As the government contemplates slashing the ABC’s budget by up to 10%, Communications Minister Malcolm Turnbull is considering another efficiency gain that could deliver significant dividends to the government’s coffers.
For the first time, a rival broadcasting firm is seriously considering challenging Broadcast Australia for its monopoly position transmitting the ABC’s radio and TV services across the country. And new transmission technologies, the take-up of which is being urged by the government, mean the two national broadcasters could share spectrum in the future, which has the potential to significantly reduce the significant costs of broadcasting the ABC to nearly every home in the country.
The cost of broadcasting the ABC in particular to almost the entire Australian population, as is required by its charter, is little understood. It makes the ABC a far more expensive network to run because, unlike the commercial networks, it needs to air TV and radio everywhere. In a country the size of Australia this is extraordinarily expensive. The company in charge of this transmission was formally in government hands, but was privatised 15 years ago. Today, Broadcast Australia is owned by a Canadian pension fund, and takes nearly 20% of the ABC’s funding each year.
For years there have been concerns Broadcast Australia, the ABC’s largest supplier, was overcharging for its services. Soon after taking power, this government commissioned a consulting report from LEK into transmission costs — which is understood to conclude that BA has been overcharging the broadcasters. But it is able to do so because in the past, only Broadcasting Australia has seriously bid for the long-term contracts to broadcast ABC and SBS.
But today Crikey can reveal another player is interested. TX Australia — owned by the Seven, Nine and Ten networks — has expressed interest in transmitting ABC and SBS services. It has hired Endeavour Consulting — which includes among its numbers former Nationals staffer Paul Chamberlin — to lobby Canberra. The interest comes as many of the 15-year metro contracts ABC and SBS entered into with Broadcast Australia in 2001 near completion.
To reduce costs, the government also wants ABC and SBS to start sharing spectrum. New transmission technologies, such as the compressed MPEG-4 method of transmission, could allow this to happen.
MPEG-4 allows twice as many channels to be broadcast on the same spectrum as the current dominant technology allows. It has yet to be mandated in Australia, and its usage is governed by the Australian Communications and Media Authority. If, a few months or years down the track, ABC and SBS do start sharing transmission spectrum, this could allow millions to be saved from the transmission bill.
Read Crikey‘s full analysis of these developments here.