Media CEOs — including Nine’s David Gyngell, Seven West Media’s Don Voelte, AAP’s Bruce Davidson, APN’s Brett Chenoweth, News Limited’s Kim Williams, Foxtel’s Richard Freudenstein and Sky News’ Angelos Frangopolous — have written to the government expressing concern about media regulation. Crikey has obtained the unpublished letter …

We write to you to express our strong and united opposition to some of the recommendations in the Convergence Review and the Finkelstein Review. The Government is currently considering both of these reports.

We are particularly concerned about: the so called proposed ‘public interest’ test on media ownership; the recommendations on management of press complaints; and the tone and framing of the debate on these matters.

Convergence Review and ‘Public Interest’ test

The Convergence Review has recommended the Government introduce a new ‘public interest’ test for the ownership of media assets. Each of the signatories to this letter opposes this for the following reasons.

  • The matters likely to arise are well covered by existing legislation.
  • Massive increase in regulation–– The public interest test represents a significant increase in regulation. It’s an additional test to the extensive pro-diversity and pro-competition tests that already exist. These include the rules on media ownership that the ACMA administers today as well as the ACCC’s extensive pro-competition powers which should not be underestimated or dismissed given their extensive reach and power.
  • Subjective, vague and imprecise — The public interest test is flawed on policy, regulatory and legal grounds. Unlike the ACCC tests or even the ‘bright line’ ownership rules the ACMA enforces today, public interest tests are subjective, vague and imprecise. The Convergence Review has not even been able to define such a test. Frankly such an approach is quite unacceptable as the basis for managing billions of dollars in asset value in the media sector and will compromise those asset values (and accordingly Australian and international equity holders) negatively — this is both unfair and inequitable.
  • Has not worked overseas — Such tests has not worked overseas. For instance, the UK, which does not have extensive pro-competition rules as in Australia, introduced a public interest test. It took the regulator over three years to decide whether it was in the public interest for BSkyB to acquire a relatively small percentage of ITV.

In the commercial world waiting this long for such a decision is unacceptable and indefensible. It would lead to a drying up of M&A activity which is critical to the economy generally and to reinvigorating companies and better serving consumers.

  • “Political interest” not public interest test — While a “public interest test” may have an appealing sounding ring to it, it is really, in our view, nothing more than a political interest test. It has the capacity to be misused by politicians of all persuasions to block the acquisition of media companies by people they do not agree with or simply do not like.

There is a wide number of decisions by Governments (of all political persuasions) we could all nominate which were supposed to be “independent of Government”. But in fact key Ministers, wielded much greater influence in the decision than would have been the case if administrative independence had been observed.

  • ACCC already has extensive powers — the new test is completely unnecessary as the ACCC has extensive powers to preserve media diversity in its administration of pro-competition laws. No one has ever suggested that the ACCC is anything other than independent or influenced inappropriately by any respondent to its inquiries, reviews and approvals. It is a ferociously independent in its operation and quite fearless as demonstrated over a long operational and decision making history.
  • Underplays developments in the digital economy — The recommendations underplay developments in the digital economy, the low barriers to entry to setting up media businesses and the fact that consumers are empowered as never before. If people do not like the views expressed by a journalist or columnist in a particular outlet — they have a very wide range of other options.

Indeed, we have to say as people who run media businesses in Australia that the major disappointment with the approach adopted in the Convergence Review was how little the Review reflected what is going on with consumers and technology. It also put startlingly little faith in the abundant good sense of Australians to make up their own minds. The Convergence Review’s instinct appears, in too many instances, to be to recommend heavy handed regulation rather than “regulatory forbearance”. It is we suggest a patronising approach to consumers and out of touch with the temperament of the time.Government intervention in complaints systems threat to free speech

We also strongly oppose the recommendations of the Finkelstein Report and the Convergence Review in relation to press complaints regulation.

We oppose Finkestein’s recommendations on the following grounds.

Dangerous to free speech. The proposals from Finkelstein are deeply worrying as they recommend an out and out assault on freedom of the press. Under Finkelstein’s recommendations journalists can be fined and jailed. Moreover it is seriously proposed that there should be no appeal rights to the Administrative Appeals Tribunal on decisions made by the new body.

Finkelstein also recommends the body be Government funded. We are deeply concerned that a body whose sole purpose is to supervise news and current affairs should be even partly funded by government. The risk that such a body will be subject to political controls and influence is too great to contemplate in a democracy.

Will not work – The complaints management system proposed by the Finkelstein Review will not work because: the processes they recommend are too legalistic; they have extended the complaint ‘net’ to bloggers so the system will be clogged with complaints; and it should be added the system will be legally challenged by media companies as being quite unconstitutional.

Self-regulation better solution – The publishers have agreed to substantially enhance and renew self regulation mechanisms including making larger financial contributions in the case of News and Fairfax and an independent complaints tribunal in the case of WAN. This is a much better solution. It balances free speech with the right of the public to seek effective redress.

We similarly have concerns with the recommendation of the Convergence Review in relation to dealing with complaints and enforcement for both print and broadcast media. The Convergence Review claims they have adopted a deregulatory approach and for this reason are proposing a ‘self regulatory’ approach that will apply to both print and broadcast media. But it’s not a self regulatory approach as the Government is able to intervene for example, by compelling companies to join the complaints handling body. This is completely at odds with the notion of self regulation.

Further, the proposed super regulator will sit ‘over the top’ of the new Press Council and be able to request it investigate matters and also ‘sign off’ on its codes of practice. These are features of a co-regulatory model not a self-regulatory model, and again pose a serious risk of intervention in functions which are intended to hold government to account.

We should also point out that in addition to the enhanced and reinforced self regulatory system, extensive legal remedies already exist for people seeking redress for coverage in the media including, it should not be forgotten, Australia’s defamation laws – some of the toughest in the world.

Tone and frame of the debate

We also need to express concern with the tone and framing in much of the debate.

Two things in particular concern us:

1. In some of the public debate there has been an overemphasis on coverage that some people believe is egregious with little comment (other than from some media commentators) on the important principle which is at stake here. This principle is: press freedom and the need for an independent press to hold all Governments, institutions, business, regulators and others in power to account.

2. A few politicians our company representatives have met with have used quite inaccurate analogies to explain their perspective. It has been said, for instance, that journalists are similar to doctors and that there should be something akin to a Medical Board enforcing standards. If this fails, the Government should ‘step in’.

With respect to your colleagues the analogy is incorrect. Doctors deal with health and wellbeing of our citizens (i.e. life and death). We deal in reporting, news, opinion and entertainment. This is not to say that our people should not adhere to professional standards and be accountable. Of course they should. Each of our companies has codes of practice for our journalists. But to suggest there is some sort of equivalence between the work of doctors and journalists is simply wrong. Both are important, but they are completely different.

Since the time of Magna Carta there has been a progressive empowerment of the citizenry in making those in power accountable, accessible and addressable. Central to that process over the last three centuries has been the operation of the media. Where societies have severe corruption, maladministration and distanced public policy determination and enforcement from the people it usually reflects heavy handed state intervention in the media. We implore you and your government not to let this happen in Australia.

We would like to request a meeting with you in Canberra or Sydney to discuss each of these matters in more detail.