Like all new governments, Julia Gillard’s rule has the chance to start afresh in its relationship with News Limited, which had become, to put it in understated terms, toxic under Kevin Rudd.

News had committed to Rudd’s destruction, although to their undoubted chagrin it was Peter Hartcher and Phil Coorey’s revelations about Rudd’s spectacular misjudgement in dispatching his chief of staff to sound out Caucus that enabled last week’s execution, rather than the increasingly shrill campaign coming from the News Ltd mastheads.

There are two pending government decisions of great interest to News Ltd. One is on the review of the anti-siphoning list, which was supposed to be done last year but remains unreleased. More to the point, the list itself expires at the end of this year.

Stephen Conroy can simply make the list himself — there are no legislative requirements — but in practice the decision about what’s on the list will ultimately be one for Cabinet.

Indeed, it’s not unknown for communications ministers to go to Cabinet with proposals to significantly reduce the list, and for their colleagues to put back on what they wanted to remove.

News has an interest as quarter-owner of Foxtel but its more significant interest is in Premier Sports Group, which it co-owns with James Packer’s (and, these days, Kerry Stokes’) Consolidated Media Holdings. Premier is the principal domestic sports content player for subscription television, and was highly profitable long before Foxtel. Indeed, Telstra long suspected Foxtel was unprofitable for so long because its partners in Foxtel were gouging it over sports content costs through PMG.

Similar to the internet filter legislation, Conroy has let the anti-siphoning review run dead in the lead-up to the election. Conroy’s own instinct is to extend the anti-siphoning list, not merely to put soccer back on, but to try to rope in IPTV and online services and ban them from competing with free-to-air television, which the list is designed to shield from competition.

To better enable that, Conroy also wants to allow the free-to-airs to put listed events on their digital multi-channels. However, the sheer absurdity of some entries on the list means some pruning has to happen. Having events like the French Open and not one but two Australian golf tournaments makes it the most punitive in the world, comparable only to the French list, which features such sporting extravaganzas as the European handball championships.

Meantime, the AFL has been trying to nut out the long-mooted solution to coverage of its games, by ‘delisting’ four games a week — which sounds simple but is administratively complex and plagued by problems, such as its desire for ‘flip-flop’ matches in Adelaide and Perth every week. As a sports rights holder, the AFL is a victim in all this, but like Australian audiences who have long been the object of FTA contempt in their scheduling and coverage of listed events, they lack the political muscle to seriously influence politicians.

The subscription television industry has always said FTA multi-channelling would be the last straw in a regime that has systematically undercut their competitiveness and profitability right from the outset. Only a dramatic pruning of the list could offset the industry’s fury, but that could spark a reaction from the FTAs. FreeTV Australia would be able to quickly restart its ludicrous ‘Save My Sport’ campaign.

So who does the government upset more: News Ltd, with its influential tabloids, or the FTAs, who will play a critical role in the election campaign through their evening news bulletins? You can see why Conroy looks like he’ll let the issue slide past the election.

The other issue for the government — with not quite such an urgent timetable for resolution — is the future of its international broadcasting service contract, which expires in August 2011. Two weeks ago the government called for industry submissions on the service, currently provided by the ABC, including whether to go to tender.

News’ interest in this is indirect but substantial nonetheless. Back in 2005, when the first ABC contract to provide the international service was drawing to a close, Sky, which is not directly owned by News Ltd but has an indirect relationship through BSkyB, lobbied hard for the ABC to be turfed out and Sky given the contract. News Ltd’s lead lobbyist was Malcolm Colless. But even the Howard government wouldn’t come at dumping the ABC, which convincingly won the tender process.

It’s not so much about the money — $90 million-plus, which after the provision of any decent regional services leaves little change — as about status, and News Ltd’s desire to undermine the ABC as the national broadcaster. But the threat to Sky News from the ABC’s forthcoming 24-hour news channel means the stability of anchor funding from the federal government will be even more appealing.

News Ltd’s constant criticism of the ABC — and particularly the latest round of abuse directed at ABC Television’s failure to abandon 95% of its viewers last Wednesday night and serve a handful of political obsessives with coverage of the leadership blow-up — should be seen entirely in this context.

The government’s call for submissions on the future of the service, however, suggest an alternative.

The international broadcasting service might be a fine product from the ABC, but it’s a waste of taxpayers’ money. There is no compelling policy rationale for running an international service like this. It’s the product of 1990s thinking (it was Alexander Downer in 2000 who established the current service), back when cable news channels like CNN were seen as a key media platform. It was the same sort of thinking that drove David Hill to devote considerable ABC resources trying to establish a subscription TV channel (assisted by a certain Kim Williams) and set up the original ABC International television service in the early 1990s.

Media has long since moved on, and broadcasting is now one platform, and a shrinking one, in the panoply of media choices available to consumers in the region. If an Australian international broadcasting service was ever relevant to and influential in the region, it has long since ceased to be so.

Next year, the government shouldn’t go to tender for the service and shouldn’t choose between the ABC and Sky. It should save itself a nice chunk of change and drop the service altogether.

Peter Fray

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