Statement of Reasons for the Preliminary Decision to Make an Exemption Order for Telstra

STATEMENT OF REASONS FOR THE PRELIMINARY DECISION TO MAKE AN EXEMPTION ORDER FOR TELSTRA PAY TV PTY LTD IN RESPECT OF THE SUBSCRIPTION TELEVISION SERVICE EUROSPORT NEWS PROVIDED THROUGH MOBILE FOXTEL 1. PRELIMINARY DECISION

1.1 For the reasons set out below, the Australian Communications and Media Authority (ACMA) has made the preliminary decision to make an exemption order in relation to the subscription television sports service, Eurosport News, provided through Mobile Foxtel (the Service).

1.2 The order would exempt Telstra Pay TV Pty Ltd (the Applicant) from the requirement to ensure that a captioning service was provided for at least 20 per cent of the total number of hours of television programs transmitted on the Service in the financial year 1 July 2015 to 30 June 2016 (the Specified Eligible Period).

2. LEGISLATION

2.1 Subsection 130ZV(1) of the Broadcasting Services Act 1992 (the BSA) provides that a subscription television licensee that provides a subscription television service in a financial year must at least meet the annual captioning target for that financial year.

2.2 Subsection 130ZV(2) of the BSA outlines how the applicable percentage for the annual captioning target for the relevant financial year is calculated. The annual captioning target differs according to the subscription television service category and increases by five per cent each financial year until it reaches 100 per cent.

2.3 Paragraph 130ZY(1)(a) of the BSA provides that a subscription television licensee may apply to the ACMA for an order (an exemption order) that exempts from subsection 130ZV(1) of the BSA, a specified subscription television service provided by that licensee in a specified eligible period.

2.4 Subsection 130ZY(3) of the BSA provides that if an application under subsection 130ZY(1) of the BSA has been made for an exemption order, the ACMA must, after considering the application, by writing, either make the exemption order or refuse to make the exemption order.

1 | P a g e 2.5 Subsection 130ZY(4) of the BSA provides that the ACMA must not make the exemption order unless it is satisfied that a refusal to make the exemption order would impose an unjustifiable hardship on the applicant.

2.6 Subsection 130ZY(5) of the BSA specifies the matters the ACMA must have regard to in determining whether a failure to make the exemption order would impose an unjustifiable hardship on the applicant. A copy of these matters is at Attachment A.

2.7 Subsection 130ZY(6) of the BSA provides that, before making an exemption order under subsection 130ZY(3) of the BSA, the ACMA must:

a) within 50 days after receiving the application for an exemption order, publish on the ACMA’s website a notice:

(i) setting out the draft exemption order; and

(ii) inviting persons to make submissions to the ACMA about the draft exemption order within 30 days after the notice is published; and

b) consider any submissions received within the 30-day period mentioned in subparagraph 130ZY(6)(a)(ii) of the BSA.

3. BACKGROUND

3.1 On 30 March 2016, the Applicant submitted an application seeking an exemption order under paragraph 130ZY(1)(a) of the BSA in relation to the Service for the Specified Eligible Period (the Order).

3.2 The Applicant is a subscription television licensee. The Service is one of 34 channels provided by the Applicant known as ‘Mobile Foxtel’ (Mobile Foxtel). Mobile Foxtel is exclusively available to mobile customers of the Applicant’s parent company, Telstra Corporation Limited (Telstra).

3.3 Telstra has entered into a contractual arrangement with Foxtel Management Pty Limited (Foxtel), under which Foxtel supplies content to the Applicant for use on its Mobile Foxtel channels. The Applicant also retransmits free-to-air broadcast television services, the ‘AFL TV’ channel and the ‘Sportsfan’ channel as part of certain subscription packages (discussed below). Since at least 29 June 2015, Mobile Foxtel has been delivered to subscribers solely via a mobile application, ‘Mobile FOXTEL from Telstra’ (the Mobile Application), compatible with certain mobile devices.

3.4 The Applicant offers three subscription packages through Mobile Foxtel: the ‘Value Pack’ (16 channels), the ‘Ultimate Pack’ (30 channels) and the ‘Ultimate Pack + Plus Sport’ (34 channels). Telstra pre-paid and plan- based mobile customers may subscribe to Mobile Foxtel on either a weekly or monthly basis. The Service is offered by Telstra Pay TV as part of the ‘Ultimate Pack’ and the ‘Ultimate Pack + Sports’ subscription packages.

3.5 The Service provides live sports news and score updates from the major European sporting leagues. As a subscription television sports service, the annual captioning target for the Specified Eligible Period is 20 per cent. This means that the Applicant must ensure that a captioning service is provided for at least 20 per cent of the total number of hours of television programs transmitted on the Service during the Specified Eligible Period.

3.6 This is the fourth application by the Applicant for an exemption order under paragraph 130ZY(1)(a) of the BSA relating to the Service. The ACMA has already made three exemption orders for the Service. The first exemption order for the Service (ST/EO-68) was made on 13 March 2013 and covers the financial year 1 July 2012 to 30 June 2013. The second exemption order for the Service (ST/EO-125) was made on 12 March 2014 and covers the financial year 1 July 2013 to 30 June 2014. The third exemption order for the Service (ST/EO-200) was made on 12 March 2015 and covers the financial year 1 July 2014 to 30 June 2015.

4. EVIDENCE AND REASONS FOR PRELIMINARY DECISION

4.1 In making the preliminary decision to make the Order, the ACMA assessed firstly, whether a refusal and/or failure to make the Order would impose hardship on the Applicant and secondly, whether such hardship would be unjustifiable in light of the objects and purposes of the BSA. In making this assessment, the ACMA had regard to the matters specified in subsection 130ZY(5) of the BSA.

4.2 The ACMA has relied upon written representations and supporting evidence submitted by the Applicant in its application and in response to further enquiries. The ACMA has also relied upon written representations and supporting evidence submitted by the Applicant as part of previous exemption order applications for the Service, outlined in paragraph 3.6 above, as well as publicly available information. Information provided to the ACMA on a confidential basis has not been reproduced. Paragraph 130ZY(5)(a) of the BSA – the nature of the detriment likely to be suffered by the applicant 4.3 The Applicant submitted that, if the Order is not made by the ACMA, the detriment likely to be suffered by the Applicant would include significant brand damage and significant financial commitments. Significant brand damage 4.4 The Applicant submits that it has made genuine efforts and invested significant resources in a program to implement closed captioning capability for Mobile Foxtel. Details of the Applicant’s efforts to implement captioning capability are contained in paragraphs 4.34 to 4.41 below.

4.5 The Applicant submits that despite its genuine efforts, it encountered technical difficulties that prevented it from introducing captioning capability

3 | P a g e for Mobile Foxtel, including the Service. Details of the Applicant’s submissions relating to technical difficulties are contained in paragraphs 4.42 to 4.49 below.

4.6 The ACMA acknowledges the Applicant’s genuine efforts. However, the ACMA does not consider that ‘brand damage’ is, in itself, grounds for unjustifiable hardship. In exercising its functions, the ACMA is required to engage in a public consultation process and publish information on its website where relevant. This may necessitate the publication of information, the making of findings or the making of a decision which, although adverse to an Applicant’s reputation, is in the public interest. If an applicant wishes to benefit from the exemptions afforded by section 130ZY of the BSA, it would appear illogical to claim that the process by which the ACMA must reach its decision is in some way adverse to the applicant’s brand.

4.7 Furthermore, subsection 130ZY(10) of the BSA provides that if the ACMA decides to make an exemption order, it must publish a copy of the exemption order on its website. Paragraph 130ZY(9)(b) of the BSA provides that if the ACMA decides to refuse to make an exemption order, it must give written notice of its decision to the applicant. There is no requirement that the ACMA publish its decision to refuse an exemption order and the ACMA does not do this in practice. It is unclear from the Applicant’s submissions how it might suffer ‘brand damage’ when the ACMA’s final decision is only made public where an exemption order is granted. The Applicant has not provided any evidence to substantiate or clarify how it alleges that it is likely to suffer ‘brand damage’.

4.8 The ACMA is not satisfied, therefore, that a refusal and/or failure to make the Order would impose an unjustifiable hardship on the Applicant on the basis of detriment due to ‘brand damage’. Significant financial commitments 4.9 The Applicant submitted that, if the Order is not made by the ACMA, the detriment likely to be suffered by the Applicant would include significant financial commitments associated with implementing captioning capability for Mobile Foxtel during the Specified Eligible Period, including for the Service.

4.10 The Applicant previously submitted that the only potential technical solution to provide closed captioning capability during the Specified Eligible Period would be to create duplicate Mobile Foxtel channels, including for the Service. Duplicate channels would require the Applicant to stream two versions of each channel, one encoded with open captions and one without.

4.11 The Applicant previously submitted that providing duplicate channels would involve significant financial commitments which would be extremely cost prohibitive such that providing the Mobile Foxtel service would not be financially viable. The Applicant submits that Mobile Foxtel would, as a result, likely be discontinued as the cost of providing duplicate channels would be far greater than the annual profit generated from Mobile Foxtel.

4.12 The Applicant submits the following costs would be associated with duplicating Mobile Foxtel channels:

(a) initial start-up costs associated for duplicating Mobile Foxtel channels (including hardware, software licences, racking space and redundancy);

(b) running costs associated with duplicated programming for Mobile Foxtel channels;

(c) one-off cost to change the loop preparation process for 10 looped channels;

(d) costs to build, test and implement closed captions for live channels, including the Service;

(e) costs to build, test and implement closed captions for looped channels; and

(f) costs associated with the actual provision of closed captioning.

4.13 Under the current legislative framework, it is a priority that subscription television services be broadcast with captions where possible.1 However, if meeting the captioning obligation for a subscription television service would result in a subscription television licensee being unable to show the service, then the captioning obligation itself may be seen as an unjustifiable hardship.2

4.14 Based on the information provided, the ACMA is satisfied that the cost of duplicating Mobile Foxtel channels is likely to exceed the annual income earned from Mobile Foxtel, which in turn would likely result in Mobile Foxtel, including the Service, being discontinued. The ACMA is satisfied therefore that a refusal and/or failure to make the Order would impose an unjustifiable hardship on the Applicant, given the significant financial commitments associated with duplicating its Mobile Foxtel channels, including the Service, during the Specified Eligible Period (see paragraphs 4.9 to 4.12). Paragraph 130ZY(5)(b) of the BSA – the impact of making the exemption order on deaf or hearing impaired viewers, or potential viewers, of the subscription television service concerned;

1 See paragraph 63, Explanatory Memorandum to the Broadcasting Services Amendment (Improved Access to Television Services) Bill 2012, p.11

2 Ibid note 1

5 | P a g e 4.15 The Applicant submits that if the ACMA made the Order, it would have no impact on deaf or hearing impaired viewers as the Applicant has, to date, not provided any captioned content for Mobile Foxtel, including the Service.

4.16 The ACMA notes that if the Order were made, the Applicant would be exempt from meeting the annual captioning target for the Service for the Specified Eligible Period. It would also result in the Applicant being exempt from its captioning obligations for the Service for a four year period from 1 July 2012 to 30 June 2016 inclusive.

4.17 The ACMA considers that although no captioned content has been provided for the Service to date, it is still possible that deaf or hearing impaired viewers or potential viewers may have used, currently use or will use the Service. Deaf or hearing impaired viewers or potential viewers may, for example, have acquired a mobile service from Telstra and/or subscribed to Mobile Foxtel in reliance upon representations made in the Applicant’s previous exemption order that Mobile Foxtel would have captioning capability in FY2015 – 2016.3

4.18 The ACMA is not satisfied, therefore, that making the Order would not have a detrimental impact on deaf or hearing impaired viewers, or potential viewers, of Mobile Foxtel, including the Service. Paragraph 130ZY(5)(c) of the BSA – the number of people who subscribe to the subscription television service concerned; 4.19 The Applicant submitted information about the number of people that subscribe to Mobile Foxtel, including the Service, as well as average viewer numbers, on a commercial-in-confidence basis.

4.20 Based on the information provided, the ACMA is satisfied that, based on the number of subscribers, it would be a disproportionate administrative burden on the Applicant to meet its captioning obligations for the Service for the Specified Eligible Period. The ACMA is satisfied, therefore, that a refusal and/or failure to make the Order would impose an unjustifiable hardship on the Applicant.

Paragraph 130ZY(5)(d) of the BSA – the financial circumstances of the applicant 4.21 The Applicant has submitted information about its financial circumstances, including profit and loss statements, expenditure on closed captioning capability and estimated expenditure on closed captioning services, on a commercial-in-confidence basis.

4.22 The Applicant previously submitted that the additional cost of duplicating Mobile Foxtel channels and creating open captions, including for the Service, would render Mobile Foxtel commercially unviable. The Applicant submits that Mobile Foxtel would likely be discontinued as the cost of

3 See paragraph 4.6 and Attachment 2 of ST/EO-189 providing duplicated channels would be far greater than its annual profit from providing the service.

4.23 From its examination of the financial information provided by the Applicant on a commercial-in-confidence basis, the ACMA is satisfied that a refusal and/or failure to make the Order would impose financial costs that would make Mobile Foxtel commercially unviable and would likely result in Mobile Foxtel, including the Service, being discontinued. Paragraph 130ZY(5)(e) of the BSA – the estimated amount of expenditure that the applicant would be required to make if there was a failure to make the exemption order 4.24 The Applicant submits that, if there was a failure to make the Order, it would be required to make at least the following expenditure to implement captioning capability on its current video platform for Mobile Foxtel, Ooyala:

(a) costs to build, test and implement closed captions for live channels;

(b) costs to build, test and implement closed captions for looped channels;

(c) one-off cost to change the loop preparation process for 10 looped channels;

(d) costs to upgrade features of Ooyala to allow the Android mobile operating system to display captions without causing the Mobile Application to crash;

(e) costs to upgrade features of Ooyala to allow the iOS mobile operating system to display captions on the Mobile Application; and

(f) costs associated with the actual provision of closed captioning.

4.25 The Applicant submits that several costs are unknown until the above steps are implemented and that it would not be feasible to implement the above changes within the Specified Eligible Period.

4.26 The Applicant submits that, if there was a failure to make the Order, the only technical solution would be to duplicate Mobile Foxtel channels. The expenditure required to duplicate Mobile Foxtel channels is outlined in paragraph 4.12 above.

4.27 Based on the information provided, the ACMA is satisfied that the expenditure required by the Applicant if there was a failure to make the exemption order would impose hardship on the Applicant. Such hardship would be unjustifiable in light of technical difficulties and genuine efforts made by the Applicant to provide captioning capability for Mobile Foxtel, including the Service, during the Specified Eligible Period.

7 | P a g e Paragraph 130ZY(5)(f) of the BSA – the extent to which captioning services are provided by the applicant for television programs transmitted on subscription television services provided by the applicant 4.28 The Applicant submits that it is not currently streaming any captioned content on Mobile Foxtel, including the Service. A refusal and/or failure to make the Order would, therefore, result in the Applicant being required to meet its entire annual captioning target for the Service in the remainder of the Specified Eligible Period.

Paragraph 130ZY(5)(g) of the BSA – the likely impact of a failure to make the exemption order on the quantity and quality of television programs transmitted on subscription television services provided by the applicant 4.29 The Applicant submits that a failure to make the Order would have an impact on the commercial viability of Mobile Foxtel which would likely result in Mobile Foxtel, including the Service, being discontinued. This would result in the quantity of television programs transmitted on Mobile Foxtel, including the Service, being reduced to zero. The impact on the quality of television programs transmitted on Mobile Foxtel, including the Service, would therefore no longer be relevant.

4.30 The ACMA is satisfied that a refusal and/or failure to make the Order would impose an unjustifiable hardship on the Applicant on the basis that it would likely result in Mobile Foxtel being discontinued and therefore no television programs would be transmitted on the Service.

Paragraph 130ZY(5)(h) of the BSA – whether the applicant has applied, or has proposed to apply, for exemption orders or target reduction orders under this section in relation to any other subscription television services provided by the applicant; Exemption Order Applications 4.31 On 30 March 2016, the Applicant applied for exemption orders for 34 channels provided by the Applicant as part of Mobile Foxtel, including the Service. Each exemption order application is made for the Specified Eligible Period. Details are contained in the table below:

Channe Channel Channel Service Provider Annual Looped l No. Name Captionin / Live g Target service 1 ABC1 Australian Broadcasting 50% Live Corporation 2 SBS1 Special Broadcasting Service 50% Live 3 Sky News Australian News Channel Pty 20% Live Headlines Limited 4 Sky News Australian News Channel Pty 20% Live Business Limited 5 BBC World BBC World Distribution Ltd and 20% Live News BBC World (Australia) Pty Ltd 6 CNN Turner Broadcasting System Asia 20% Live Pacific, Inc. 7 Fox Sports Fox Sports Australia Pty Ltd 20% Live News TV 8 Cartoon Turner Broadcasting System Asia 60% Live Network Pacific, Inc. 9 National NGC Network (Australia) Pty 60% Live Geographic Limited Channel 10 Sky News Australian News Channel Pty 20% Live Weather Limited 11 MTV MTV Networks Australia Pty Ltd 60% Live 12 Nickelodeon Nickelodeon Australia 60% Live Mobile Management Pty Ltd 13 TV Hits TV1 General Entertainment 60% Looped Partnership 14 Discovery Discovery Asia, Inc. 60% Live Mobile 15 Channel [V] Foxtel 10% Looped 16 MAX Foxtel 10% Looped 17 Eurosport EUROSPORT Societe Anonyme 20% Live News 18 Disney The Walt Disney Company 60% Live Channel (Australia) Pty Ltd 19 Disney Junior The Walt Disney Company 60% Live (Australia) Pty Ltd 20 Nick Jr. Nickelodeon Australia 60% Live Management Pty Ltd 21 E! E! Entertainment Television, Inc. 60% Live Entertainment 22 FOX8 Foxtel 60% Looped 23 The Comedy Foxtel 60% Looped Channel 24 Channel [V] Foxtel 10% Live Hits 25 Nat Geo NGC Network (Australia) Pty 60% Live People Limited 26 Arena Foxtel 60% Looped 27 The LifeStyle Foxtel 60% Looped Channel 28 LifeStyle YOU Foxtel 60% Looped 29 A&E Foxtel 60% Looped 30 FX TV1 General Entertainment 60% Looped Partnership 31 AFL TV Chief Entertainment Australia 20% Live 32 SportsFan Chief Entertainment Australia 20% Live 33 Fox Sports Fox Sports Australia Pty Ltd 20% Live 34 Eurosport EUROSPORT Societe 20% Live

Foxtel Smooth 4.32 The Applicant also provides a subscription television music service, Foxtel Smooth, which is a 24-hour channel available via Foxtel satellite and cable services. From April 2016, the Applicant has provided Foxtel Smooth as part of Mobile Foxtel, replacing ‘Channel V’. The Applicant has not submitted an application for an exemption order relating to Foxtel Smooth.

Paragraph 130ZY(5)(i) of the BSA – such other matters (if any) as the ACMA considers relevant.

9 | P a g e 4.33 The ACMA considers that a number of other matters are relevant to the assessment of whether a refusal and/or failure to make the Order would impose an unjustifiable hardship on the Applicant.

Genuine efforts by the Applicant to implement captioning capability for Mobile Foxtel 4.34 The Applicant submits that it has made genuine efforts to implement closed captioning capability for Mobile Foxtel, including the Service, however it experienced technically difficulties that prevented it from implementing captioning capability for Mobile Foxtel, including for the Service.

2013 and 2014 exemption order applications 4.35 In 2013 and 2014, the Applicant submitted that it was not technically possible to provide closed captioning on the video platform it used to deliver Mobile Foxtel, including the Service, at that time. The Applicant submitted that, as part of its existing infrastructure at that time, there was no capacity to inject captioning into the video stream upon a customer’s request, without duplicating channels.

4.36 The Applicant submitted that at the time, it had undertaken scoping work, but it was not feasible to procure and implement a new video platform capable of delivering closed captioning within a timeframe that would allow the Applicant to meet its annual captioning targets in FY2012 – 2013 and FY2013 – 2014.

2015 exemption order application

4.37 In 2015, the Applicant submitted that it had committed funding to implement a new video platform for the delivery of Mobile Foxtel which intended to, among other things, enable the delivery of closed captions.

4.38 The Applicant submitted that Mobile Foxtel would not be transitioned to the new platform until February 2015 and that closed captioning capability would not be available until the first half of FY2015 – 2016.

4.39 As part of its exemption order application at that time, the Applicant provided an internal roadmap which provided a timetable for the implementation of the new Mobile Foxtel video platform and the delivery of closed captions on or about October 2015.4

2016 exemption order application

4.40 The Applicant submits that the timetable provided as part of the 2015 exemption order application was accurate to the best of its knowledge at the time of submission. However, the Applicant submits that it encountered technical difficulties and setbacks that caused this timetable to be delayed.

4 Ibid note 3 4.41 As part of the current exemption order application, the Applicant submitted a new timeline for implementing captioning capability. According to this timeline, the Applicant transitioned to its current video platform for Mobile Foxtel, Ooyala, in May 2015 and intended to deploy closed captioning in February 2016.

Technical issues with implementing captioning capability on the current platform 4.42 The Applicant submits that it encountered technical difficulties relating to its video platform for Mobile Foxtel, Ooyala, which prevented it from implementing captioning capability.

4.43 According to the Applicant, Ooyala is a video playback platform which can be used with at least two main mobile operating systems:

(a) iOS, the mobile operating system developed by Apple, Inc.; and

(b) Android, the mobile operating system developed by Google, Inc.

4.44 According to the Applicant, Ooyala is capable of accommodating closed captioning by encoding ‘WebVTT’. WebVTT is a separate data stream that can be encoded within a channel’s video stream and be used to display captioned text.

Problems with closed captioning displayed through Ooyala on Android devices

4.45 The Applicant submits that Ooyala is technically capable of providing WebVTT for the Android mobile operating system. However, Ooyala’s Android player was not considered fit for purpose as the Mobile Application would crash when channels with WebVTT were shown at the same time as channels without WebVTT. Consequently, closed captioning capability was only operational on the Mobile Application when all 34 Mobile Foxtel channels were simultaneously encoded with WebVTT.

4.46 The Applicant submits that it would be impractical for all Mobile Foxtel channels to be simultaneously encoded with WebVTT as some channels are ‘live’ and other channels are ‘looped’. Live channels are streamed directly from Foxtel, whereas looped channels are played on a continuous loop for approximately four to six hours. Looped channels are pre-edited by Foxtel as some programs have limited mobile rights and need to be edited from the live video stream. The Applicant submits that it would be impractical to show live and looped channels encoded with WebVTT at the same time for this reason. The Applicant also submits that a small number of channels have no captions at all.

4.47 The Applicant submits that Ooyala is investigating a solution to correct this technical issue and intends to release a new ‘software development kit’ in June or July 2016. The Applicant submits that a permanent fix for this

11 | P a g e technical issue has an unknown timeframe and would also require further financial investment and investigation from the Applicant.

Problems with closed captioning displayed through Ooyala on iOS devices

4.48 The Applicant submits that Ooyala is currently not technically capable of providing WebVTT through iOS mobile operating systems in Australia. The Applicant submits that Ooyala is investigating a solution to correct this technical issue and intends to release a new ‘software development kit’ in June or July 2016.

4.49 The Applicant submits that it has also investigated alternative technical solutions that would allow WebVTT to be displayed on iOS mobile devices:

(a) The Applicant submits that it has investigated whether a ‘native player’ solution for iOS could be provided, however does not consider that this solution would be achievable within the Specified Eligible Period. The Applicant also submits that a ‘native player’ solution is likely to create other technical issues with video playback and controls available in Ooyala.

(b) The Applicant submits that it had investigated whether ‘hardcoded closed captions’ could be used to provide captioning on iOS mobile devices. The Applicant submits, however, that under its current infrastructure ‘hardcoded closed captions’ would only allow six Mobile Foxtel channels to have captioning capability during the Specified Eligible Period. ACMA’s overall assessment of the Applicant’s submissions 4.50 Based on the information provided by the Applicant, the ACMA is satisfied that a refusal and/or failure to make the Order would impose an unjustifiable hardship on the Applicant for the following reasons:

(a) the Applicant has made genuine efforts to introduce closed captioning capability for Mobile Foxtel, including the Service, for the Specified Eligible Period;

(b) technical difficulties caused the Applicant to be unable to provide captioning capability for Mobile Foxtel, including the Service, for the Specified Eligible Period;

(c) the cost of duplicating Mobile Foxtel channels, including the Service, to facilitate the provision of captions is likely to exceed the Applicant’s annual income from Mobile Foxtel, which would likely result in Mobile Foxtel, including the Service, being discontinued; and

(d) based on the number of subscribers, the administrative burden of the Applicant providing captioning services for Mobile Foxtel, including the Service, would be disproportionate to the public benefit of it providing the Service. 5. PRELIMINARY DECISION

5.1 Following consideration of the matters outlined above, on 16 May 2016 the ACMA made the preliminary decision, under subsection 130ZY(6) of the BSA, to make the Order in respect of the Service, for the Specified Eligible Period.

13 | P a g e Attachment A

Relevant provisions of the BSA Part 9D of the BSA — Captioning Exemption orders and target reduction orders--unjustifiable hardship Criteria for making exemption order or target reduction order (4) The ACMA must not make the exemption order or target reduction order unless the ACMA is satisfied that a refusal to make the exemption order or target reduction order, as the case may be, would impose an unjustifiable hardship on the applicant. (5) In determining whether a failure to make the exemption order or target reduction order, as the case may be, would impose an unjustifiable hardship on the applicant, the ACMA must have regard to the following matters: (a) the nature of the detriment likely to be suffered by the applicant;

(b) the impact of making the exemption order or target reduction order, as the case may be, on deaf or hearing impaired viewers, or potential viewers, of the subscription television service concerned;

(c) the number of people who subscribe to the subscription television service concerned;

(d) the financial circumstances of the applicant;

(e) the estimated amount of expenditure that the applicant would be required to make if there was a failure to make the exemption order or target reduction order, as the case may be;

(f) the extent to which captioning services are provided by the applicant for television programs transmitted on subscription television services provided by the applicant;

(g) the likely impact of a failure to make the exemption order or target reduction order, as the case may be, on the quantity and quality of television programs transmitted on subscription television services provided by the applicant;

(h) whether the applicant has applied, or has proposed to apply, for exemption orders or target reduction orders under this section in relation to any other subscription television services provided by the applicant;

(i) such other matters (if any) as the ACMA considers relevant.