There’s no secret to understanding any debate about government media policy and regulation. It’s always about who wins, who loses and how to carve up the pie.

As we rake over the detritus of the debate, we come across an odd nugget that, at first sight, looks a bit like a genuine anachronism, like some sort of prehistoric insect trapped and preserved over time in the petrified amber of regulation’s flow, long after its rationale is gone.

Shortly before the budget, the federal government revealed its latest gift to the media owners in writing off television licence fees worth $130 million a year. Buried in the announcement were changes to an ownership rule known in shorthand as the “reach rule”, a little known residue of the Hawke government’s cross-media ownership reforms from more than 30 years ago.

The “reach rule” says a company cannot own more television stations than would allow it to broadcast to 75% of the Australian population. Before that rule, a company could own no more than two stations, however small or large the audience in their broadcast areas. It’s hard to believe now, but government, political parties and the broadcasting regulation specialist community (OK, I was part of it) spent over a year arguing over the correct percentage. Should it be 33%, 43% (then the size of Sydney and Melbourne combined) 60% or should there be no cap at all?

[Winners from the media package will need a lot more than handouts]

It seems a bit like a debate over how many angels can dance on the head of a pin, but it wasn’t. Not totally. It was about whether the Australian media should be genuinely local, or whether we should have national media with regional franchises. 

The 75% rule was eventually settled as part of the Keating-inspired cross-media rules in exchange for National Party votes in the Senate.

Why is it worth remembering this long forgotten moment of policy and politics?

For political junkies, it’s a reminder that there were times when the National Party would regularly break with the Liberals openly on the floor of the Parliament to advance the interests of their own constituency.

For media junkies, it’s a reminder of the regional monopolies that once dominated country towns. People like Macquarie Publication’s John Armati in Dubbo who built a print monopoly across regional New South Wales, aided by a valuable Coca-Cola franchise. Or the Mott family in Albury-Wodonga who only finally sold out to Fairfax in 2008. Or Edmund Rouse in Launceston who had perhaps the most spectacular end when he was jailed in 1989 for attempting to bribe a Labor MP (one of his former journalists) to cross the floor to support a Liberal state government in exchange for $110,000. They don’t make owners like that anymore!

Although it’s only 30 years ago, this was the last hurrah of regional media players. Up until the 1980s cross-ownership rules, these players built strong regional media monopolies across print, radio and television. Almost all of these are gone, now, and these regional monopolies have been broken into largely national media-specific monopolies.

Rural capital in the media has gone the way of most rural capital: absorbed into national pools in publicly listed companies, largely owned as part of passively invested superannuation capital with perhaps one or two major private shareholders.

For local audiences, the reach rule meant little. The 75% reach was matched with what was called “aggregation” — that is, in each state, formerly geographically restricted stations were permitted to broadcast across the state, giving almost all regional communities access to three commercial stations, just like in the cities.

[Voters don’t like media reform, whatever that is]

At the same time, ownership changes consolidated ownership of the Seven and Ten networks (Nine Sydney and Melbourne were already in common ownership) meaning that the independently owned stations in regional areas simply plugged into one of the three Sydney-Melbourne networks for programming, dropping their own ads and some limited local news into the schedule.

Once each network owned most of the relevant capital city stations they had the scale to dictate programming. And the regional broadcasters didn’t care, as long as they were clipping the ads on the way through.

So, yes, the process gave regional communities access to the same number of networks as city communities. In fact, networking meant it gave them access to more or less exactly the same television, programmed more or less at exactly the same time.

Abolishing this rule is likely to see the last of the remaining stations that sit outside the major networks absorbed by those networks. In that way, the remaining rural capital investors will, at least, clip some of the money that will wash through television in one last take-over frenzy.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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