While the government is rushing to distance itself from the Liberal Party’s now official policy that the ABC be privatised, the argument that it’s somehow impossible to do doesn’t stack up. Privatising the ABC doesn’t present particularly complex policy challenges.

Certainly, selling the ABC is a non-starter. It costs a billion dollars a year to run, plus digital and analog radio transmission and distribution costs. And while its high-end audience is the kind of demographic advertisers drool over, the existing free-to-air broadcasters would go feral at the idea of an entirely new national network rival for diminishing advertising dollars. So flogging it, even, as one Liberal delegate suggested, to a media mogul is a non-starter.

But there are other forms of privatisation: the functions of the ABC could be easily outsourced to the private sector via a Request for Tender. The process would start with a scoping study for which parts of the ABC would generate the most competitive tension and those — such as regional news and current affairs — where there would likely be little interest at prices comparable to existing ABC services. It would also need to tease out which parts of the ABC charter would be retained and which would be dispensed with. It could consider alternative approaches. One would be to treat the ABC’s functions as a form of Universal Service Obligation, with existing media companies paid taxpayer money to provide certain ABC-type services via their existing platform. This would have the appeal of enabling the government to hand generous amounts of money to the free-to-air broadcasters, but would lack a specific national broadcaster identity, making it less politically palatable. 

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Then the process would move to a Request For Information where potential suppliers would be invited to advise on what capacities they could offer for providing ABC services and what kind of tender structure would maximise the possibility of their participation. At that point, a Request for Tender would be developed, possibly along the lines of:

  • a national television service; 
  • a metropolitan local radio service and a national radio service (some combination of Radio National and News Radio, with Classic FM and Triple J seen as dispensable); and
  • a news and current affairs service across radio and television that would provide content to the broadcasting platforms on a commercial basis, with its own online presence.

A regional/rural local radio network would probably be omitted — as the Liberals did in their privatisation policy — because the high costs of rural news coverage and transmission make it unlikely that any private provider could provide services at a lower cost than the existing, sunk-cost ABC service.

For other services, however, the RFT would be to ascertain if private sector providers could provide them at a lower cost than the ABC, what content they would provide to meet the ABC’s charter requirements, and under what conditions. Transmission and distribution costs would have to be excluded as the ABC has long-term contracts with Broadcast Australia, which would have to be migrated to the winners. A sole provider could tender for all services, or different bidders could tender for different parts. So, Macquarie Media could bid for the metropolitan and national radio services; the Nine Network could bid for the national television service and Sky News could bid for the news and current affairs service, or News Corp could bid for all of the operations, reflecting the Murdochs’ current platforms across television, radio and online and possible economies of scale.

Such a process was undertaken by the Howard government in 2000 when it decided to re-establish an Asia-Pacific television service, although that was a simpler operation than a multi-media service with extensive terrestrial transmission requirements. Ironically, the Howard government decided it didn’t like what was on offer from the private sector and asked the ABC to bid. Of course, the government could let the ABC itself participate in the RFT process to outsource the ABC, forcing it to provide a baseline cost of its services and providing a rationale to further cut the ABC budget if it “won” the tender.

Such a process, with an appropriate probity advisor, could probably be completed within twelve months, depending on the length of the initial scoping study, and likely require several million dollars between staff, consultant and probity adviser costs. An outsourced ABC could start in 2020-21 if the government got going now.

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Peter Fray
Peter Fray
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