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Dec 19, 2007

Why a public interest test for media mergers is a good idea

Why is a public interest test for media a good way to stop further concentration? Here are three very simple reasons, writes Julian Thomas.

One positive element of Stephen Conroy’s new approach to media policy is a willingness to look again at the problem of concentration in Australia’s media. If we assume that it’s important for democracies to have access to a variety of sources of information and opinion, the Minister’s comments are a welcome respite from the long duree of Coalition indifference. A debate about how to achieve something in this area is very welcome.

But Crikey contributor David MacCormack is not impressed by the Minister’s particular interest in a public interest test for media.

Proposals for such a test go back to the Productivity Commission’s broadcasting inquiry in 2000. The basic idea is to introduce new laws which would only allow mergers and acquisitions in the media sector that did not reduce diversity. MacCormack believes such a test would introduce a dangerously subjective element into Australian competition law, which he says is based on clearly-defined and objective criteria.

He doesn’t like the idea of people like the Minister, or the ACCC, or other regulators, or the courts, getting involved in decisions about media. David MacCormack wants media policy for the real world. The world he has in mind is an interesting planet, mainly distinguished by its distance from ours.

Why is a public interest test for media a good way to stop further concentration? Here are three very simple reasons.

First, new technologies won’t deliver diversity on their own. We don’t know which new media businesses are going to be the big players of the future, or where they will come from. But as the broadband internet starts to take shape, it seems likely that some established media companies will continue to play a major role, together with new powerhouses like Google and Yahoo.

Second: we need a policy that is designed for a contemporary mix of new and old media. That means leaving some flexibility and scope for judgement as technologies and audiences and business models change.

The old rules on cross-media ownership made a lot of sense before the internet or pay TV. They didn’t stop PBL or News owning large parts of Foxtel. They wouldn’t have prevented Telstra from buying a commercial TV network. The answer is not a new set of fixed limits for specific media sectors, but a broadly based test which can adapt to change.

Third: our trade practices law as it stands won’t do the job. The issue of media diversity simply doesn’t fall within the ACCC’s remit.

Yes, the ACCC is concerned with how mergers affect levels of competition within markets, but in a strictly commercial sense –

in the context of media, that basically means markets for advertising. It is the market for ideas which matters for readers, viewers, and audiences.

The new Minister’s proposal should be combined with other measures that would break down concentration. A lot of work would be needed to get the implementation right. But this may be our last real chance to build diversity into Australia’s media system.

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