest. It looked for a while as if we would get good broad definitions of datacasting with the new services delivered by new players, together with greatly delayed reform of cross media ownership legislation. Sure it would have been nice to have a fourth television network too, but that was never likely to happen.

Now the key things that balanced the package are gone or heavily compromised. With two National Party members withholding their support, Family First Senator Steve Fielding becomes important. Its hard to imagine what Coonan will say to convince him that this plan is the best for Australian families.