The release of yesterday’s Convergence Review interim report was, appropriately, via some old-fashioned media management by the review group led by Glen Boreham — drops to News Limited, Fairfax and the ABC ahead of the actual release. Convergence, it appears, doesn’t apply to shaping coverage of the report.

Let’s spend a bit more time teasing out the implications of the report’s proposals — bearing in mind it’s an interim document and not the settled outcome of the review.

I argued back in April that the big threat from the Convergence Review was that media companies would use the review to co-opt government into imposing a crippling regulatory burden on online media because of the competitive threat they pose, and they’d use consumers’ interests as the figleaf for it. This is a ploy that has been used time and again in Australia and the United States as oligopolistic media companies acted to stifle innovation and competition.

That’s exactly where the Convergence Review has come out. Not merely does it propose to shackle online media companies with media diversity and local content requirements, it proposes a significant reduction in the diversity and local content obligations currently on the commercial television sector. In effect, the review proposes making life significantly easier for the commercial free-to-airs and significantly harder for their new media competitors.

This is a huge win for the free-to-air television networks. Bear in mind that the current media regulatory environment is heavily skewed in favour of the free-to-airs. They are protected from competition by the ban on more television licences. They were gifted huge slabs of free spectrum for over a decade as part of digital transition. Sports rights holders are compelled to surrender significant revenue to them via the anti-competitive restrictions of the anti-siphoning scheme.

In theory, though, this special, cossetted status also meant that the broadcasters had a special obligation to meet requirements around Australian and children’s content.

In effect, the convergence review proposes removing those obligations onto the free-to-airs’ competitors, while leaving intact the benefits they currently enjoy — the review is silent on a fourth network or anti-siphoning, saying only that broadcasters should be paying for spectrum on a more efficient market basis. It also explicitly rejected the idea of extending content requirements to the free-to-airs’ multichannels.

The subscription television sector ought to be very concerned that yet again the ground is being prepared for the industry to be dudded at the expense of the free-to-airs. In this way, the convergence review is remarkably similar to previous government reform attempts, despite the ground-breaking nature of some of its other proposals.

Bear in mind the report also goes well beyond proposing that the largest non-traditional media companies in Australia — Apple, Google, Telstra et al — be considered “content service enterprises” and regulated for media diversity and local content purposes. It proposes regulating all online content providers.

“… it is not intended that all content providers be classified as Content Service Enterprises. Emerging services, start‐up businesses and individuals should not be captured by unnecessary requirements and obligations. Despite this, all content providers will still be subject to some requirements, such as those protecting children from harmful content.”

That is, “emerging services, start‐up businesses and individuals” “will still be subject to some requirement”. That ropes everyone in, and, incidentally, seems to set the bar quite low for what would be considered a “content service enterprise”.

What the requirements to be placed on “all content providers” are isn’t made clear; much content is already illegal — the obvious example being child p-rnography. But given the report suggests abandoning the whole idea of content licensing, that may mean an internet filter of some kind, otherwise any “requirements” would be a dead letter, particularly when it comes to overseas-based sites. And note the report explicitly indicates that individuals — your average blogger — would be the subject of such requirements.

How many bloggers who use bad language or carry NSFW pictures — which could be most of them — would be prepared to put an effective age verification tool on their sites in order to avoid being blacklisted for not “protecting children from harmful content”?

Let’s be clear — it may not come to that, but at the moment, it’s hard to see how that sort of scenario is plainly excluded from the statement in the report.

The final report may make all this clearer. Hopefully it will be significantly more detailed. But “individual content providers” out there might ask themselves how much faith can they have that this won’t end up repeating the same cycle of anti-innovative media regulation we’ve seen so often before?

Peter Fray

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