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1990—91—92

THE PARLIAMENT OF THE CObNONWEALTR

OF AUSTRALIA

SENATE

BROADCASTING SBRVICBS BILL 1992

EXPLANATORY MEMORANDUM

(Circulated by the authority of the Minister for Transport and Communications, Senator the Hon. Bob Collins)

334~I Cat. No. 92 4521 x —2

BROADCASTING SERVICES BILL 1992 OUTLINE

During the 1987 Federal election campaign, the Government gave a commitment to reform the Broadcasting Act 1942. Since 1983 there have been at least 20 substantial amendments to the Broadcasting Act resulting in a complicated Act. These amendments have mostly been ad hoc in nature in that they were responses to emerging circumstances rather than anticipating and providing for trends in the provision of broadcasting-type services; the amendments also further complicated the Act and increased the potential for legal loopholes to be exploited. Regulatory uncertainty has been cited by the broadcasting industry as inhibiting its restructuring and further undermining already shaken investor confidence. This Bill implements the Government’s decisions on reforms to the broadcasting regulatory regime to establish general rules for the industry which are clear, stable and predictable; to establish minimum requirements expected of industry participants; to introduce flexibility into the regime to enable responsiveness to changing circumstances; to monitor outcomes and trends against policy objectives; and to provide a range of redressive measures to the regulatory authority to deal with breaches or adverse trends. The Bill has been drafted to meet the changing nature of broadcasting that is occurring world-wide. The trend is to an increasingly diverse range of services that address many community needs and are delivered by an expanding range of technological options. Although ‘broadcasting’ services remain important, specialised services serving narrower (‘niche’) markets are becoming more common. This trend is evidenced by the positive reaction to the initiative announced in mid-1991 by the then Minister for Transport and Communications, the Hon Kim Beazley NP, to permit subscription audio services to homes. Already, foreign language services to meet specific community groups’ needs have commenced and it is expected that more will emerge in the future.

The Broadcasting Services Bill 1992 - provides a simple regulatory regime for broadcasting services that applies irrespective of the technical means of delivery; creates a new regulatory authority, the Australian Broadcasting Authority (the ABA) —3—

— the ABA will absorb the ABT and some of the current broadcasting planning areas in the Department of Transport and Communications; provides for a broadcasting planning process which is public, where social, economic and technical factors are all brought to bear; establishes a streamlined licence allocation and renewal process by:

— providing for a range of service—based licence categories to clearly differentiate between different services;

— applying. ,different levels of regulatory control to the range of categories according to the degree of influence that different categories of service are able to exert in shaping community views in Australia;

— providing for “class licences” for non—mainstream broadcasting service categories, so that such services will not require individual licensing class licences are standing authorisations for anyone to provide a broadcasting service subject to their complying with the conditions of the relevant class licences;

these class licences will accommodate the VABIS regime which is largely self-regulated, and which currently operates under the authority of MDS and NAB licences granted by the Minister under the fladiocommunications Act 1983, or equivalent authority under the Telecommunications Act 1991, depending on the delivery technology used. Class licences will also cover most of the services which currently may be provided under the limited licence regime under the Broadcasting Act; retaining individual licensing for commercial radio and commercial and subscription television broadcasting services, and for community broadcasting services (formerly known as “public” broadcasting services);

— introducing price-based competitive allocation for new commercial broadcasting services using the parts of the radio frequency spectrum designated by the Minister, and planned by the ABA, for the primary purpose of broadcasting services; —4

— providing for automatic licence renewal for commercial and community broadcasting services, with investigations or hearings by the ABA only in cases where the ABA has some doubt as to the suitability of the licensee, but with the ABA monitoring the licence on an ongoing basis;

— providing for a “suitability” test only for persons providing commercial, subscription television, or community broadcasting services; provides, in relation to commercial broadcasting services, an ownership and control (O&C) regime which:

— emphasises “control” more than “ownership” thereby concenjrating on the person who “pulls the strings” “o4nership” of company is merely one way of ganing “control”; 4

— is based on the “licence area” of a licence;

— retains the 20% foreign ownership limit for commercial television broadcasting services;

- increases the television audience reach limit from 60% to 75%;

— maintains the current limits on the number of commercial television broadcasting licences a person may control in a licence area;

— changes the limits on the number of commercial radio licences a person may control in any one licence area from one to two, with equivalent limits on directorships;

- maintains the current limitations on the number of directorships a person may hold in companies in a position to exercise control over commercial television broadcasting licences;

— maintains the current cross—media limits on control and on directorships as between different commercial broadcasting services, and between those services and newspapers;

- allows the ABA to approve temporary breaches of the O&C regime where the main purpose of the relevant transaction is not to take over a licence;

- requires licensees to notify the ABA of details of the persons who are in a position to exercise —5—

control of the licence, and of changes in control of the licence;

— provides for the ABA to give opinions on whether a person is in a position to exercise control of a commercial broadcasting licence, a newspaper or a company; and

— provides mechanisms, in Schedule 1, for tracing ownership through “company interests” (defined in clause 6) and determining control; provides for price—based competitive allocation of “satellite subscription television broadcasting 1 icences”

— a “satellite subscription television broadcasting licence” consists of a licence to provide, before 1 July 1997, a subscription television broadcasting service by means of a “subscription t~levision satellite”, ie. a satellite operated by AUSSAT Pty Ltd under its general telecommunicatipns carrier licence (AUSSAT is a subsidiary of OPTTJS Communications Limited, the competitor to the Australian and Overseas Telecommunications Corporation). It will be an offence to provide such a subscription service before that time except in accordance with a licence allocated by the ABA under Part 7; it will also be an offence to provide such a subscription service by use of a satellite other than a subscription television satellite; there will be a four-transponder satellite subscription television broadcasting licence and at least 2 other single-transponder satellite subscription television broadcasting licences. The four-transponder licence is to be allocated first; at least 2 single-transponder licences will be made available for allocation one year after the allocation of the four-transponder licence;

— satellite subscription television broadcasting O&C limits are imposed, in relation to the four— transponder licence, on: persons who control a “large circulation newspaper”; persons who control commercial television broadcasting licences; the national broadcasters; and persons who control a “telecommunications carrier” (defined in subclause 6(1) as the holder of a general telecommunications or public mobile licence under Part S of the Telecommunications Act 1991, currently AOTC and OPTUS subsidiaries, AUSSAT and Mobilcom (Australia) fly Limited)). Foreign ownership limits are imposed on subscription television broadcasting generally. —6

Ownership is to be traced through “company interests” which is defined in subclause 6(1) Aggregate ownership limits are also imposed;

provides for the ABA to determine program standards to apply to commercial and community broadcasting services; provides for the ABA to supervise the development of “codes of practice”, by groups representing the providers of the different categories of broadcasting services, to be observed in the conduct of the broadcasting operations of those sections of the broadcasting industry

— the ABA is to monitor the operation of these codes, and where it considers that appropriate community safeguards are not being provided by any code, it may make a program standard; and sets up a tiered mechanism for dealing with complaints by members of the public about broadcasting services and their compliance with program standards and codes of practice. Complaints are first to be addressed by broadcasting industry bodies and should only be referred to the ABA if a satisfactory outcome is not achieved. However, complaints regarding alleged breach of the Act or program standards may be directly referred to the ABA; provides for the ABA to hear complaints from members of the public relating to the broadcasting services provided by the ABC and SBS if they have failed to satisfactorily resolve a complaint

- the enabling legislation of the national broadcasters is to be amended to require the ABC and 585 to develop codes of practice relating to programming matters;

- the ABA will only investigate complaints if they are relevant to a code of practice and are not frivolous or vexatious.

FINANCIAL IMPACT Full funding implications cannot be assessed until decisions are made on licence fees for commercial broadcasting services, and on the detail for the price-based competitive licence allocation processes. Staff savings, in both the ABT and those parts of the Department of Transport and Communications which are to be merged into the new ABA, can be anticipated but these may be offset by having to employ specialist skills as the need arises. Savings will accrue —7— to the broadcasting industry from reduction in reporting requirements, and in the costs arising from regulatory intervention. Greater competition and a wider range of broadcasting services will improve the efficiency of the broadcasting industry. Facilitating the emergence of new broadcasting and other communications technologies, together with the anticipated increase in the range of services available, are expected to generate considerable economic activity relating to the supply of equipment and programs for broadcasting services.

ABBREVIATIONS The following abbreviations are used in this Explanatory Memorandum: ABA: the Australian Broadcasting Authority to be established under clause 152 of the Bill ABC: the Australian Broadcasting Corporation established under the Australian Broadcasting Corporation Act 1983 ABT: the Australian Broadcasting Tribunal established under the 1942 Act AOTC: the Australian and Overseas Telecommunications Corporation Limited referred to in section 3 of the Australian and Overseas Telecommunications Cornoration Act 1991 AtYSTEL: the Australian Telecommunications Authority referred to in section 34 of the Telecommunications Act 1991

BRACS: Broadcasting to Remote Aboriginal Communities Scheme LBL: limited broadcasting licence as provided for under Division 1 of Part IIIB of the 1942 Act MDS: multipoint distribution station services licensed under the Radcom Act NAS: narrowband area station services licensed under the Radoom Act O&C provisions: those provisions of the Bill or the 1942 Act, as the case may be, relating to ownership and control of broadcasting —8—

service licences or broadcasting licences, whichever is relevant, including those provisions relating to rules on cross media interests RTP: retransmission permit granted under Division 2 of Part IIIB of the 1942 Act 585: the Special Broadcasting Service Corporation referred to in section 5 of the Special Broadcasting Service Act 1991 the Bill: the Broadcasting Services Bill 1992 the 1942 Act: the Broadcasting Act 1942 the Radcom Act: the Radiocommunications Act 1983 the Spectrum Plan: the Radiocommunications—Australian Spectrum Plan made under section 18 of the Radcom Act the TPA: the Trade Practices Act 1974 the TPC: the Trade Practices Commission Transitional Bill: the Broadcasting Services (Transitional Provisions and Consequential Amendments) Bill 1992 VAEIS: Video and Audio Entertainment and Information Services provided under the Radcom Act, or in accordance with the Telecommunications Act

NOTES ON CLAUSES

fliT 1 - PRELIMINARY

clause 1. — Short title Allows for the citation of the Broadcasting Services Act 1992.

Clause 2 - Conencement Clause 2(1) declares that the Act is to commence on a day to be fixed by Proclamation. —9

Clause 2(2) is a standard provision providing for automatic commencement of the Act within six months of the Act receiving the Royal Assent if it has not commenced sooner by Proclamation under subclause (1).

Clause 3 - Objects of this Act This clause sets out the objects of the Act. The purpose of these objects is to set out clearly the outcomes Parliament wishes to see in the regttlation of broadcasting, to assist with the formulation of decisions consistent with the policy enshrined in the Act, and to guide the ongoing administration and enforcement of the Act. It is important to note that the objects are not set out in any particular order of priority; in other words the relative importance of an object may be determined by the issue being considered at the time - that relative importance could vary from time to time. It is recognised that there are tensions between the objects. It is intended that the ABA, in the exercise of its regulatory powers, should have regard to the competing objectives, drawing on its ability to assess community views and needs, and to monitor developments in the broadcasting industry. It is expected that the relative importance of each object may vary over time, and vary in relation to different functions and powers of the ABA.

Clause 3(a) relates to the intention that the Act will encourage and facilitate the provision of both ‘free—to—air’ broadcasting services as well as subscription and ‘niche’ broadcasting services to allow a broad range of general and special interests and needs to be met. Diversity in the range of services is encouraged by a more open planning regime that is expected to increase the availability of services, and by a licensing regime which is designed to accelerate the introduction of services and encourage the emergence of the new ‘niche’ services. Clause 3(b) Of particular relevance to this object are the flexibility of the planning and licensing schemes, the simplified and less interventionist reporting requirements imposed on licensees, licence allocation and renewal arrangements, and the mechanisms to develop standards and codes of practice that have regard to prevailing community standards on the program content of broadcasting services. Clause 3(c) restates the objective, implicit in the 1942 Act, that diversity of control be encouraged for the more influential broadcasting services (initially commercial television and radio, and satellite subscription television broadcasting services). Diversity in control is to be promoted by allowing a greater number of services (subject, — 10 —

in relation to commercial television, to a review to be completed by 1 July 1997 - refer to clauses 28 and 213) under the planning and licensing regimes, supported by the O&C limits in Part 5 relating to commercial broadcasting, and in Divisions 3 and 4 of Part 7 relating to satellite subscription television broadcasting. Concentration in ownership and control of narrowcast services is to be regulated by the relevant provisions of the TPA and foreign interests in such services will be regulated under the Foreign Accuisitions and Takeovers Act 1915. It should be noted, that the limits on control of commercial radio licences have been relaxed (refer to clauses 54 and 56). Clause 3(d) maintains the clear objective, implicit in the 1942 Act, that Australians should have effective control of the more influential broadcasting services. The meaning of “control” is defined in subclause 6(1) and further explained in Schedule 1 to the Act. Clause 3(e) recognises that broadcasting can play an important role in shaping Australia’s collective views, values and culture. The reference to “cultural diversity” is consistent with the Commonwealth’s multi—cultural agenda. This object is reflected in those provisions in the Act relating to foreign ownership limits of certain types of broadcasting services, to the continuation of program standards specifying minimum levels of Australian content, and to the anti-siphoning rules applying to subscription television broadcasting services. Clause 3(f) is based on the expectation that the emergence of ‘niche’ broadcasting services and the development of a more competitive environment should result in high quality and innovative programming if broadcasting service providers, particularly of subscription services, are to attract and retain audience interest. This object will be supported by the determination of program standards by the ABA and the development of codes of practice by groups representing different sectors of the broadcasting industry. Clause 3(a) The reference in this object to “a fair and accurate coverage of matters of public interest” recognises that for most people, broadcasting is a major source of information on issues and events in the world. It is intended that, in the reporting of events and the presentation of issues, providers of broadcasting services will report the facts and facilitate the presentation of the range of views on any particular issue. This does not mean, however, that broadcasters will be required to give equal time to every view on any particular subject. The reference — 11 — to “local” means the area in which any particular broadcasting service is provided; Clause 3(h) “(R)espect for community standards” is to be encouraged by way of program standards determined by the ABA under clause 120 or 123, by codes of practice developed under clause 121 by groups representing licensees of the various categories of broadcasting services, or by licence conditions for some licence categories. These standards and codes will be under-pinned by research conducted by the ABA on community standards as to program content; Clause 3(i) is the guiding philosophy for a new and responsive approach for addressing complaints about broadcasting services, where greater onus is placed on broadcasters themselves to be responsive to complaints. Complaints handling procedures will be set out in codes of practice developed under Part 9 where, in the first instance, responsibility rests with the industry except where the complaint relates to an alleged breach of the Act or program standards. Failure to observe codes can result in the imposition of licence conditions or program standards. A range of effective remedies is provided to deal with complaints and breaches. Part 11 of the Act sets out the procedures for complaints to the ABA about broadcasting services as a ‘safety net’ where aggrieved parties are not satisfied by industry responses or the complaints concern breaches of the Act or licence conditions. Of particular significance are the amendments (consequential to this Act) to the Australian Broadcasting Corporation Act 1983 and the Special Broadcasting Service Act 1991 requiring the ABC and SBS respectively to develop codes of practice consistent with their Charters and notify the ABA of those codes - Division 2 of Part 11 also provides for complaints to be made to the ABA regarding breaches by the national broadcasters of their codes of practice.

Clause 4 - Regulatory policy This clause builds on the objects of the Act by enunciating the underlying philosophy to be pursued in the administration of the Act. Clause 4(1) The level of regulation to be applied to any particular type of broadcasting service is to be determined according to the degree of influence that that type is able to exert in shaping community views in Australia. Thus a high level of regulation is to apply to commercial broadcasting services as those services are considered to exert a strong influence in shaping views in Australia. At the other end of the scale, narrowcast broadcasting services — 12 — are expected to play a minor role in shaping views in Australia and will be subject to low barriers to entry. Different levels of regulation are also provided for television services and radio services. This subclause is particularly important in the application of the service licensing regime, program standards and limits on control of broadcasting. Clause 4(2) declares Parliament’s intention that the regulation of broadcasting services in Australia be flexible. Paragraph Thj specifies that this flexibility should aim for an appropriate balance between catering for public interest considerations, and imposing financial and administrative burdens on broadcasting service licensees; eg. because the suitability of a licensee should be considered only where there are real grounds for concern, or full hearings of the ABA should only be conducted where that is the most appropriate way of dealiog with a particular matter, financial and adninistrative burdens are minimised; on the other hand, broadcasters have to accept more responsibility for codes of practice. Also, licence conditions should only be imposed if this is the most effective means of ensuring that public interest considerations are met, when financial costs are considered. Paragraphs jkj and jgj aim for the accommodation of technological change (particularly in the provision and reception of broadcasting services) without the need for regular amendment of the Act, wherever possible. This paragraph recognises that in recent years there has been an acceleration in the development of technologies for delivering communications services. It is intended, as much as the regime set out in the Act will allow, that as those technologies come on-stream for general application, they be accommodated within the regulatory regime provided in the Act without the need for patch-up amendments as has been the case with the 1942 Act.

Clause $ - Role of the ABA This clause complements clause 4 in that it sets out the role of the ABA intended by Parliament for the achievement of the objects of the Act, and the administration of the regulatory regime provided by the Act. It promotes the ABA’s role as an oversighting body akin to the TPC rather than as an interventionist agency hampered by rigid, detailed statutory procedures, and formalities and legalism as has been the experience with the ABT. It is intended that the ABA monitor the broadcasting industry’s performance against clear, established rules, intervene only when it has — 13 — real cause for concern, and has effective redressive powers to act to correct breaches. Clause 5(1) (a) requires the ABA to monitor the broadcasting industry. This monitoring would cover the industry’s compliance with the provisions of the Act, program standards and codes of practice. It would also cover trends in the industry as a whole and in individual sectors. The ABA is expected to take into account its industry-wide knowledge, subject to the provisions of the Act.

Clause 5(1) (b) is intended to enable the ABA to determine the most effective manner of exercising its range of powers and functions so that: jjj the rules relating to broadcasting services are clear and stable; (ii) effective sanctions are invoked for breaches of those rules; and (iii) a balance is stuck between the broadcasting needs of the Australian community and the interests of broadcasting service providers. Clause 5(2) requires that any sanction invoked for a breach of the Act be proportionate to the seriousness of the breach. This clause operates in conjunction with the requirement in clause 166 that the ABA use its information gathering powers in the quickest and most economical manner in the circumstances, and refrain fron undertaking costly procedures on minor matters. But, the ABA is encouraged to apply the full force of its powers for serious offences.

clause 6 - Interpretation Clause 6(1) defines terms used in the Act. The definitions of many of these terms are self—explanatory. “Associate” is a term used in relation to the 0&C provisions in Part 5 and Schedule 1 to the Act. This term has a very broad definition and is intended to cover persons who, in a business sense, act in concert. Provision is made for exclusion from the ambit of this term of persons who do not act together or do not actually exercise control in relation to a company, licence or newspaper, or persons whose only association is their mutual participation in a satellite subscription television broadcasting venture. This definition draws heavily on the Corporations Law and legislation relating to taxation, and foreign acquisitions and takeovers.

“Australian drama program” is a term used in relation to the Australian content condition imposed on satellite subscription television broadcasting licences under clause 101 (“drama program” is also defined in subclause 6(1)). the definition relates to the object in paragraph 3 (e) — 14 — which is the promotion and development of a sense of Australian identity, character and cultural diversity. The purpose of the definition is to ensure that the 10% of program expenditure to be spent on Australian drama programs is spent wholly or substantially in Australia, and that those programs have significant Australian content (paragraph Ja!). This criterion is expected to encourage a growth in opportunities and employment for the Australian drama production industry. Paragraphs Jfl. and jçj are expected to encourage licens 5 to join together with foreign venture partners to produce programs for overseas markets as well as the domestic market, thus reducing costs. This could have a potential multiplier effect of up to 3 times more direct expenditure on Australian drama if the licensee participates in or contributes part funding to program.

Any film which qualifies for the tax concessions provided for by Division 1OBA of Part III of the Income Tax Assessment Act 1116 comes within the ambit of this definition, as does any program made under an agreement (which could relate to co-productions) between Australia and another country (paragraphs jfl and jnL, and Ic! respectively). For the sake of clarity, this clause makes it explicit that any program which meets an Australian content program standard applying to commercial broadcasters, will also qualify under this definition (paragraph jfj).

This definition does not include a program that the ABA has declared under subclause 6(3) not to be an Australian drama program.

The definition of “broadcasting service” is fundamental to the Act as it establishes the types of services which are to be regulated under the Act. A “broadcasting service” is a service: that delivers television programs or radio programs

- (“program” is defined in subclause 6(1)); to persons having equiprneht appropriate for receiving that service

- meaning that the receiver is by virtue of its design and technical characteristics capable of receiving the service, or the service provider has the technical capacity, by remoti operation, to enable

the receiver to receive the service; - — 15 —

whether the delivery uses the radio frequency spectrum, cable, optical fibre, satellite or any other means, or a combination of those means

— so the delivery may be by transmission on the radio frequency spectrum (including via satellite), or by a line as defined in the Telecommunications Act, or by a combination of radio frequency transmissions and a line, or by some other means. A “broadcasting service” does not include; Jfl a service (including a teletext service) that provides no more than data, or no more than text (with or without associated still images)

- it is not intended that the Act should cover teletext-type services, even where those services may include some form of graphics such as maps, tables or diagrams. It is also not intended that the Act should cover services which essentially amount to ‘electronic publishing’, that is, where nothing but written text such as books, or news reports or stories are displayed on a television screen or some other electronic visual display unit; or

1k! a service that makes programs available on demand on a point-to-point basis, including a dial-up service

- if each time a person receives or accesses a service, the person receives programs which are being provided according to timetabling determined by the service provider, so that the program being received by the person is the same as that being received by any other person receiving the service at the same time, then the service is not a ‘point- to—point’ service. If the person were to receive a program from a service provider upon request, such that it is not necessarily the case that another person who is receiving or accessing the service at the same time is receiving the same program or the same stage of the program, the service is a ‘point— to—point’ service. “Point—to—point” services, are to be taken as including ‘dial—up’ services. Examples of ‘dial-up’ services are: (i) the AOTC time and weather services which can only be accessed by dialling-up through a public telecommunications network; and (ii) a ‘video-on—demand’ service whereby a service provider transmits a video upon request to a person who has communicated that request to the service provider by dial-up through a — 16 —

public telecommunications network, or by some other means; or jgj a service, or a class of services, that the Minister determines, by notice in the Gazette, not to fall within this definition

- this recognises that it is not possible to anticipate technological developments or every proposal which may arise in the future for different types of oommunications services. It is intended that the Minister should have the flexibility to decide in such situations, that a proposed service is not to be considered a ‘broadcasting service’ and therefore not subject to the regulatory regime established by the Act. This flexibility will make it easier for the Minister to maintain the boundaries between the regime under this Act and the regimes administered by AUSTEL under the Telecommunications Act and the Minister under the Radcom Act (or its equivalent) as they relate to the provision of services. Determinations made under this paragraph are subject to parliamentary oversight under subclause 6(2) which makes them disallowable instruments. Re—transmission of services is provided for in clause 211.

In relation to the definition of “broadcasting services bands”, the “designation” referred to means the allocation in the Spectrum Plan of radiofreguency bands to broadcasting services on a primary basis. The reference to “assigned” does not suggest that some form of property right to these bands is to be given to the ABA, rather it refers to those bands in relation to which the Minister has given to the ABA the primary planning and management role.

A ten used in the O&C provisions in Part 5, Divisions 3 and 4 of Part 7 and schedule 1 is “company interests”. This term has been given a wide meaning to encompass all known types of interest in order to eliminate the chances of avoidance of the O&C provisions. Where this term is used in relation to a person who has a shareholding interest, a voting interest, a dividend interest, or a winding-up interest in a company, it means the percentage that interest represents of the total of the relevant type of interest in the company. Where the person has 2 or more of those interests, it means whichever of the interests has the greater or greatest percentage. The different types of interest are explained in clause B. These types of interest are relevant to the O&C and cross media limits which apply — 17 — to satellite subscription television broadcasting licences allocated under Part 7 of the Act. “Control” is a term fundamental to the operation of the O&C provisions of the Act. It is intended that it have a very broad meaning, covering a wide range of formal and informal arrangements whereby a person becomes in a position to exercise control over a broadcasting service licence, a company or a newspaper. This term maintains the meaning of ‘control’ as used in the 1942 Act. schedule i contains a general explanation of the factors which may be relevant to considering control, and sets out rules for deciding who is in a position to exercise control of a licence, company or newspaper. Part 4 of schedule i describes a method for tracing company interests.

“Licence area” is used in relation to commercial radio and commercial television broadcasting licences, and community broadcasting licences, and replaces the term “service area” as used in the 1942 Act. Licence areas are particularly relevant to the O&C rules in the Act, and to the technical planning guidelines to be developed by the ABA under clause 33 which are expected to set limits designed to minimise the reception of a service outside its licence area. service areas of services operating under the 1942 Act at the commencement of this Act will be converted into licence areas for the purposes of this Act.

The meaning of “newspaper” excludes local free issue community newspapers and non-English language newspapers from its ambit.

“Program”, a term which is also fundamental to determining whether a service comes within the regulatory regime established by the Act, is defined in relation to a broadcasting service as meaning:

ía! matter the primary purpose of which is one or more of: to entertain

— entertain is used here in its broadest sense. It is recognised that what is entertaining to one person may not be so for another person; or

kill to educate - 18 —

- without limiting the generality of the phrase “to educate”, it is expected that some broadcasting services will be provided for the purpose of providing courses of instruction; or (iii) to inform an audience

- it is not intended that the Act should regulate the internal communications of a business, government agency, or an emergency or other organisation, for the purposes of the operations of the business, agency or organisation, however those communications may be effected. Where there is some doubt as to whether a proposed service comes within the ambit of the Act, and the Minister considers it more appropriate that such a service be regulated under the Radcom Act or the Telecommunications Act only, and not under this Act, the Minister may make a determination under paragraph (d) of the definition of “broadcasting service” to the effect that such a service does not fall within that definition and hence is not covered by this Act; or Jfl advertising or sponsorship matter, whether or not of a commercial kind. “Subscrintion fee” includes any form of consideration for the supply of a subscription broadcasting or subscription narrowcasting service. This would also include coupons and similar arrangements. Clause 6(21 subjects a determination made by the Minister under paragraph (d) of the definition of “broadcasting service” to parliamentary oversight by making it a disallowable instrument. Clause 6(3) enables the ABA to declare that a program does not come within the ambit of the term “Australian drama program” (defined in subclause 6(1), where the ABA is satisfied that the program has so significant a level of non—Australian content that the program should not come within that term. This clause relates to the Australian content condition imposed on satellite subscription television licences under clause 101.

clause 7 - Interpretation-aeaning of control — 19 —

Refers the reader of the Act to Schedule 1 which sets out mechanisms for determining questions of control in a licence, company or newspaper, and for tracing company interests.

Clause a — Interpretation-shareholding interests, voting interests, dividend interests and winding—up interests This clause explains what constitutes shareholding interests, voting interests, dividend interests and winding— up interests in a company, for the purposes of the O&C provisions. This casts a wide net and is intended to catch recognised ways of owning interests in a company that can put a person in a position to exercise control.

Clause 9 - Act to bind the crown Declares that the Act binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory, and of the Northern Territory. Previously, the Crown was not bound under the 1942 Act. With the increase in the number of broadcasting-type services being provided by Commonwealth, State and Territory agencies, it was considered appropriate that they be subject to the same regulatory regime as applies to non—government providers of broadcasting services. Clause 13 defines “national broadcasting services” with -the effect that this Act applies to the ABC or the SBS only where they engage in the provision of subscription broadcasting or subscription narrowcasting services, and in relation to complaints about alleged breaches of their respective codes of practice — otherwise, this Act does not apply to the ABC or SBS. The Act also does not apply to broadcasts of the proceedings of Parliament provided under the Parliamentary Proceedings Broadcastina Act 1946 (refer to clause 13). It should be noted that the Act does not bind the Crown in right of Norfolk Island where the local legislature has power to make laws with respect to broadcasting. This clause further provides that notwithstanding such binding of the Crown, nothing in the Act renders the Crown liable to be prosecuted for an offence.

Clause 10 - Extension of Act to the external Territories Extends the Act to all of Australia’s external Territories.

PART 2 - CATEGORIES OF BROADCASTING SERVICES — 20 —

This Part is fundamental to the Act in that it defines the various broadcasting service categories regulated by the Act. It lays down criteria for determining into which licence category individual services fall, and hence the degree of regulatory oversight to be applied. The Part also allows for the ABA to make determinations to refine the service categories further and distinguish between the categories, and enables the ABA to give opinions as to which category a proposed broadcasting service falls into. A range of further matters to be considered is set out in clause 22 to assist the ABA to determine the appropriate licensing category for a service if there is any uncertainty or dispute. It is intended that different levels of regulation be applied to the services in each category depending on their potential to influence community views. It is also intended that such regulation reflect the greater potency of television services in this regard when compared with radio services. As with all Parts of the Act, this Part should be read in conjunction with the regulatory policy stated in subclause 4(1). The standard licence conditions to which the different categories are subject are set out in Schedule 2 to the Act. some service providers may try to push the limits of the licensing regime to secure commercial advantage by attempting to operate under the least costly and least restrictive licence category. In particular, operators may seek to operate under a class licensing regime as open narrowcasters while providing advertiser-supported commercial broadcasting services. The Act empowers the ABA to investigate any service providers suspected of doing this, determine the category into which a service falls and, where an operation is in breach of the Act, take action. Punitive penalties under the enforcement regime are expected to operate as a significant deterrent to this practice, for example, $10 million per day for a company as a maximum penalty for operating a commercial television broadcasting service without a licence. An important aspect of the new approach in this Act is that, subject to the specific regulation of satellite subscription television and of the use of the broadcasting services bands, it does not prescribe the type of technology which may be used for the delivery of broadcasting services. As

long as a service provider complies with the relevant - licence conditions, any delivery technology may be used for the service — this is subject to the service provider obtaining the necessary authorisat ions to use such technology, for example, a licence or permit under the Radcom Act, or licence, class licence, permit or other approval from AIJSTEL under the Telecommunications Act. It — 21 — should be noted, however, that there is an embargo on the granting, before the completion (by 1 July 1997 or such earlier date fixed by Proclamation) of a review to be conducted by the Minister, of commercial television broadcasting licences which are not broadcasting services bands licences, ie. licences which do not use those radiofrequency bands as their means of delivery (refer to clauses 28 and 213).

Clause 11 - Categories cf broadcasting services This clause specifies the categories of broadcasting services to which the Act applies. The categories of services are the building blocks of the Act - licence category will determine: whether an individual licence is required; which program standards and codes of practice apply; which licence conditions apply; whether, and if so, which 0&C provisions apply; and which remedies and sanctions may apply.

Clause 12 - Method of regulating particular services Clause 12(1) requires individual licences for the provision of commercial and community broadcasting services, and subscription television broadcasting services. Clause 12(2) provides that all other broadcasting services (other than national broadcasting services) are to be provided under the relevant class licences determined by the ABA under clause 115 of the Act. This tiered approach to regulation (individual licences and class licences) aims to provide a more flexible, responsive and administratively efficient regulatory framework consistent with the public interest concerns relevant to each type of service. The approach facilitates the application of levels of regulation consistent with the nature of the services provided within each category, from the more pervasive conventional television services to the less intrusive and ‘niche’ targeted subscription and open narrowcast services. Community broadcasting services that are to be provided on the broadcasting services bands are dependent on free access to delivery capacity for which there are competing demands. To ensure that capacity is made available to the most appropriate and deserving community purpose, a merit-based process of allocation of those types of community broadcasting licences is set out in Part 6 of the Act.

Clause 13 - National broadcasting services — 22 —

This clause defines the term “national broadcasting services” and provides for the manner in which the Act applies to such services. Clause 13(1) defines “national broadcasting services” to mean the broadcasting services provided by the ABC and BBS under their respective Charters, or broadcasts of proceedings of Parliament provided under the ParliamentarY Proceedings Broadcasting Act 1946. - Clause 13(2) excludes from the ambit of the tern “national broadcasting services” any subscription broadcasting or subscription narrowcasting service provided by either of the national broadcasters. Clause 13(3) declares that the regulatory regime of the Act does not apply to national broadcasting services, except as expressly provided for by the Act. The overall effect of clause 13 is that, subject to the complaints regime in Division 2 of Part 11, the only national broadcasting services to which the Act applies are those subscription broadcasting or subscription narrowcasting services provided, or participated in, by the ABC or the BBS.

Clause 14 — Comsercial broadcasting services This clause sets out the criteria for determining what is a “commercial broadcasting service”. This category principally encompasses the existing commercial television and commercial radio services provided under the 1942 Act. In determining whether paragraph j~j applies, the overall programming of a service is to be considered, rather than focusing on discrete segments of the total programming. Subparagraph (b) (i) means that the service is provided utilising technology for which receiver equipment is readily available and affordable in the community to which the service is provided. - The reference to “free” in subparagraph (b) (ii) means that a person may receive the service without having to pay a subscription fee in any form, or having to be supplied with a special receiver by the service provider (or some other party on behalf of the service provider) as part of an agreement in relation to the provision of the service to that person.

Clause 15 - Community broadcasting services — 23 —

This clause sets out the criteria for determining what is a “community broadcasting service”. This category of service is essentially the same as the “public” broadcasting services provided under the 1942 Act. The change in name is to highlight the emphasis on these types of services being community-based, that is, provided to meet the needs of a local community, or of a particular sector of the community. A merit-based system for allocating community licences which utilise the broadcasting services bands is provided for in Part 6. Paragraph jbj recognises that some community broadcasters may have a modest operating surplus at the end of a financial year; this in itself would not exclude such a service from this category. Sc long as those surpluses are utilised for the continued operation of the service and are not distributed for personal use amongst those persons who are involved in the management or operation of the service, this criterion will be satisfied. However, this criterion would not permit a situation where a community broadcasting service was conducted in such a manner as to produce a large operating surplus which was then distributed in the form of large salaries, wages, allowances or fees to those persons involved in the management and/or operations of the service. A service would be considered to be “part of a profit-making enterprise” where that service contributes to the generation of income for an organisation other than the service provider, eg a service which broadcast horse racing direct to betting shops would be considered to be part of the same profit-making enterprise as those betting shops. The word “free” in paragraph jgj has the same meaning as in subparagraph 14(b) (ii). Community broadcasting services are distinct from open narrowcasting services in that community services must be provided for a community purpose and must make provision for some community participation in the provision of the service, and are prohibited from carrying any advertising (although they are permitted to carry 4 minutes of sponsorship per hour — refer to subclause 9(3) of Schedule

2) — open narrowcasters have a discretion as to whether they will carry advertising.

Clause 15 - Subscription broadcasting services This clause sets out the criteria for determining what is a “subscription broadcasting service”. — 24 —

For the purposes of paragraph ai. “subscription fee” is defined in subclause 6(1). The distinguishing feature of a subscription service is that the service is only provided to subscribers through some control by the service provider over either access to the receiving equipment necessary for the reception of the service, or the capacity of the customer’s receiving equipment to intelligibly receive the service. While generally there are no restrictions on the types of technology which may be used for the delivery of subscription broadcasting services, up until 1 July 1997, it will be illegal to provide satellite-delivered subscription television broadcasting services unless the satellite used is a “subscription television satellite” (defined in subclause 6(1)), and unless such services are provided under the authority of a licence allocated under Part 7.

Clause 17 — Subscription narrowcasting services This clause sets out the criteria for determining what is a “subscription narrowcasting service”. The “targeting” referred to in subparagraph (a Liii means that the service provider’s target audience(s) is readily identifiable as a special or common interest group such as members of a particular occupation, profession, club or association, or say, persons who enjoy Baroque music. This would not allow a service provider to target multiple special groups in one service to the extent that those groups taken as a whole could reasonably be considered to represent a cross—section of the community. The “limited location(s)”referred to in subparagraph (a)(ii) may include such limited locations as arenas or business premises, or the domestic dwellings in a specified “limited” area, or suburb, or isolated town. Examples of the types of events referred to in subparagraph (a) (iii) are: sporting events such as the Adelaide Grand Prix, the Olympic or Commonwealth Games, various championships etc; cultural events such as horticultural or flower shows, artistic exhibitions etc. In deciding whether the criterion in subparagraph (a) (iv) applies, the overall programming of a service is to be considered, rather than focusing on discrete segments of the total programming. Paragraph 1k!. means that the service is only provided to the target audience through some control by the service provider either of access to the receiving equipment - 25 — necessary for the reception of the service, or of the capacity of receiving equipment to intelligibly receive the service.

Clause 18 - Open narrovcasting services This clause sets out the criteria for determining what is an “open narrowcasting service”. Paragraph j~jhas the same meaning as paragraph 17(a). So long as they comply with the criteria in paragraph (a), some VAEIS services provided under the Radcom Act which were required to be encrypted in some form so as to restrict their reception in domestic premises, and therefore not constitute broadcasting under the 1942 Act, may dispense with encryption and come within the ambit of this licence category. This may also apply to some services which may have been provided under the authority of a LBL granted under the 1942 Act.

Clause 19 - ABA may determine additional criteria or clarify existing criteria It is recognised that the boundaries between the different broadcasting service categories may become somewhat blurred. Therefore, this clause allows for the ABA to make determinations of additional criteria or clarifications of existing criteria to refine the meaning of the categories or to facilitate distinguishing between the categories. This flexibility is intended to allow the accommodation of new services provided by new technologies such as digital audio broadcasting and compressed digital video as they emerge, without the need for amendment of the Act. Clause 19(2) allows different criteria or clarifications to be determined under subclause (1) for radio services and television services. Clause 19(3) enables the Minister to give specific directions to the ABA as to the content of determinations and clarifications under subclause (1), and requires the ABA to observe those directions.

Clause 20 — Determinations and clarifications to be disallowable by the Parliament This clause subjects determinations and clarifications under clause 19 to parliamentary oversight by making them disallowable instruments. — 26 —

clause 21 - Requests to ABA to decide which category a broadcasting service falls into As referred to in relation to clause 19, the boundaries between the licence categories may, for a variety of reasons, become somewhat blurred. In order that both prospective and continuing service providers may be certain as to whether, and if so, what parts of, the regulatory regime in the Act apply to their service, this clause provides for a person to obtain an opinion from the ABA as to what broadcasting service category a service provided, or proposed to be provided by the person falls into. Any opinion given will be binding on both the ABA and the person requesting the opinion; the licensee is protected for 5 years from a change of mind by the ABA as to the category the service falls into, so long as the circumstances under which the service is provided remain substantially the same as those advised by the licensee in relation to the application for the opinion. The 5 year period referred to in paragraph (5) (a) equals the licence period for a commercial broadcasting licence and provides some commercial certainty in that it would enable amortisation over a specified period of an investment in an innovative service with some regulatory certainty. Any fee charged by the ABA under clause 21(7) is limited, by virtue of clause 206, to cost recovery amounts.

clause 22 — Matters to be considered by ABA This clause sets out the matters to which the ABA is to have regard when making determinations or clarifications under clause 19, and when giving opinions under clause 21. This clause provides guidance on those aspects of a service which assist in determining that service’s power to influence community views — the greater that power, the more likely that a service will come within the ambit of a more highly regulated service category. The “accessibility” referred to in paragraph jgj may be affected if a special receiver (such as a non—AN/FM receiver) is required to receive the service. Other relevant factors will be the price of the receiver and whether or not it is obtainable only from the service provider, or is supplied only pursuant to an agreement with the service provider, or if the receiver is generally available for purchase by members of the public from electronic or electrical goods retailers. It is recognised that the high cost of particular types of receiving equipment may restrict the numbers of persons in the — 27 — community who actually own, or are expected to own such equipment. Conversely, where the cost of equipment is within the means of the average member of the community, it is expected that the level of ownership of such equipment would be relatively high. An example of “comprehensibility” as referred to in subparagraph (c) (iii) is where the service provider can technically individually address each receiver which has the potential to receive the service, such that by sending a special signal to a receiver, the service provider can turn on or off that receiver’s ability to receive that seryice. “Comprehensibility” may also be affected by the service being provided in a foreign language, or because the service relates to highly technical subjects. The word “frequency” in paragraph j~jdoes not mean the operating transmitter frequency (radio frequency), where a radiocommunications transmitter is utilised as a means of delivering a service; it means how often the service is provided per day, week, month, year etc. Many factors will be relevant to the “nature of (an) audience” as referred to in paragraph jfl, for example, occupation; ethnic, racial or language background; membership of professions, clubs, and associations; age; interests; religion etc.

PART 3 - PLANNING OP BROADCASTING SERVICES - This Part provides for the planning and management of that part of the radiofreguency spectrum which is to be used principally for the purposes of providing national, commercial and community broadcasting services using terrestrial transmitters in Australia. It is recognised that planning of radio frequency spectrum currently reserved for Mt and FM radio and UHF and VHF television plays a significant part in determining the structure, competitiveness and efficiency of the broadcasting industry. Part 3 confers on the ABA the responsibility, previously carried out by the Department of Transport and Communications, for planning the radiofrequency spectrum assigned to it by the Minister. By the operation of this Part, particularly the planning criteria set out in clause 23, together with ministerial guidance to the ABA on broadcasting priorities, it is intended that the broadcasting service planning process become more open and accountable to its users. It is also intended that barriers to entry to the broadcasting service industry be minimised, and that competition in the provision of such services be facilitated through the quicker introduction of extra services. — 28 —

The planning processes set out in this Part will determine the number of radiofrequency—delivered services available for different service types, using the broadcasting services bands, for different geographic areas of Australia. Through the designation of the broadcasting services bands (in the Spectrum Plan), the power of assignment of those bands under the Radcom Act to the ABA for planning (refer to paragraph (b) of the definition of “broadcasting services bands” in subclause 6(1)), the power, under subclause 25(3), to give specific directions to the ABA in relation to the preparation of frequency allotment plans, and the power under clause 31 to reserve capacity for national and community services, the Minister retains some policy direction over the planning of broadcasting services in Australia. It is important to note that the “assignment” of the broadcasting services bands to the ABA by the Minister does not confer any oroperty rights in those parts of the spectrum on the ABA. Broadcasting services operating in the broadcasting services bands will, in most cases, require 2 licences — a service licence allocated under this Act; and a technology licence issued under the Radcom Act for access to the technological means of delivery of the service. The technology licence for a broadcasting services bands licence will be issued automatically upon allocation of the service licence by the ABA; if at any time such service licence is suspended or cancelled, the technology licence will be suspended or cancelled.

clause 23 - Planning criteria This clause sets out the criteria to which the ABA is to have regard in making decisions under this Part concerning the planning of broadcasting services. The range of criteria to be considered, together with provision for wide public consultation, makes the broadcasting planning process the “driving force” of broadcasting regulation. It is at the planning stage that judgements will be made about the number and types of services to be available in market areas. There will no longer be provision at the licence allocation stage for reconsideration of whether or not there should be another service of a particular category in a licence area — such issues will be settled during the planning stage. With respect to paragraph jgj, it is expected that developments in broadcasting technology will make it possible to accommodate nore services of comparable or better technical quality in the same amount of spectrum that is currently used for broadcasting services. It could be expected that such developments may enable those parts of — 29 —

the spectrum, eg those currently used for the delivery of radiocommunications services, VABIS services and other non— mainstream broadcasting services, to be used to provide technically high quality broadcasting services.

Clause 24 - ABA to determine priorities This clause requires the ABA to determine priorities for the preparation of frequency allotment plans and licence area plans made under clauses 25 and 26 respectively. The competing priorities would be between particular areas of Australia, and between different parts of the broadcasting services bands. These priorities must be determined before the relevant plans are made

— this prioritisation is necessary because planning resources will be limited and must be allocated efficiently to the areas of greatest social and economic need;

— clause 27 requires the ABA to make provision for wide public consultation in the determination of planning priorities. Public input is important in this area because of the judgements to be made on social and economic issues.

Clause 25 - Preparation of frequency allotment plans Clause 25(1) requires the ABA to prepare a frequency allotment plan which determines the number of channels that are to be available for the provision of national, commercial, and community broadcasting services in particular areas of Australia. The channels, allotted as blocks of frequencies, are to be selected from that part, or parts, of the radiofrequency spectrum allocated under the Spectrum Plan for use by broadcasting services on a primary basis, and which the Minister has assigned under the Radcom Act to the ABA for planning. Clause 156 confers on the ABA the function of advising the Minister in relation to the preparation (arid variation) of the Spectrum plan and frequency band plans under the Radcom Act, allowing the ABA to influence high-level spectrum planning in relation to broadcasting demand. Clause 27 requires the ABA to make provision for wide public consultation in the preparation of allotment plans. Clause 25(3) allows the Minister to give the ABA written directions (of specific or general nature) with which the ABA must comply in preparing a frequency allotment plan. Through this power the Minister retains a measure of policy — 30 — direction over the planning of broadcasting. In particular, the Minister may exercise the power under this subclause in anticipation of a reservation of capacity for national and community broadcasting services under clause 31.

clause 26 - Preparation of licenoe area plans This clause enables the ABA to prepare and vary licence area plans which determine the number of broadcasting services that are to be available in licence areas with the use of the broadcasting services bands. The licence area plan will contain the precise detail of all licence areas, including such matters as: the areas covered by each licence area; the nominal carrier frequencies of the services; the nominal transmitter sites for each service; the nominal technical conditions for each service, including operating power and radiation pattern; and whether or not there will be a need for any translators for any of the services. Should the ABA decide to vary any particular licence area, it would have to do so by varying the licence area plan. Clause 27 requires the ABA to make provision for wide public consultation in the preparation of licence area plans.

clause 27 - Processes to be public

clause 27(1) requires the ABA to provide for wide public consultation when performing its functions under clauses 24 (preparation of frequency allotment plans), 25 (preparation and variation of licence area plans) and 26 (determination of planning priorities). Clause 27(2) requires the ABA to keep a record of all advice received by the ABA, and all assumptions made by the ABA, in performing its functions under clauses 24, 25 and 26. This record must be made available for public inspection. This is one of the many provisions in this Act which are intended to make the ABA accountable in the exercise of its powers and performance of its functions.

Clause 28 - Limitation on allocation of commercial television broadcasting licences This clause prevents the allocation of more than 3 commercial television broadcasting licences in any licence

area before a date to be fixed by Proclamation — this date must not be earlier than the completion of a review by the Minister under clause 213. The review, which, amongst other things, is to cover the need for further commercial — 31 — television broadcasting services in Australia, must be completed by 1 July 1991. The reason for this embargo is that it is considered that, because of the relatively limited size of the Australian market, current commercial television broadcasting licensees require a certain period to adjust following: the impact of a number of significant changes in broadcasting policy in recent years, including the implementation of the Government’s Equalisation Policy; and the introduction of competition from new types of broadcasting services, in particular, subscription television broadcasting services.

Clause 29 - Desigmation of licence areas This clause requires the ABA to designate one of the licence areas, specified in the licence area plan made under clause 26, as the licence area of a commercial television or commercial radio broadcasting licence or community broadcasting licence before allocating the relevant licence — this applies to all broadcasting services bands licences. All service areas of licences under the 1942 Act current at the commencement of this Act are preserved as licence areas under this Bill by the Broadcasting Services (Transitional Provisions and Consequential. Amendments) Bill 1992. Licence areas are fundamental to the operation of the O&C provisions of the Act. It is also expected that the technical planning guidelines developed by the ABA under clause 33 will include a requirement that transmissions outside a licensee’s licence area be incidental to what is technically necessary for the provision of an adequate signal to that licence area.

Clause 30 - ABA may determine population figures

Under this clause, the ABA may determine licence area populations and the population of Australia for the purposes of the Act. These population fig~ireswill be particularly important for the purposes of the audience reach rules in Part 5. The figures may also be relevant for determining into which category a service falls. Under clause 30(4), the ABA is to make a new licence area population determination under subclause (1) where a licence area is changed by variation of the licence area plan under clause 26.

Clause 31 - Minister may reserve capacity for national broadcasters or community broadcasters — 32 —

This clause allows the Minister to reserve capacity in the broadcasting services bands for national and community broadcasting services. The emphasis in this reservation power is on capacity not on p~flsof the broadcasting services bands; for instance, the Minister may notify the ABA that capacity for 6 radio and 2 television services be reserved in Sydney for national or community broadcasting services. This would include all capacity necessary to provide a service, eg main stations and translators. The reservation power will ensure the Minister retains policy responsibility for making spectrum capacity available for these categories of services. Capacity which is not reserved will be available for allocation by the ABA. BRACS services, currently provided under the 1942 Act will, by virtue of the Transitional Bill, be deemed to continue to operate as community services, with the licences deemed to have been granted to the Aboriginal organisations representing the relevant communities.

clause 32 — Reservations to be disallowable by the Parliament This clause subjects reservations under clause 31 to parliamentary oversight by making them disallcwable instruments.

clause 33 — Development of technical planning guidelines This clause requires the ABA to develop technical planning guidelines for all services that use the broadcasting services bands. The guidelines are expected to cover such matters as guidance on the emission standards to apply to services; and the minimum field strength required within services’ licence areas, and permitted maximum field strength of services’ transmissions outside of their licence areas. Broadcasting facilities planning is to be undertaken by service providers in compliance with the guidelines. Enforcement of the guidelines will primarily be carried out under the Radcom Act which is to be amended to make it a condition of licences granted under that Act that licensees comply with the ABA’s guidelines, and not cause interference in broadcasting services bands.

clause 34 — Alternative uses of broadcasting services bands Clause 34(1) allows the ABA to make parts of the broadcasting services bands available for temporary allocation in a licence area for re—transmission, class licence services, or other purposes. This subclause allows the ABA to make efficient use of the broadcasting services — 33 — bands, and will ensure that parts of these bands do not remain unnecessarily idle. Clause 34(2) requires the ABA to have regard to the possible future demand for the use of the relevant part of the broadcasting services bands in deciding the period for which a temporary allocation is made under subclause (1).

clause 35 Notification of decisions under this Part The ABA is required to give gazettal notification of the making of any planning instrument under this Part. The notice must advise where copies of the instrument may be obtained. This requirement is in keeping with the openness and public accountability of the planning regime provided for by this Act.

PART 4 - COMMERCIAL TELEVISION BROADCASTING LICENCES AND COMMERCIAL RADIO BROADCASTING LICENCES This Part sets out the manner in which the ABA is to allocate licences for commercial television and commercial radio broadcasting services. It is recognised that, pending technological developments, commercial broadcasting services will be primarily provided using limited and relatively scarce parts of the radiofrequency spectrum. The Part provides for the allocation of licences for services using the broadcasting services bands, though licensing of services using different delivery spectrum or technologies is also permitted. Standard conditions for commercial broadcasting licences are set out in Schedule 2. It is important to note that this Part does not require the ABA to have regard to the viability (as it was understood under the 1942 Act) of existing or proposed broadcasting services, in the allocation of commercial broadcasting licences. The Part provides an open regulatory regime where service providers take full responsibility for their own viability. This does not, however, diminish the requirement for licensees to comply with any licence conditions relating to program standards. Program standards are imposed as licence conditions, in paragraphs 7(1)(b) and 8(l)(b) of Schedule 2 for television and radio services respectively, breaches of which carry heavy penalties ($200,000 for television, refer to subclause 137(1); $50,000 for radio, refer to subclause 137(3)).

clause 36 - ABA to determine system for allocating licences — 34 —

Requires the ABA to determine a system for allocating commercial television and commercial radio broadcasting licences in accordance with guidelines provided by the Minister. It also requires the ABA to publish the results of allocations made in accordance with the determined allocation system. This approach to allocating commercial broadcasting licences is a departure from that in the 1942 Act — there is no ‘merit contest’ as to which proposal for a service is the most desirable; viability of the proposed service or existing services is not a factor to be taken into account; a licence may only be refused or cancelled because the licensee is unsuitable, that is, a licensee will no longer be required to demonstrate “technical, financial and management capability” as was provided in the 1942 Act.

Clause 36(1) enables the ABA to determine, in writing, a price-based allocation system for allocating commercial television and commercial radio broadcasting licences, where those licences are broadcasting services bands licences (“broadcasting services bands licence” is defined in subclause 6(1)), and for allocating non—broadcasting services bands commercial television licences. “Price-based allocation system” is meant to cover any allocation system based on the prices nominated by applicants for the subject licences as being what they would be willing to pay should they be successful in their applications; the system determined by the ABA need not provide that the highest nominated price is the actual price paid for the licence by the successful applicant, eg the highest bidder may only have to pay an amount equivalent to the second highest bid. It is expected that any allocation system so determined will specify how and when a licence is to be considered to have been allocated. Clauses 36(2) and jfl provides for a ministerial power of direction to steer the ABA’s choice of a price—based allocation system under subclause (1), and to set reserve prices for licences, which may vary from market to market.

Clause 36(4) The requirement in this clause for publication of the successful tenderer’s name will ensure the community is informed as to whom a licence has been granted, and as to the amount paid for that licence. It will also help to preserve the integrity of the suitability requirement under clause 41 by providing the opportunity for objections or evidence to be put to the ABA if any person has concerns about the tenderer’s suitability.

Clause 37 - When licences must not be allocated Clause 37(1) prohibits a commercial broadcasting licence being allocated to an applicant that: fl) is not an — 35 —

Australian company; or Ibi. the ABA decides, under subclause 41(2), is not suitable. ~1ause 37(2) makes it clear that, notwithstanding paragraph (l)(b), the ABA is fl2t required to decide on an applicant’s suitability, before allocating a licence to that applicant. This will ensure that the ABA does not have to pursue any unnecessary lines of inquiry; if suitability is raised as an issue, the ABA may decide that a determination on the issue of suitability is necessary.

Clause 38 - ABA to advertise for applications for certain 1 icences This clause requires the ABA to follow certain procedures in advertising for applications for commercial broadcasting licences, where those licences are broadcasting services bands licences.

Clause 39 - Additional commercial radio licences in single marXets This clause provides for the allocation by the ABA of commercial radio broadcasting services bands licences which in effect are equivalent to the supplementary radio lioences provided for under the 1942 Act. If there are at least 2 other commercial radio broadcasting services bands licences available for allocation in a market where there is only one commercial radio service being provided (on the broadcasting services bands or otherwise), the licensee of that service may apply to the ABA for one ‘over—the—counter’ commercial radio broadcasting services bands licence, which the ABA must allocate so long as the applicant is not unsuitable, and has paid a fee. These ‘over—the—counter’ licences must not be transferred to another person within 2 years of allocation. The purpose of this clause is to encourage the quicker introduction of more services to those communities which currently have only one commercial radio service. It is recognised that the introduction of extra independent radio services in such licence areas may be delayed for any number of reasons, and it is expected that a licensee in such a licence area, with the benefit of economies of scale, could introduce a new and distinctive service quickly.

Clause 40 - Allocation of other licences This clause allows the ABA to allocate a commercial broadcasting licence where the licence is not a broadcasting services bands licence. The exercise of this power is — 36 — subject to clause 28 which limits the number of commercial television broadcasting licences to 3 per licence area before a date to be fixed by Proclamation, such date not to be earlier than the conduct of a review under clause 213 which must be completed before 1 July 1997.

Before allocating a licence under this clause, the ABA must designate an area in Australia as the licence area of the licence - licence areas are relevant to the O&C rules in Part 5 (clause 40(2)). To put this clause in a commercial television context, before the review date referred to in clause 213, the ABA may not allocate any more commercial television licences (broadcasting services bands licences or otherwise) in a licence area where there are already three such services. Before that date, in those licence areas where there are less than 3 such services, the ABA may only allocate further commercial television lioences by means of a price based allocation system. After that date, the ABA will have a discretion as to which method it uses for allocating further such licences, ie by price based allocation or by ‘over the counter’ licensing under clause 40.

Clause 41 — When persons are regarded as suitable This clause sets out the manner in which, and the factors by reference to which, the ABA is to determine the suitability of a company for a commercial broadcasting licence. This approach is consistent with that proposed in a recent report on Customs by the Australian Law Reform Commission. The factors set out in this clause are expected to minimise the need for subjective judgements while preserving the regulatory intent of minimising the likelihood of abuse of the market access accorded by a commercial broadcasting licence. It is a standard licence condition that the licensee continue to meet the suitability requirements (refer to paragraphs 7(2)(b) and 8(2)(b) of Schedule 2

Clause 42 — Conditions of ccmmercial broadcasting licenees This clause imposes the standard licence conditions set out in Parts 3 and 4 of Schedule 2 on every commercial television broadcasting licence and commercial radio broadcasting licence respectively, and such other further conditions imposed by the ABA under clause 43. One standard condition imposed in Schedule 2 relates to the provision of an “adequate and comprehensive service”. The meaning of this condition has been limited in that it applies in the context of the totality of the broadcasting services provided in a licence area — it does not require — 37 — that each individual commercial licensee provide a service which is, in itself, an adequate and comprehensive service. This approach is consistent with that adopted by the ABT in recent decisions under the 1942 Act.

Clause 43 — ABA may impose additional conditions This clause empowers the ABA to vary, revoke, or impose additional conditions on a licence, subject to certain specified limitations. The clause sets out procedures the ABA must follow in taking such action on licence conditions.

Clause 44 — Matters to which conditions may relate Clause 44(l) places policy constraint on the ABA in that it may only impose conditions under clause 43 that are relevant to broadcasting services. Clause 44(2) allows the ABA to impose a condition on a commercial broadcasting licence, amongst other things, requiring the licensee to comply with a code of practice that is applicable to the licensee. Codes of practice are made under Part 9 of the Act and are to be observed in the conduct of broadcasting operations. This clause is intended to obviate the need to make a code of practice into a program standard under clause 123 where there are only one or two operators in breach of the code. Clause 131 provides for heavy penalties for breaches of licence conditions.

clause 45 — Duration of licences This clause sets the term of commercial broadcasting licences at 5 years - this is subject to Part 10 which includes provision for suspension and cancellation of licences for breaches of licensing provisions. The 5 year term is the same as the maximum term provided for equivalent licences under the 1942 Act.

clause 45 - Applications for renewals Allows the ABA to renew a commercial broadcasting licence. This clause also sets out the procedures for applications for renewal.

Clause 47 — ABA to renew licences unless it is aware of special circumstances This clause requires the ABA to approve an application for renewal, unless the licensee is found to be unsuitable under subclause 41(2). — 38 —

Clause 47(fl provides that in making a decision on an application for renewal, the ABA is not required to conduct an investigation or hearing. Clause 47 is expected to minimise the need for costly and resource—intensive hearings processes that, at times with the ABT under the 1942 Act, have led to allocations of resources to less important issues at the expense of timely investigation of major matters of concern. It also formalises a recent trend of the ABT using the so—called “paper inquiries” for many licence renewals.

Clause 48 - Transfer of commercial broadcasting licences Permits a licensee of a commercial broadcasting service to transfer the licence to another person without first seeking ABA approval of the transfer. This is quite different from the 1942 Act provisions which required ABT approval before completion of a transaction which effected the transfer. Under the 1942 Act regime, broadcasters side-stepped the prior approval transfer rules by selling the licensee company along with the licence. However, under the 1942 Act the ABT could, at any time, consider the fitness, propriety, management and technical capabilities, etc of the transferee

— the requirement for the ABT’s prior approval seemed superfluous. Under this new regime, the requirement for prior approval has been dropped as it is a licence condition that a licensee will remain suitable, so the ABA may at any time consider the suitability of the new licensee. Where the ABA finds such a licensee unsuitable, it may exercise its powers under Division 3 of Part 10 relating to issuing a notice directing an action to be taken or cease to be taken, or suspension or cancellation of the licence.

Clause 49 - Surrender of commercial broadcasting licences Enables a commercial radio or commercial television broadcasting licensee to surrender its licence to the ABA.

PART 5 - CONTROL OP COMMERCIAL BROADCASTING LICENCES This Part gives effect to the objects of the Act, set out in paragraphs 3(c) and (d), in relation to the ownership and control of the more influential broadcasting services. The approach of successive governments towards limiting undue media concentration and fostering diversity has been based primarily on quantitative limits on the number of broadcasting licences, and newspapers in the case of cross— media limits, in which a person can acquire a significant — 39 — interest. In general, these limits have been successful in fostering diversity of ownership and limiting foreign ownership of Australian broadcasting services. This has had beneficial consequences for competition and innovation in the industry and has contributed to the industry’s ability to express a plurality of views. The limits—based approach to preventing undue concentration of control remains appropriate and has been retained in this Bill. This Part sets out the rules for ownership and control of commercial broadcasting licences, and rules on cross—media ownership limits between commercial television and newspapers, and between commercial radio and newspapers. There are no O&C rules for narrowcasting services because, by their restricted nature, are not considered able to influence more than a small section of the community on limited issues. The only other O&C provisions in the Act are those relating to ownership of satellite subscription television broadcasting licences in Divisions 3 and 4 of Part 7. Other subscription services are not subject to O&C rules because it is considered they provide a discretionary service that consumers must pay to receive, and arguments about its ability to influence are therefore not considered as persuasive. The O&C provisions recognise that “control” depends on particular circumstances and that any attempt to be definitive is almost certain to leave loopholes — indeed, this has been considered to be a major failing of the 1942 Act. The O&C regime in this Act provides flexibility for the ABA to assess any corporate structure, agreement or association to determine if it confers control on any person; if the ABA determines that it does, then the ABA can check compliance with the control limits. This approach is elaborated in a legislative ‘essay’ at Part 1 of Schedule 1 to the Bill. The Schedule provides further guidance at Part 2 in deciding when a person has control and mea’suring ‘tools’ at Parts 3 and 4, such as tracing provisions that can be used as aids to the ABA in reaching a decision. It provides the ABA with the discretion to decide in difficult cases whether control exists. The O&C regim. will not create loopholes by omission. Rather, it will require the ABA to monitor the industry and empower it to investigate and decide where it considers, prima facie, that a breach of limits may exist without waiting for a transaction or other trigger to enable it to enquire. This approach discourages the construction of corporate entities for the purposes of avoiding fixed concepts of control that might be embodied in legislation. — 40 —

An exemption, similar to that provided by section 89KB of the 1942 Act, of authorised lenders from the O&C rules in relation to certain loans is provided in clause 4, Part 2,, Schedule 1. “Control” is covered in the Act in three areas. The interpretations in clauses 6, 7 and 8, limits and enforcement in Part 5 and the concept of “control” in Schedule 1. “Control” is also dependent on the notions of “licence area” and “licence area population” set out in Part 3. For commercial television, the total population reach limit has been increased from 60% to 75%; the ‘one—to—a—market’ rule has been retained; cross-media limits apply vis-a-vis newspapers and satellite subscription television broadcasting licences and commercial radio; foreign ownership has been retained at 15% for an individual and 20% in aggregate; and limits on directorships in the context of the above—mentioned limits have been maintained. For commercial radio, the limits have been considerably liberalised: State and national limits no longer apply; foreign ownership limits have been removed; the ‘one—to—a— market’ rule has been increased to a ‘two—to-a-market’ for all licence areas; the cross—media rules in 1942 Act have been retained, although there are no cross—media rules for commercial radio vis—a—vis subscription television broadcasting licences. Provision has been made for prior approval of a transaction which would put a person in breach of the O&C rules - this approval is only temporary, to enable the person to take action to cease being in breach (refer to clause 67). Provision has also been made for seeking an opinion from the ABA on whether a person is in control, or would be in control if a transaction were completed, of a licence, company or newspaper (refer to clause 74).

Division 1 — Preliminary

Clause 50 - Interpretation—knowledge of company The question of whether a company is aware that it has become in breach of the O&C rules, or would become in breach of those rules should a transaction be completed, is crucial to a decision on how to deal with a breach of the O&C rules. This clause deems a company is taken to have knowledge of a matter, for the purposes of Part 5, if a director, the chief executive, or a secretary of the company has knowledge of the matter. This concept of company knowledge is particularly relevant to the notification provisions in — 41 —

Division 6, the approval of temporary breaches provisions in Division 7, and the provisions in Division B relating to action by ABA in the event of a breach. It is recognised that imputing oompany knowledge through a director could give rise to situations where that director’s fiduciary duty may be compromised. It is considered, however, that there is an overriding public interest in strict compliance with the O&C rules; this public interest could easily be frustrated if company knowledge could not be imputed through its directors.

Clause 51. - Means of dealing with overlapping licence areas This clause sets out how licence areas are to be dealt with where they overlap so as to avoith double-counting of the populations of such overlapping licence areas when applying the 75% audience reach rules in subclauses 53(1) and 55(1) and (2); and undue concentration of ownership or control of broadcasting licences in such overlapping licence areas (refer subclause 53(2), clause 54, subclauses 55(3) and (4), and clause 56). The effect of this clause is best understood by referring to the following diagrams: — 42 —

rigure 1

Figure 2

Figure 3

In the Figure 1 example, the rules in Part 5 apply to licence areas A and B as if they were one licence area because licence area B is wholly contained in licence area A. In the Figure 2 example, the rules in Part 5 apply to licence areas A and B as if they were one licence area because their overlap is greater than 30%. Paragraph 51(a) applies where the percentage of overlap exceeds 30% of the licence area population of either licence area A or B. In the Figure 3 example, the rules in Part 5 apply to the following combinations cf licence areas as if each combination were one licence area: A and B; A and C; A and 0 - in each of these combinations, licence area A wholly contains the other licence area. However, the combinations of licence areas B and C; C and D; and 0 and B are not treated as single licence areas because in none of those combinations do the licence areas overlap.

Clause 52 - Changes in licence area populations not to put persons in breach of this Part This clause is a grandfathering provision. It provides that a licensee is not to be put in breach of the audience reach limits in subclause 53(1), 55(1) or (2) by reason of a new — 43 — determination of the licence area population of a licence area or of the population of Australia. In such cases, the previous determination continues to apply to the licensee. It should be noted that the protection afforded by this grandfathering does not extend to any transactions made by the licensee after such a determination, whereby the licensee would be put in breach of those subclauses. The grandfathering also does not apply to any person who may subsequently acquire the licence.

Division 2 — Limitation on Control This Division sets out the limits on control of commercial broadcasting licences. For commercial television, the total population reach limit has been increased from 60% to 75%; and other limits as applied under the 1942 Act, such as the ‘one—to—a—market’ rule, have been maintained. The limits reflect a recognition that commercial television is highly regulated, with limits on the introduction of new competition, and that the pervasiveness of the limited number of such services can have a significant degree of influence on community views. The O&C rules focus on control of commercial television licences (where ownership is just a factor) and are concerned with whether a person is in a position to exercise control of a licence, whether or not that control is exercised; in other words the focus is more on the person(s) who pulls the strings. For commercial radio, the limits have been considerably liberalised: State and national limits no longer apply; the ‘one—to—a—market’ rule has been increased to a ‘two-to-a- market’ rule for any licence area.

Clause 53 - Limitation on control of commercial television broadcasting licences Clause 53(1) imposes a 75% audience reach limit on a person in a position to exercise control of commercial television broadcasting licences. This 75% limit allows for more sensible network affiliation under equalisation policies. Clause 53(2) maintains the 1942 Act ‘one-to-a-market’ rule in relation to persons in a position to exercise control of such licences.

Clause 54 - Limitation on control of commercial radio broadcasting 1 icences This clause sets a limit of 2 on the number of commercial radio broadcasting licences a person may control in any one licence area. This ‘two-to—a—market’ rule is more liberal — 44 —

than was provided by the 1942 Act. The change in market limit allows for some small degree of economies of scale to be realised in markets where competition is not a concern but, in combination with clause 39, still protects smaller markets from undue concentration of ownership. It is in this area that the difference between television and radio regulation has been most distinctly drawn.

Division 3 - Limitation on Directorships This Division sets out limitations on the number of directorships a person may hold in ccmpanies that are in a position to exercise control over commercial broadcasting 1 icences.

Clause 55 - Limitation on numbers of directorships- television Clause 55(1) prohibits a person from being a director of 1 or more companies which control the same or different commercial television broadcasting licences, where the combined licence area populations of those licences exceed 75% of the population of Australia. Clause 55(2) prohibits a person from flj controlling a commercial television broadcasting licence; and Ibi being a director of a company which controls another such licence, where the combined licence area populations of those licences exceed 75% of the population of Australia. Clause 55(3) prohibits a person from being a director of two companies where one of these companies controls a commercial television broadcasting licence and the other company controls another such licence in the same licence area. Clause 55(4) prohibits a person from laX being a director of a company that controls a commercial television broadcasting licence; and j~jcontrolling another such licence, where both of those licences are in the same licence area.

Clause 56 - Limitation on numbers of directorships-radio Clause 56(a) applies the ‘two-to-a-market’ rule (referred to in clause 54) to directorships in (one or more) companies that control commercial radio broadcasting licences operating in the same licence area. Clause 56(b) prohibits a person from being a director of one or more companies that control 2 such licences in a licence area, and, at the same time, controlling another such licence in the same licence area. — 45 —

Clause 56(c4 prohibits a person from controlling 2 such licences in a licence area, and, at the same time, being a director of a company that controls another such licence in that licence area.

Division 4 - Limitation on Foreign Control of Television This Division sets out the limits on foreign control over commercial television broadcasting licenoes. “Foreign person” is defined in subclause 6(1). There are no foreign own rship limits in relation to commercial radio broadcasting licences.

Clause 57 - Foreign persons not to be in position to control coamercial television broadcasting licence This clause prohibits foreign control over a commercial television broadcasting licence (subclause jjJj, limits individual foreign company interests in a commercial television broadcasting licensee to 15% (subclause 121), and limits aggregate foreign company interests in any commercial television broadcasting licensee to 20% (subclause jfl). “Company interest” is defined in subclause 6(1) and clause 8. This clause gives effect to the object in paragraph 3(d), that Australians have effective control of appropriate broadcasting services.

Clause 58 - Limitation on foreign directorships-commercial television broadcasting licensees Clause 58(3i limits foreign directors to 20% for commercial television broadcasting licensees. Clause 58(2~ allows the ABA to give a one-off temporary approval for a breach of the foreign directorship limit imposed under subclause (1). The sorts of circumstances in which the ABA may exercise this discretion may include, the death of a director, the permanent incapacitation of a director in relation to performing the duties of a director, the resignation of a director, or the period immediately following changes in the size of a board of directors of a company.

Division 5 — Cross-Media Rules — 46 —

This Division sets out the rules on cross-media applying to commercial television broadcasting licences, commercial radio broadcasting licenoes, and those licences vis—a—vis newspapers (“newspaper” is defined in subclause 6(1)). Cross—media limits between commercial television and satellite subscription television broadcasting are set out in Divisions 3 and 4 of Part 7.

Clause 59 - Newspapers associated with commercial television or radio broadcasting licence areas This clause provides for the establishment of an Associated Newspaper Register, the registering of a newspaper in that Register as being associated with a commercial television or radio broadcasting licence in a licence area, the administration of the Register, and for public access to the Register. With respect to the fees referred to in subclause (6), clause 206 limits all ABA charges and fees to cost recovery amounts.

Clause 60 - Limitation on control of commercial television - broadcasting lioences, commercial radio broadcasting licences and associated newspapers This clause prohibits a person from controlling both: laX a commercial television broadcasting licence and a commercial radio broadcasting licence that have the same licence area; j~). a commercial television broadcasting licence and a newspaper that is entered in the Australian Newspaper Register as being associated with the licence area of that licence; or jgj a commercial radio broadcasting licence and a newspaper that is entered in the Australian Newspaper Register as being associated with the licence area of that 1 thence. The purpose of this clause is to prevent undue concentration of the more influential media with regard to the shaping of community views.

Clause 63~ - Limitation on cross-media directorships This clause sets out the rules on cross—media directorships as between: commercial television broadcasting licences and commercial radio broadcasting licences; commercial television broadcasting licenoes and newspapers; and commercial radio broadcasting licences and newspapers.

Division 6 - Notification Provisions — 47 —

This Division sets out rules for notifying the ABA of control over commercial television or commercial radio broadcasting licences, changes in that control, and of foreign directors in companies that are in a position to exercise control over such licences. Consistent with the policy of minimising regulatory intervent ion thereby reducing the attendant financial burdens on the broadcasting industry, and in order to reduce procedural complexity, the 0&c reporting requirements have been considerably rationalised and simplified. Approval by the ABA of all relevant transactions relating to media assets will no longer be required. However, there are two levels of required reporting: one is a general requirement for a licensee to notify changes in control of the licensee (clause 63), and to report annually on persons who are in a position to exercise control over the licensee, and on foreign directorships (clause 62); the other level requires any person who becomes aware that they have become in a position to exercise control over a commercial licensee or an “associated newspaper” (defined in clause 59) to notify the ABA within seven days of becoming so aware (clauses 64 and 65). These reporting requirements should provide the ABA with the information it requires to monitor and enforce the O&C limits. Additional information may be obtained by the ABA through the exercise of its information gathering powers in Part 13.

The notification regime is intended to enable the ABA to target its resources more effectively at cases where there is evidence for genuine concern about compliance, rather than being required to focus on every transaction, a requirement which, as ABT experience has shown, can tie up a major part of the regulatory body’s resources in studying irrelevant detail. The significant penalties attaching to breaches of the O&C limits and of the reporting requirements, are expected to be significant incentives to compliance. For the purposes of clause 62(1), the phrase “to the knowledge of the licensee” is explained in clause 50.

Division 7 - Approval of Temporary Breaches This Division sets out a process whereby the ABA may give approval for temporary breaches of the O&C provisions in Division 2, 3, 4 or 5 of this Part.

Clause 66 - Offence for breaches without approval — 48 —

Clause 66(1) makes it an offence for a person to allow a transaction to take place which puts that person in breach of a provision of Division 2, 3, 4 or 5 without approval from the ABA under subclause 58(2) or clause 67, whichever is relevant. Clause 66(2) makes an offence under subclause (1) a continuing offence in respect of each day during which the breach continues.

Clause 66(3) prevents a penalty being imposed a person who has been issued with a notice, under clause 70, to take action within a certain period to rectify a breach, where that period has not expired.

Clause 67 - Applications for prior approval of temporary breaches

This clause sets out procedures whereby the ABA will be able to grant a person prior approval for a temporary breach of Division 2, 3 or 5, where the breach is incidental to the objectives of the relevant transaction or agreement. Any approval must specify a period (either 6 months, one year or 2 years - refer subclause (5)) during which the applicant must take action to ensure the breach ceases.

Clause 68 - Extension of time for compliance with notic This clause provides procedures for the ABA to grant an extension of the period specified in a notice under clause 67. Clause 68(5) makes it clear that the ABA cannot have regard to any financial disadvantage, either to the applicant under this clause or any other person, that compliance with the clause 67 notice may cause.

Clause 69 - Breach of notice under section 67 to constitute an offence Makes non—compliance with a clause 67 notice an offence.

Division 8 - Action by the ABA This Division provides for procedures whereby the ABA may require action to be taken to remove a breach of the O&C provisions in Division 2, 3, 4 or 5.

The Act gives flexibility to the ABA in dealing with such breaches. If a person comes into breach of a provision, and — 49 - that person was either a party to the transaction which resulted in the breach or was in a position to prevent that transaction taking place, then that person may be prosecuted for an offence under clause 66. However, the ABA may consider it more appropriate to require immediate action to be taken to remove the breach than to proceed to prosecution, given problems of proof in criminal proceedings and the delays involved in bringing those proceedings. Where a person is in breach of the O&C limits as a result of a transaction which occurred without the knowledge of that person, or which that person could not have prevented taking place, then it is not appropriate that the occurrence of the breach should of itself make that person liable to be prosecuted. The appropriate course is for the ABA to require action to be taken to remedy the breach. In the case of breach of the foreign 0&C limits, the person in breach may in any event be beyond the jurisdiction and not able to be prosecuted. In such a case, the ABA has power to require the licensee to take whatever action is available to it to remedy the breach. Failure to take action as required by the ABA would constitute a separate breach. There is trade-off in this regulatory approach. lEn most circumstances, the recipient of a notice may avoid prosecution by complying with the direction in the notice; the Commonwealth, and ultimately the taxpayer and the courts, would be spared considerable and unnecessary expense and diversion of resources in prosecuting the matter, and the public interest in the effective operation of the o&C limits is satisfied. Should a person unjustifiably refuse to comply with a notice, then that person risks incurring a high penalty for each day while the breach continues, depending on the particular breach.

Clause 70 - Notices by the ABA This clause provides procedures for the ABA to issue notices to persons requiring then to rectify a breach of a provision in Division 2, 3, 4 or 5. Clause 70(8) makes it clear that Parliament recognises that the person to whom a notice is issued under this clause, or other persons, may suffer financial hardship as a result of that person having quickly to dispose of shares, or make other arrangements, where the period specified in the notice for remedying the breach is only one month. While such a result may be unfortunate, it is nevertheless seen as necessary in order to discourage deliberate and flagrant breaches of the O&C provisions in Division 2, 3, 4 and 5. — 50 —

This clause underlines the seriousness with which Parliament views such breaches. It is intended that the ABA and the courts should have particular regard to this clause in considering any such case.

Claus. 71 - Extension of time for compliance with notice

This clause provides procedures for the ABA to grant an extension of the period specified in a notice under clause 70.

Clause 71(6) makes it clear that the ABA cannot have regard to any financial disadvantage, either to the applicant under this clause or any other person, that compliance with the clause 70 notice may cause.

Clause 72 - Breach of notice under section 70 to constitute an offence Makes non—compliance with a clause 70 notice an offence.

Division 9 - Special Provision for Small Markets

Clause 73 - Approval, of breach of television ownership limits in small markets

This Division makes provision for approval of breaches of the O&C limits in small broadcasting markets where there is only one commercial television broadcaster. The effect of the Division is to provide for a regime similar to supplementary licences under the 1942 Act in solus regional television markets. The Division provides for a licensee to hold a second licence if there is no other commercial interest in providing a service. This could be an important provision that may provide new services in television markets outside the current equalisation plan. Such licences could only be allocated if the ABA is satisfied that no other person is interested in providing the service. Approval may only be given by the ABA for a maximum of 5 years with extensions of up to 5 years available if the ABA is satisfied that no other person is interested in providing the service. The provisions could not, therefore, be used as an anti—competitive measure.

Division 10 — Prior opinions by the ABA — 51

Claus 74 - Requests to ADA to give an opinion on whether a person is in a position to control a licence, a newspaper or a company Given the high penalties for breaching the O&C provisions, it is important that affected persons have a degree of regulatory certainty. This Division provides, therefore, for a person to request a written opinion from the ABA on whether a person controls, or would control, a commercial television or comnercial radio broadcasting licence, or a newspaper or a company. Where an opinion is given, or is taken to have been given under this clause, the ABA and other Commonwealth agencies (eg the DPP) will be bound by the opinion, and will not be able to take action against the person who requested the opinion for an alleged breach of the O&C rules in this Part, as long as the circumstances of that person remain the same as those circumstances advised to the ABA in relation to the application for the opinion. it is expected that this provision will be widely used in advance of transactions where there may be some doubt on the issue of control.

Divisio; 11 - Miscellaneous

Clause 75 — Register of matters under this Part

This clause requires the ABA to maintain a Register of all notifications, approvals, extensions, and notices made given or granted under Part 5, and to keep the Register open for public inspection. The purpose of this clause is to facilitate the accountability of the ABA in the exercise of its powers with respect to the O&C rules applicable to commercial broadcasting and to make information available to the public.

clause 76 - Continuing offences This clause provides that section 4K of the Crimes Act 1914 applies to obligations to comply with notices under Part 5. Section 4K provides that where there is a statutory obligation to take some action within a certain period that obligation remains until the action is done regardless of whether the period has expired. Section 4K also provides that a failure to comply with such a statutory obligation constitutes a continuing offence.

Clause 77 - Part has effect notwithstanding Trade Practices Act — 52 —

Makes it clear that this Part overrides the Trade Practices Act 1974 wherever it is inconsistent with that Act for the purposes of the O&C limits set in this Part. The TPA continues to apply to the conduct of broadcasters.

Clause 78 - Part not to invalidate appointments Declares that nothing in Part 5 invalidates an appointment of a person as a director of a company. This enables directors to continue to function in a company that is in breach of the O&C limits. otherwise they would be required to resign under other provisions of the Act and no-one would have the power to remedy the breach (this is considered to be an unintended consequence of the O&C provisions relating to directorships in the 1942 Act).

PART 6 - COMMUNITY BROADCASTING LICENCES

This Part provides for the manner in which the ABA is to allocate licences for community broadcasting services. Community broadcasters have different goals from commercial and national broadcasters. Community broadcasters differ from other broadcasting services in that they have a local focus and role in attracting local community participation in broadcasting. This community participation is a crucial element which must be satisfied in order to qualify for the grant of a community licence. There is continuing policy support for the non-commercial use of the radiofrequency spectrum by deserving community groups for services such as BRACS. This third dimension of the broadcasting industry adds to diversity of ownership and programming by reflecting a different range of views, priorities and institutional pressures. As such, capacity in the broadcasting services bands will continue to be reserved by the Minister for use by community broadcasters (clause 31); frequencies will be made available free-of— charge and will be allocated through the provisions of this Part by a comparative merit selection process administered by the ABA. However, the ABA is not required to allocate a licence where it does not consider that the services proposed by the applicants would adequately serve the needs of the community. As low—cost, multiple-channel, delivery technologies such as optical fibre cable or enhanced satellite services (digital) become available, it is expected that, as has happened elsewhere in the world, community groups will use those technologies to provide their niche services to limited audiences. — 53 —

Clause 79 - Interpretation Defines “company” to include an incorporated association, for the purposes of Part 6.

Clause 80 - ABA to advertise for applications for community broadcasting licenses This clause sets out the procedures for the ABA to allocate community broadcasting licences.

Clause 82, - When licences must not be allocated Clause 81(1) prohibits a community broadcasting licence being allocated to an applicant that the ABA decides, under subclause 83(2), is not suitable. Clause 81(2) makes it clear that, notwithstanding subolause (1), the ABA is not required to decide on an applicant’s suitability, before allocating a licence to that applicant. This will ensure that the ABA does not have to pursue unnecessary lines of inquiry; if suitability is raised as an issue, the ABA may decide that a determination of suitability is necessary.

Clause 82 - Other community broadcasting licenoes Provides procedures for the ABA to allocate non-broadcasting services bands licences. This recognise that the use of the broadcasting services bands may not always be the most efficient, cost effective method for delivering a community broadcasting service.

Clause 83 - When persons are regarded as suitable This clause sets out the manner in which, and the factors by reference to which, the ABA is to determine the suitability of a company for a community broadcasting licence. The factors set out in this clause are consistent with the approach proposed in recent reports by the Australian Law Reform Commission; they are expected to minimise the need for subjective judgements. It is a standard licence condition that the licensee continue to meet the suitability requirements (refer to paragraph 9(2)(a) of schedule 2).

Clause 81 - Allocation of community broadcasting licences — 54 —

Clause 84(1) enables the Minster to direct the ABA to give priority, in the allocation of broadcasting services bands community licences, to particular community interests, in any area. Clause 84(2) specifies the matters to which the ABA is to have regard in deciding whether to allocate a community broadcasting licence to an applicant, or to one of a group of applicants. Paragraph Id! emphasises that community broadcasting licences must be provided for a community purpose. Paragraph jfl recognises that a community’s needs generally are reflections of the nature of that community, and whether, and how well, the diverse interests in that community are served. Paragraph jgj enables the ABA to consider the whole range of broadcasting services available in a licence area, to assess whether there is a need in a community which is not being served, and which may appropriately be served by a community broadcasting licence. For the purposes of paragraph jfl, “capacity” will include such matters as the management, financial, and technical resources available to an applicant for the purposes of the proposed service. The intention of paragraph ,[d! is to ensure that a broad range of interests are provided for by the community services in any particular licence area. Paragraph jfl is intended to prevent community licences becoming mere political ‘tools’ for vested political interests or parties.

Clause 85 - ABA not required to allocate community broadcasting licence to any applicant This clause makes it clear that the ABA is under no obligation to allocate a community broadcasting licence to an applicant even though the ABA has advertised for applications for licences - it may be that the ABA does not consider that any of the services proposed by applicants would serve the needs of the community. The purpose of this clause is to prevent waste of spectrum where, for example, there is only one applicant and the purpose proposed is considered to be inappropriate. In such circumstances the resource may be better held for other applications in the future, or for a non—broadcasting use on a temporary basis (refer to clause 34). — 55 —

Clause 86 - Conditions of community broadcasting licences Imposes on each community broadcasting licence the standard licence conditions set out in Part 5 of Schedule 2, and any other conditions determined in writing by the ABA under clause 87.

Clause 87 - ABA may impose additional conditions on community broadcasting lioeness This clause empowers the ABA to vary, revoke, or impose additional conditions on a licence, subject to certain specified limitations. The clause sets out procedures the ABA must follow in taking such action on licence conditions.

Clause 88 - flatters to which conditions may relate

Clause 88(fl places policy constraint on the ABA in that it may only impose conditions under clause 87 that are relevant to broadcasting services. Clause BS(2~allows the ABA to impose a condition on a community broadcasting licence, amongst other things, requiring the licensee to comply with a code of practice that is applicable to the licensee. Codes of practice are made under Part 9 of the Act and are to be observed in the conduct of broadcasting operations. This clause is intended to obviate the need to make a code of practice into a program standard under clause 123 where there are only one or two operators in breach of the code.

Clause 89 - Duration of community broadcasting licenses This clause sets the term of community broadcasting lioences at 5 years — this is subject to Part 10 which includes provision for suspension and cancellation of licences for breaches of the Act or licence conditions.

Clause 90 - Applications for renewal of community broadcasting licenses

Allows the ABA to renew a community broadcasting licence. The clause also provides for the time and manner in which an application for renewal is to be made.

Clause 93. - ABA to renew community broadcasting licenses unless it is aware of special circumstances - 56 —

This clause requires the ABA to approve an application for renewal, unless the licensee is found to be unsuitable under subclause 83(2); this will reduce regulatory intervention in the operation of services

Clause 91(3) provides that in making a decision on an application for renewal, the ABA is not required to conduct an investigation or hearing. This clause is expected to minimise the need for costly and resource—intensive hearings processes that, at times with the ABT, have led to allocations of resources to less important issues at the expense of timely investigation of major matters of concern. It also avoids the need for community groups to expend resources in preparing for what could be unnecessary hearings rather than using those resources for the provision of community broadcasting.

Clause 92 - Surrender of community broadcasting licence

Allows a community broadcasting licensee to surrender its licence to the ABA.

PART 7 - SUBSCRIPTION TELEVISION BROADCASTING SERVICES This Part provides for the introduction of subscription television broadcasting, including satellite subscription television broadcasting services using a “subscription television satellite” (defined in subclause 6(1)). The general telecommunications licence conditions placed on ATJSSAT Pty Ltd (a subsidiary of OPTtJS Communications Ltd) require that carrier to make capacity available for at least 6 B—series satellite channels for the provision of subscription television broadcasting services until 30 June 1994. The moratorium, under section 24A of the Radoom Act, on the provision of subscription television broadcasting services has been Proclaimed to cease to have effect from 1 October 1992. Satellite subscription television broadcasting services have been provided for separately in the Act because; the restrictions on market entry into these services are to cease on 1 July 1997 (see subolause 130(2)). Provision has been made for the allocation by the Minister of satellite subscription television broadcasting licences. It will be an offence to provide a subscription television broadcasting service except in accordance a licence allocated by the Minister under this Part; it will also be an offence to provide such a satellite subscription service, before 1 July 1997, by use of a satellite other than a “subscription television satellite”. — 57 —

Provision is made for the Minister to determine a price- based allocation system for allocating satellite subscription television broadcasting lioences; this is consistent with the approach for allocating other types of licence which require individual licensing under the Act. There will be a licence for utilising four satellite transponders and such other single-transponder licences (at least 2) as may become available. It is intended that the four-transponder licence be allocated first; at least 2 single—transponder licences will be made available for allocation one year after the allocation of the four— transponder licence (see subolause 93(2)).

Satellite subscription television broadcasting O&C limits are imposed, in relation to the four-transponder licence, on: persons who control ‘large circulation newspapers’ or commercial television broadcasting licences; the national broadcasters; and persons who control a “telecommunications carrier” (defined in subclause 6(1)). Foreign ownership limits are inposed on subscription television broadcasting generally. ownership is to be traced through ‘company interests’ which is defined in subclause 6(1).

Division 1 - Allocation of subscription television broadcasting licences

Clause 93 - Minister to determine allocation system

Clause 93(1) requires the Minister to determine, in writing, a price-based allocation system for the allocation of four— transponder and at least 2 single-transponder licences to provide subscription television broadcasting services using a subscription television satellite. Any such system is expected to deal with the manner and method of payment by the successful applicant of the price for the licence.

Clause 93(2) prohibits any single-transponder licences being allocated before one year following the allocation of the four—transponder licence.

Clause 93(3) allows for the allocation system to provide that the ABA is to allocate the licences, and that an application fee is to be paid - clause 206 limits all ABA charges and fees to cost recovery amounts.

The purpose of clause 93(4) is to allow the Minister to take carriage of the selection process for determining to whom a licence is to be allocated, particularly during the period when the ABA is being administratively established, so that once the ABA is so established, the selection process will be complete, subject to the formality of the licence being — 58 — allocated. This will facilitate timely introduction of services under the four—transponder licence. It should be noted that the Minister is required to conduct the selection process in accordance with the price based allocation system determined under subclause (1).

Clause 93(5) requires the Minister to publish details relating to a successful applicant.

clause 94 - When subscription television broadcasting licence must not be allocated Clause 94(1) prohibits a subscription television broadcasting licence being allocated to an applicant that: Ifl is not an Australian company; or .j~jthe ABA decides, under subolause 97(2), is not suitable. Paragraph j.Q).. requires a satellite subscription television licensee to allow other satellite broadcasting services access to its domestic receiving equipment. Paragraph j~jimposes a special ‘industry development’ requirement on applicants for the four—transponder licence. This requirement is to ensure that opportunities are provided for Australian industry in relation to the manufacture and supply of the transmission and reception eguipment to be used for the service. Clause 94(2) makes it clear that, notwithstanding paragraph (l)(b), the ABA is not required to decide on an applicant’s suitability, before allocating a licence to that applicant. This will ensure that the ABA does not have to pursue unnecessary lines of inquiry; if suitability is raised as an issue, the ABA may decide that a determination of suitability is necessary.

clause 95 — Minister to advertise for applications for allocation of satellite subscription television broadcasting licence

This clause requires the Minister to make available certain information advertising for applications for satellite subscription television broadcasting licences. It is expected that an advertisement would specify whether it was a four-transponder licence being allocated, or a single-transponder or several single-transponder licences.

Clause 96 - Allocation of other subscription television broadcasting lioences - 59 —

This clause allows the ABA to allocate a subscription television broadcasting licence where the proposed service will not use a subscription television satellite as its means of delivery. Clause 130 prohibits the provision of a satellite subscription television broadcasting service, before 1 July 1997, other than by means of a subscription television satellite, and unless the service provider has been granted a licence for such a satellite service under this Part.

Clause 96(3) requires the ABA to publish the names of successful applicants.

Clause 97 — Suitability for allocation of lioence This clause sets out the manner in which, and the factors by reference to which, the ABA is to determine the suitability of a company for a subscription television broadcasting licence. This approach is consistent with that proposed in a recent report on Customs by the Australian Law Reform Commission. The factors set out in this clause are expected to minimise the need for subjective judgements while, in the case of satellite services, preserving the regulatory intent of minimising the likelihood of abuse of the market access accorded by a satellite subscription television broadcasting licence up to 1 July 1997. It is a standard licence condition that licensees continue to meet the suitability requirements (refer to paragraph 10(2) of Schedule 2).

Division 2 - Conditions of subscription television broadcasting licence

Clause 98 - Additional conditions applicable to subscription television broadcasting licence This clause imposes the standard licence conditions, set out in Part 6 of Schedule 2, on subscription television broadcasting licences. This clause also empowers the ABA to vary, revoke, or impose additional conditions on such a licence, subject to certain specified limitations; procedures the ABA must follow in taking such action on licence conditions are also provided.

Clause 99 - Matters to which conditions may relate

Clause 99(1) places policy constraint on the ABA in that it may only impose conditions under clause 98 that are relevant to broadcasting services. — 60 —

Clause 99(2)(a) allows the ABA to impose a condition on a subscription television broadcasting licence, amongst other things, requiring the licensee to comply with a code of practice that is applicable to the licensee. Codes of practice are made under Part 9 of the Act and are to be observed in the conduct of broadcasting operations. This clause is intended to obviate the need to make a code of practice into a program standard under clause 123 where there are only one or two operators in breach of the code.

Conditions may also: require compliance with the film classification system administered by the Office of Film and Literature Classification (paragraph jgJj; be designed to ensure compliance by the four-transponder licensee with the industry development plans referred to in paragraph 94(1)(c) (paragraph jgjj, or that that licensee’s domestic receiving equipment is accessible by other satellite broadcasting services (paragraph jfl).

Clause 100 - Special condition relating to advertising This clause imposes a general condition on subscription television broadcasting services prohibiting them from broadcasting advertisements before 1 July 1997.

Clause 101 - Special condition relating to Australian content This clause imposes a special condition on each subscription television broadcasting licensees, requiring it to devote 10% per year of program expenditure on drama program channels to new Australian drama programs. This condition gives expression to the object in paragraph 3(e). It is intended that this licence condition will motivate a growth in employment for the Australian drama production industry.

Division 3 - Ownership and cross-media rules

Subdivision A - Preliminary

clause 102 - Interpretation-knowledge of company This clause has the same effect in relation to a subscription television licensee as clause 50 has in relation to commercial broadcasting licensees — refer to the Notes on clause 50.

Clause 103 - Large circulation newspapers — 61 —

This clause provides for the establishment of a Large Circulation Newspaper Register, the registering of a newspaper in that Register as having a specified average daily circulation, the administration of the Register, and for public access to the Register. For the purposes of clause 103(5), clause 206 limits all ABA charges and fees to cost recovery amounts.

Subdivision B - Ownership and control restrictions

Claus 104 — Person in control of newspaper not to control, or hold company interests in, initial satellite licence Prohibits a person who controls a newspaper that is entered in the Large Circulation Newspaper Register from controlling, or having company interests of more than 2% in, the four—transponder satellite subscription television broadcasting licence.

Clause 305 — Commercial television licensees and national broadcasters not to control, or hold company interests in, initial satellite licence Clause 105(1) prohibits a person who controls a commercial television broadcasting licence from controlling, or having company interests of more than 2% in, the four—transponder satellite subscription television broadcasting licence. Clause 105(2) prohibits a national broadcaster from controlling, or having company interests of more than 2% in, the four—transponder satellite subscription television broadcasting licence.

Clause 106 - Telecommunications carriers not to control, or hold company interests in, initial satellite licence

Prohibits each telecommunications carrier from controlling, or having company interests of more than 2% in, the four— transponder satellite subscription television broadcasting licence.

Clause 3.07 - Foreign ownership limits for subscription television broadcasting licensees Clause 107(1) limits to 20% the company interests in a subscription television licensee which may be held by a foreign person. — 62 —

Clause l07(2~ prohibits the aggregate of company interests held by foreign persons in a subscription television broadcasting licensee from exceeding 35%.

clause tos - Satellite subscription television broadcasting licensee not to control another satellite subscription television broadcasting licensee Prohibits a person who controls a satellite subscription television broadcasting licence from having company interests exceeding 2% in, or controlling, another satellite subscription television broadcasting licence.

Division 4 - Offences for breaches

clause 3.09 - Offences for breaches This clause applies Divisions 7 and S of Part 5 (relating to approval of temporary O&C breaches, and action by the ABA to enforce O&C limits) to the 0&C limits applying to subscription television broadcasting licences under Division 3 of this Part.

Division 5 - Notification provisions

Clause 110 - Notification provisions This clause imposes notification requirements on each a subscription television broadcasting licensee similar to those notification requirements imposed on commercial broadcasting licensees under Division 6 of Part 5 - see the Notes for that Division.

Division 6 - Miscellaneous

Clause 111 - Transfer of subscription television broadcasting licence Permits transfer of a subscription television broadcasting licence to another person.

Clause 3.3.2 — äurrender of subscription television broadcasting licence — 63

Enables a satellite subscription television broadcasting licence to be surrendered to the ABA.

Clause 113 — Minister may protect the free availability of certain types of programs

This clause is an ‘anti-siphoning’ provision. Program siphoning in this context means the obtaining by a satellite subscription television broadcasting licensee of the rights to broadcast events of national importance and cultural significance, such that those events could not be received by the public free of charge. Such siphoning will be curtailed by way of a special list of events, or types of events, to be notified by the Minister under this clause. It will be a condition of a satellite subscription television broadcasting licence (see paragraph l0(1)(e), Part 6 of Schedule 2) that a licensee not acquire the right to broadcast an event listed in a notice published by the Minister under clause 113(1), unless a national broadcaster or a commercial television licensee has acquired that right. If the national and commercial television broadcasters have had an opportunity to acquire such a broadcasting right in relation to an event, and they have passed up that opportunity, then the Minister may remove that event from the list of events notified under this clause (refer to clause 113(2)).

This process should ensure, on equity grounds, that Australians will continue to have free access to important events. It will, however, also allow subscription television broadcasters to negotiate subsequent rights to complementary, or more detailed, coverage of events.

Clause 113(3) subjects a notice under subclause (1) or (2) to parliamentary oversight by making such a notice a disallowable instrument.

Clause 3.3.4 - Part has effect notwithstanding the Trade Practices Act Makes it clear that this Part overrides the TPA wherever it is inconsistent with that Act for the purposes of the O&C limits set in this Part. Otherwise, the TPA continues to apply to the conduct of subscription television broadcasters.

PART S - SUBSCRIPTION BROADCASTING AND NABROWCASTING CLASS LICENCES This Part provides for the determination of class licences for subscription radio broadcasting services, subscription — 64 —

radio and television narrowcasting services and open narrowcasting radio and television services. Class licences are not issued to individual services but are created for each service category as a generic, open, standing authority for anyone to operate a service, provided it complies with the licence conditions at Part 7 of schedule 2 and any other conditions the ABA may specify as appropriate to the different service types. Policy guidance on matters to which conditions on class licences may relate is given at clause 117. The provision of satellite subscription television broadcasting services using a “subscription television satellite” (see subclause 6(1)) is dealt with in Part 7, as is straightforward ‘over—the-counter’ allocation of subscription television broadcasting which are delivered by means other than a satellite. Class licence services will need access to delivery capacity and, as a consequence, may need technology licences under Radcom Act, Telecommunications Act or other legislation that will govern their technical operation. A person can be prevented from providing broadcasting services under a class licence if they breach the relevant class licence conditions, or for not providing the service in accordance with the relevant class licence (refer to the offence prbvision at clause 137). The regulatory response to such breaches may be an ABA application to the Federal Court under clause 142 for an order that the person desist. If a person provides a class licence service other than in accordance with the relevant class licence, the ABA has the power, under clause 139, to issue a notice requiring adherence with that class licence. Failure to comply with the notice is an offence punishable by a fine of $5,000. Program material carried by class licence services will be regulated by way of the codes of practice provided for at Part 9. If codes of practice fail in the industry generally, they may be made into program standards by the ABA under clause 123. A ‘minimum intervention’ regulatory approach to licensing and supervising these class licence services is considered appropriate because of their specialised, closely targeted and limited nature — hence their significantly lesser power to influence compared to commercial broadcasting. It is anticipated that the class licence regime will facilitate the emergence of a range of educational, business, ethnic, professional and other services that have so far been inhibited or totally banned by the existing regulatory structure. — 65 —

Many services that will be licensed under class licence categories currently operate under the VAEIS regime. Under the new regime of this Act, class licence services will still require a Radcom Act licence, or other technology authority where appropriate, to obtain access to their preferred delivery technology. The conditions of the class licence will then operate to regulate the content of the service in a similar way to the current VAEIS Guidelines. Consistent with the lighter regulatory touch for VAEIS, the conditions support Goverrmient objectives and protect the public interest are kept to the minimum necessary so as not to unnecessarily inhibit the emergence of services. The nature of some VAEIS guidelines has to date

Clause 115 — Determination of class licences Sets out the types of services in relation to which the ABA determine class licences.

Clause 116 — Conditions of class licences This clause provides for the inclusion of conditions in class licences. Class licence conditions apply to all services provided under the relevant class licence.

Clause 117 - Matters to which conditions may relate

Clause 117(1) places policy constraint on the ABA in that it may only impose conditions under clause 116 that are relevant to broadcasting services. Clause 117(2) allows the ABA to impose a condition on a class licence, amongst other things, requiring the licensee to comply with a code of practice that is applicable to the licensee. Codes of practice are made under Part 9 of the Act and are to be observed in the conduct of broadcasting operations. This clause is intended to obviate the need to make a code of practice into a program standard under clause 123 where there are only one or two operators in breach of the code.

Clause 118 - Variation of class licences This clause allows the ABA to vary, revoke or specify further conditions in a class licence. It also provides for the manner in which the ABA is to exercise this discretion.

Clause 119 - Class licences and variations to be disallowable by the Parliament — 66 — subjects the determination and variation of class licences to parliamentary oversight by making the relevant instruments disallowable.

PART 9 - PROGRAM STANDARDS This Part deals with the determination of program standards, and with industry self regulation, by the development of codes of practice, of the subject matter of programs provided by broadcasting service providers. Areas such as Australian content, children’s programs, taste and decency, and advertising, are matters of community concern which could conflict with a service provider’s responsibility to its shareholders to maximise profits. This Part aims to balance the cost and benefits of the community’s regulatory needs with the profit-based nature of a commercial service provider. Unlike commercial radio, commercial television still has a limited number of channels available that can provide mass audiences for advertisers. It is regarded as much more persuasive and ubiquitous, requiring a greater degree of regulatory intervention than other media. Programming is aimed at a mass market, and a network structure exists to distribute it. Commercial television broadcasting program standards are therefore considered necessary to regulate the type of programming that is permitted on Australian commercial television. It is because television is readily accessible to nearly all people of all ages that television standards have tended to be more stringent than those that apply in other media. The recent emergence of new sectors in the broadcasting service industry has necessitated reassessment of the appropriateness and applicability of some program standards. Unlike ‘free—to—air’ or ‘mainstream’ broadcasting that can be viewed by anyone, services proposed to be licensed under the class licensing regime, such as subscription broadcasting and narrowcasting, are discretionary services where a direct contractual relationship exists between program supplier and viewer. The discretionary, or consensual, nature of these services requires the viewer to make a conscious decision to accept them. The purchase of these services can therefore be equated with the purchase of a magazine or hiring a video. The customer chooses between products in an outlet, and chooses between outlets according to individual needs. The nature of these new services requires a different approach to program standards than for ‘free-to—air’ television and radio. — 67 —

To this end, provision has been made for different levels and types of program regulation for television and radio, and each of the broadcasting service licence categories, outlined in Part 2, according to the degree of access, public interest concern, comxnerciality and the competitive market for each service. Existing ABT program standards will be transferred to the ABA under transitional provisions pending determination of new standards by the ABA and development and registration of codes of practice. Where industry codes are not developed, the ABA is at liberty to determine a standard. A sunset clause will apply in transitional arrangements to existing standards except those dealing with children’s programs and Australian content, to ensure expeditious review and industry development of codes.

Clause 120 - Progras standards for children’s programs and Australian content This clause requires the ABA to make program standards to apply to commercial and community television broadcasters. The rationale for this provision is that it is widely accepted that television is a powerful medium with the potential to influence public opinion, and that television has a role to play in promoti ng Australians’ cultural identity. 1 Program standards are incorporated as licence conditions by the operation of Schedule 2; any breach of a standard constitutes a breach of licence conditions, the remedies for which are provided in Part 10 through a gradation of sanctions which the ABA has the discretion to apply according to the seriousness of the offence. Program standards made under this clause for commercial television broadcasters may only relate to programs for children, and to the Australian content of programs (refer to clause 120(2)).. In relation to clause 120(2) (a), standards for children’s programs are intended to cover not only the times at which children’s programs should be broadcast, but also how programs televised during children’s viewing times should be classified. With regard to clause l20(2)(b~u, it is intended that commercial television broadcasters broadcast Australian programming which reflects the multicultural nature of Australia’s! population, promotes Australians’ cultural identity and facilitates the development of the local production industry. It is also intended to include a requirement for Australian programming for children. — 68 —

Program standards made under this clause for community television broadcasting licensees may only relate to programs for children (refer to clause 120(3)). Subclauses (2) and (3) are intended to provide for the protection of children from possible harmful effects from television, and, in a more positive light, provide for children to be specifically catered for in programming. It is expected that community television by its very nature will reflect Australia’s culture and that there is no need to make provision for Australian programming.

Clause 122. — Development of codes of practic This clause provides for the development of codes of practice by representative radio and television broadcasting service industry groups, and for the ABA to register such codes. The codes of practice are to observed in the conduct of broadcasting operations. A rationale underpinning the codes of practice provisions is that inappropriate regulation can bring with it significant economic costs through efficiency and productivity losses. There can also be social costs as formal regulation can deprive industry of the opportunity to devise a flexible and responsive approach to meeting the demands and needs of the community. Allowing a certain degree of self-regulation gives broadcasting service industry groups an opportunity to manage more directly the costs associated with regulating program content and administering such regulation. More importantly, it places responsibility directly on the industry. It is expected that relevant broadcasting service industry groups will appreciate that it is in their interests to ensure that an appropriate balance is struck between the public interest in maintaining community standards of taste and decency, and licensees’ desire to provide competitive services — such groups will be aware that the ABA will have the power to impose program standards (under clause 123) where it considers that codes of practice have failed or have not been developed. It is intended that, subject to clause 123, program standards should not apply to providers of subscription broadcasting and narrowcasting, and open narrowcasting services because such services lack the same power to influence that is attributed to commercial television and commercial radio broadcasting services which are available free to the viewer. Also, with subscription services there is a direct commercial relationship between subscriber and — 69 — program provider and therefore viewing is at the discretion of the subscriber. clause 121(2) sets out the matters to which codes of practice relate. In relation to clause 121(2)(c), in the latter part of 1991, the ABT released a report on ‘accuracy and fairness’ in news and current affairs reporting. It is expected that this report will be particularly relevant to the development of those parts of any code of practice relating to news and current affairs programs. Clause 121(3) sets out certain matters that are to be taken into account when developing codes of practice relating to paragraphs (2) (a) and (b). As a result of recent work carried out by the Australian Broadcasting Tribunal (e.g. the Inquiry into violence) paragraphs (3) (a) to Jfl are considered to be of community concern and are provided as guidance to the industry and ABA. Clause 121(4) provides for the registration of a code of practice in the register maintained under clause 122. It is intended that codes of practice be developed in consultation with the ABA and registered by the ABA, in order to subject licensees to regulatory guidance. As part of the consultation process the ABA will make available to the industry group, research it has carried out to assist the industry group in devising the codes of practice. Industry groups could also commission research of their own in devising codes of practice. These codes, once registered, apply to all licensees in that sector of the industry. In deciding to register a code, the ABA must be satisfied that: the code adequately deals with the subject matter of the code; the code is endorsed by a majority of the providers of the relevant type of broadcasting services; and the public have been given adequate opportunity to comment, during the development of the code. An industry group refers to a peak industry body which currently exists or may be formed, (for example the Federation of Commercial Television stations (FACTS) which could be said to represent a majority of commercial television broadcasting licensees, or the Federation of Australian Radio Broadcasters (FARB) representing the commercial radio broadcasting licensees’ sector) which represents a majority of licensees in that sector of the broadcasting industry.

Clause 122 - ABA to maintain Register of codes of practice — 70 —

This clause provides for the establishment and maintenance by the ABA of a register of codes of practice. It is intended that all registered codes of practice developed by industry groups be available for public inspection.

Clause 123 — ABA say determine program standards vii r cod a of practice fail or where no code of praotice dcv loped It is the ABA’s function, under clause 156, to monitor complaints concerning broadcasting services and compliance with codes of practice. It is the intention of this clause that, if through its monitoring function the ABA is of the opinion that codes of practice have failed, the ABA may determine program standards; however, there must be “convincing evidence” of such failure. If non-compliance is by a limited number of licensees, the ABA has the option of imposing on those licensees enforceable licence conditions requiring compliance with the relevant code (refer to subclauses 44(2), 88(2), 99(2) and 117(2)). Clause 123(2) addresses the possibility of industry non- compliance with Parliament’s intention outlined in subclause 121(1), in that no appropriate code has been developed in relation to a particular matter.

Clause 124 - Consultation on standards This clause requires public consultation on the proposed determination, variation or revocation of a program standard made under either clause 120 or 123. It reflects the importance of public processes in the making of program standards. In relation to standards proposed to be made under clause 123, this clause will allow the industry further time to respond in the case where there has been a reasonable impediment to it developing codes of practice.

Clause 125 - Notification of determination or variation or revocation of standards sets out publishing requirements for determinations, variation and revocations of program standards. This clause and clause 124 are intended to facilitate the accountability of the ABA.

Clause 126 - Standards to be disallovable by the Parliam nt — 71 —

Subjects program standards determined by the ABA under clause 120 or 123 to parliamentary oversight by making them disallowable instruments.

Clause 127 - LiMitation of ABA’s power in relation to standards

This clause makes it clear that the ABA may not make a standard which requires prior approval (or in effect, censorship) of programs before the programs are broadcast. This limitation does apply in relation to programs for children.

To maintain the aim of striking a balance between the public interest, in maintaining prevailing standards of taste and decency, and licensees’ desire to provide competitive services, it is intended by clause 127(1) that the practice of licensees pre—classifying television programs should continue. However under clause 127(2), the ABA is to have a discretion as to whether to leave to licensees matters relating to children’s programs. The discretion may be exercised to protect children from harmful material or to ensure that there are quality programs available for children.

Clause 128 - Application of the Trade Practices Act This clause makes it clear that program standards and particularly codes of practice are not to be made or used for ‘anti—competitive’ purposes as that phrase is used in the TPA.

PART 10 - REMEDIES FOR BREACHES OF LICENSING PROViSIONS This Part provides an enforcement regime for breaches of licensing provisions. It does this in a manner consistent with the regimes under the 0&C provisions at Part 5 and Divisions 3 and 4 of Part 7. This Part is separated from those Parts because of their specific nature and the different penalties that apply. The general philosophy in the enforcement regime is to provide the ABA with a range of remedies that can be exercised commensurate with the seriousness of the offence (subolause 5(2) refers). This, in part, responds to criticisms of the 1942 Act that the AST did not have a gradation of sanctions at its disposal for responding to breaches; all it had was the light-touch power to impose extra licence conditions or limited terms for licence renewals, or the heavy-handed power to cancel or suspend, or refuse to renew, a licence. — 72 —

For this new regime of monitoring, investigation and enforcement to work effectively, it is important that the ABA is proactive in informing itself and responding to emerging problems. Consistent with, and building on, the package of efficiency reforms to the 1942 Act enacted in 1990—91, the range of remedies available to the ABA is: discussions with the service provider with a view to effecting rectification of any problem; imposition of a licence condition; issue of a notice to take specified action in a specified time; immediate prosecution through the DPP; court order to prevent provision of an offending service; fines; suspension of a licence; cancellation of a licence.

Division 1 - Offences for providing unlicensed services This Division creates offences for providing unlicensed broadcasting services where such services require an individual service licence allocated by the ABA. Division 5 applies section 4K of the Crimes Act 1914 to the obligations in Part 10 to comply with a notice. section 4K provides that where there is a statutory obligation to take some action within a certain period that obligation remains until the action is done regardless of whether the period has expired. Section 4K also provides that a failure to comply with such a statutory obligation constitutes a continuing offence.

For providing unlicensed commercial television broadcasting services, the maximum penalty is $2,000,000 (clause 129). For providing unlicensed subscription television broadcasting services, the maximum penalty is $2,000,000 for satellite services, and $200,000 for non—satellite services(clause 130(1)). — 73

For providing a subscription television broadcasting services during the “exclusivity period” using a satellite other than a subscription television satellite, the maximum penalty is $2,000,000 (clause 130(2)). For providing unlicensed commercial radio broadcasting services, the maximum penalty is $200,000 (clause 131). The relatively high levels of the above three penalties are expected to act as disincentives to service providers in other, less regulated, categories pushing the regulatory boundaries for commercial gain, and are consistent with subclause 4(1). For providing unlicensed broadcasting services bands community television broadcasting services, the maximum penalty is $50,000 (clause UI). For providing unlicensed broadcasting services bands community radio broadcasting services, the maximum penalty is $5,000 (clause 133).

clause 134 - Continuing offences Nakes of fences in Division 1 continuing of fences, so that a separate offence is committed each day during which the breach continues.

Division 2 — Action by ABA where a person provides a service without a licence

Clause 135 - Notices for providing broadcasting services without appropriate authority Provides that, in relation to offences under Division 1, the ABA may issue a notice to the person responsible, directing that person to desist providing the relevant service. This notice process is similar to that provided in Division 8 of Part 5 in relation to 0&C breaches.

Clause 136 — Breach of notice under section 135 to constitute an offence Clause 136(1) makes it an offence not to comply with a clause 135 direction. Penalties are set for offences in relation to each of the services referred to in clause 135. Clause 136(2) makes an offence under subclause (1) a continuing offence, so that a separate offence is committed each day during which the breach continues. — 74 —

Division 3 - Action in relation to breaches by licens es

This Division provides for the ABA to issue written directions to persons requiring them to take action to remedy breaches of licence conditions, or of class licences.

Clause 137 - Offence for breach of conditions of licenc 5 and class licenees This clause creates offences, and sets penalties, for breaching the standard licence conditions sets out in Schedule 2 in relation to licensees providing commercial television broadcasting, satellite subscription television broadcasting, commercial radio broadcasting, community broadcasting, and class licence services respectively.

Clause 138 - Continuing offences Makes an offence under clause 137 a continuing offence, so that a separate offence is committed each day during which the breach continues.

Clause 139 - Notices to stop breaches of conditions, of class licences or of codes of practice As an alternative to prosecution for an offence under clause 138, clause 139(1) provides for the ABA to direct the offending person to desist from committing the offence.

Clause 139(2) enables the ABA to direct a class licensee to comply with a relevant code of practice, where the ABA considers that that licensee is deliberately not complying with that code.

Clause 139(3) limits to one month the period within which an offender must take remedial action.

Clause 140 - sreaob of notice under section 139 to constitute an offence Makes it an offence not to comply with a clause 139 direction, and sets out penalties for such an offence in relation to each of persons referred to in clause 139.

Clause 141 - Suspension and cancellaticn - 75 -

Clause l4l(l)1c4 enables the ABA to suspend a licence of the kind referred to in clauses 129 to 133 for a period of up to 3 months; or jgj cancel the licence. This power may be exercised in relation to failure to comply with a clause 139 notice, or to breaches of licence conditions. These powers are seen as the ultimate sanction only to be exercised in the case of a serious breach or in the face of non- compliance with ‘softer touch’ sanctions. Clause l41(2~ affords natural justice to persons in relation to whom the ABA is contemplating exercising its powers of suspension or cancellation.

Division 4 - Action in relation to class licences

clause 142 - Application to Federal Court This clause allows the ABA to apply for a Federal Court order requiring a person to desist from providing a class licence service other than in accordance with the relevant class licence.

Division 5 - Miscellaneous

Clause 143 - Continuing offenoes This clause declares that section 4K of the Crimes Act 19i.4 applies to the obligations in Part 10 to comply with a notice. section 4K provides that where there is a statutory obligation to take some action within a certain period that obligation remains until the action is done regardless of whether the period has expired. Section 4K also provides that a failure to comply with such a statutory obligation constitutes a continuing offence.

Clause 144 - Liritation on prosecutions This clause is intended to prevent there being any ‘double jeopardy’ for a person who has been issued with a notice, under clause 139, to take action within a certain period to rectify a breach, and that period has not expired (this is consistent with subclause 66(3)).

PART 11 - COMPLAINTS TO TEE ABA This Part concerns the making of complaints to the ABA regarding the conduct of broadcasting services. — 76 —

The codes of practice provisions at Part 9 provide for the development of codes relating to methods of handling complaints from the public about program content or compliance with other matters covered by the codes of practice. It is envisaged that, in the first instance, the complainant would take up the complaint directly with the service provider. If unsatisfied by the response, the complainant may take the matter up with the relevant industry body such as PACTS or FARB. This Part provides for complaints to be made to the ABA as an avenue of last recourse if other mechanisms have failed; however, complaints can be directed straight to the ABA. The ABA must investigate the complaint and notify the complainant of the result, unless the complaint is frivolous, vexatious, or not made in good faith; or if a complaint under clause 145 does not relate to an offence under this Act, or to a breach of licence conditions. These provisions strike a reasonable balance by placing the onus in the first instance on service providers to respond to consumer needs and dissatisfactions while providing appropriate consumer protection mechanisms and avenues for reporting to the ABA breaches of the Act and licence conditions. The provisions are also provided as an alternative to renewal hearings.

Division 1 - Complaints relating to action under lieences and class licences

Clause 145 - Complaints relating to offences or breach of licence conditions Enables a person to make a written complaint to the ABA regarding an alleged offence against this Act or regulations, or breach of licence condition or a class licence by the provider of a broadcasting service.

Clause 146 - Complaints under codes cf practice Enables a person to make a written complaint to the ABA where the person does not get a satisfactory response to a complaint made to a broadcaster or broadcasting industry body under a code of practice.

Clause 147 - Investigation of complaints by the ABA

Clauses 147(1) and Jfl require the ABA to investigate the all complaints made to it under clauses 145 or 146, unless the ABA considers the complaint to be frivolous or — 77 vexatious, or not to be made in good faith; or the complaint does not relate to an offence against the Act or the regulations, or a breach of a licence condition.

Clause 147(3) requires the ABA to notify the complainant of the results of an investigation conducted in response to a complaint under this Part. This is to avoid a complaint unanswered, leaving the complainant wondering what the point was of making a complaint in the first place. Subclause 165(2) requires the ABA to act expeditiously, efficiently and economically in dealing with complaints. Where a complaint was found to be proven, any penalties would be applied consistent with the nature of the offence/breach, and as provided for in the relevant Part.

Division 2 - Complaints relating to national broadcasting services

Clause 148 - Complaints relating to National Broadcasting Services

Clause 149 - Investigation of complaints relating to the ABC or 888 by the ABA

This Division establishes procedures whereby a member of the public may make a complaint regarding programs broadcast by the ABC or the SBS.

As is the case with commercial broadcasters, the ABA should be the last recourse for complaints against the national broadcasters. Complaints to the ABA are allowed where the person has complained to the ABC or SBS under clause 14$ about an alleged breach of their code of conduct but th! complaint has not been answered within 60 days or the reply is considered inadequate. Clause 149 requires the ABA to investigate the complaint unless it is considered frivolous or vexatious or it is not relevant to the applicable code of practice.

Clause 150 — Action by the ABA where complIint justified This clause enables the ABA to give a written recommendation to a national broadcaster that that broadcaster take corrective action (which could include an apology or retraction) to comply with their code of practice where the ABA considers that a complaint under clause 148 is justified. — 78 —

clause 151 - ABA may report to Minister on results of recommendation Where a national broadcaster does not take appropriate action within 30 days of receiving a recommendation under clause 150, the ABA may provide a report to the Minister on the matter aix] the Minister mist table that report within 7 sittirq days. This procedure is very similar tO the reporting option available to the Commonwealth Ombudsman.

PART 12 - THE AUSTRALIAN BROADCASTING AUThORITY This Part provides for the establishment and coñstitut ion, powers and functions, general obligations, staff and administration of the ABA as the body to administer broadcasting regulation in Australia. The ABA will be staffed under the Public Service Act 1922. Consistent with current practice for senior executives in other parts of the Australian Public Service, the senior executives of the ABA may be appointed on fixed tern contracts. - The ABA will have effective powers to enable it to do all things necessary to properly administer the Act. Its functions are set out in clause 156. These have been elaborated elsewhere under specific provisions to which they relate. The ABA will be subject to general policy direction by the Government, and will be bound by any obligations entered into by the Australian Government through treaties and conventions with other Governments. The Minister will be able to notify the ABA of any general policies that are to be applied by the ABA (such as for equal employment opportunity and participative management). The Minister will also have the power to give general directions to the ABA, but all such directions will be subject to disallowance in the Parliament. Administrative provisions, consistent with those applying to most commonwealth regulatory bodies, relating to staffing and operation of the ABA are set out in Schedule 3.

Division 1 - Establishment and constitution of th ABA

Clause 152 - Establishment of the ABA Clause 152(1) establishes the Australian Broadcasting Authority. - 79 -

Clause 152 Lfl is a standard provision providing that all courts, judges and persons acting judicially are to take judicial notice of the imprint of the ABA’s seal appearing on a document and are to presume that the document was duly sealed.

Clause 153 - How the ABA is to be constituted

This clause provides for the constitution of the ABA and the appointment of its members. Members may be full or part- time. There are to be a Chairperson, Deputy Chairperson and no more than S other members, appointed by the Governor— General.

Clause 154 - Minister may appoint associate members This clause allows the Minster to appoint associate members of the ABA for the purposes of particular investigations or hearings.

clause iss - Period of appointment of members and associate members This clause deals with the periods of appointment of members and associate members. Clause 155(2) limits a member to one re-appointment. Clause 155(3) allows associate members to be re—appointed any number of times.

Division 2 - Functions and powers of the ABA

clause iss — Primary functions of the ABA This clause sets out the primary functions of the ABA.

Clause 157 - Additional functions of the ABA Provides that the ABA has such other functions as are conferred on it by the Act or another Commonwealth Act.

Clause 158 - General obligations of the ABA — 80 —

Requires the ABA to perform its functions in a mannert consistent with various matters, including Australia s international obligations or agreements such as Closer Economic Relations with New Zealand.

Clause 159 - Minister may notify the ABA of general policies of the Government that are to apply to the ABA Enables the Minister to give written notification to the ABA of general policies of the Government which are to apply to the ABA. The subject matter of such directions is not expected to relate directly to broadcasting; rather, such matters may relate to equal employment opportunity, GATT etc.

Clause 160 - Minister may give directions to ABA This clause empowers the Minister to give the ABA directions as to the performance of its functions. The directions are to be of a general nature only, unless otherwise provided for by the Act. Such directions must, by the natural operation of this provision, relate to the ABA’s role in the regulation of broadcasting services Clause 160(2) requires the Minister to publish all directions given to the ABA under subclause (1). This is consistent with the general accountability of broadcasting regulation provided for in this Act.

Clause 161 - ABA not otherwise subject to direction Makes it clear that the ABA is not subject to direction by or on behalf of the Commonwealth except as otherwise provided by the Act or another commonwealth Act.

Clause 152 — General powers of the ABA This is a standard clause providing for more general powers of the ABA.

Division 3 - Staff of the ABA

Clause 163 — Staff

clause 164 - Consultants - 81 -

This Division provides for the staff of the ABA, the administration of those staff, and for the ABA to engage consultants.

Division 4 - Administrative provisions

Clause 165 - Administrative provisions

Applies to the ABA those administrative provisions set out in Schedule 3.

PART 13 - INFORMATION GATHERING BY THE ABA This Part provides for the gathering of information, and for the conduct of investigations or hearings by the ABA in relation to its functions. There is to be automatic licence renewal for commercial and community broadcasting services, with investigations or hearings by the ABA only in cases where the ABA has some doubt as to the suitability of the licensee. Also, prior approval from the ABA for the transfer of licences is no longer required. Therefore, the ABA is to have a discretion as to whether, and when, it will use its powers under this Part to gather information. The only qualifications to this discretion are the power of the Minister under clause 169 to direct the ABA to conduct an investigation, and the requirement under clauses 147 and 149 that the ABA investigate complaints concerning the provision of broadcasting services. Information gathering will be conducted by the ABA in relation to suspected breaches of the Act, regulations, licence conditions; for the purposes of allocating community broadcasting service licences; for the purposes of developing program standards or considering codes of practice; or for monitoring trends in the broadcasting industry, or in technology used in the industry. The ABA is to have full discretion in determining the procedures to be followed for the conduct of its hearings - it will not be burdened with the restrictions placed on the ABT as provided for in the Australian Broadcasting Tribunal (Inquiries) Regulations made under the 1942 Act.

Division 1 - Introduction Deals with the manner and scope of the ABA’s information gathering powers.

Clause 166 - Obtaining of information by the ABA — 82 —

Clause 166(1) bestows on the ABA a very wide discretion on the persons and organisations with whom the ABA may wish to consult in the process of informing itself on any matter relating to its functions. This clause is qualified by those provisions in the Act whioh require the ABA to provide for public consultation on the proposed exercise of certain of its powers (refer to clause 27, subclauses 43(2), 46(2), 87(2), 98(3), 118(3) and clause 124) Clauses 166(2) and jfl require the ABA to adopt information gathering procedures which, in the circumstances, are the quickest and most economical; which promote the administration of the Act; and only require a hearing where there are no less formal alternatives.

Clause 167 - Decision-making by the ABA not limited to matters discovered by investigation or hearing Makes it clear that in making a decision on any matter, the ABA is not restricted to considering material it acquires through the process of an investigation or hearing. The ABA may also take into account any matter it considers relevant, including the knowledge and experience of its members. This clause is not meant to override the requirement for the ABA to observe the conventions of procedural fairness in the carrying out of its functions.

Division 2 — Investigations Sets out the procedure for the conduct of investigations by the ABA. The powers of compulsion given to the ABA under this Division are similar to those exercised by the ABT under the 1942 Act.

Clause 168 - Investigations by the ABA Gives the ABA the discretion as to whether to make an investigation in relation to the performance of any of its powers and functions.

Clause 169 - Minister say direct an investigation Allows the Minister to direct the ABA to conduct an investigation into a matter where the Minister considers such an investigation is in the interests of the due administration of the Act. — 83 —

Clause 170 - ABA may call for written submissions from the public Makes it clear that the ABA has the discretion to conduct a ‘paper investigation’, without the need for any formal appearances or examination of persons, by calling for written submissions from members of the public.

Clause 2.71 — Notice requiring appearance for examination

Enables the ABA to summons a person to attend and give evidence before a delegate of the ABA and to produce documents, or to provide documents or other information to the ABA.

clause 172 - Examination on oath or affirmation This clause is a standard provision relating to the examination of a person under an oath or affirmation.

Clause 173 — Examination to take place in private Stipulates that the examination of a person during an investigation must be conducted in private. Also allows that person to have an adviser present at such an examination.

Clause 174 - Record to be made of examination Requires that any examination of a person be recorded, and gives that person a right to be given a copy of that record.

clause 175 - Production of documents for inspection Allows the ABA to require a person to give the ABA access to documents relevant to an investigation, and allows the member to make copies of any of those documents.

Clause 176 - Report on investigation This clause enables the ABA to prepare a report on -an investigation. Where an investigation is conducted at the direction of the Minister, the ABA is required to prepare a report and give a copy to the Minister. Copies of any part of a report may be given to the DPP for prosecution purposes. — 84 —

clause 177 - Publication of report This clause sets out the rules concerning the publishing of investigation reports.

Clauee 178 - Person adversely affected by report to b giv n opportunity to comment

Requires the ABA to give a person sufficient opportunity to nake oral or written representations to the ABA before it publishes a report, or part of a report, the publication of which would, or would be likely to adversely affect the interests of that person. The intent of this provision is to ensure the ABA is well informed in considering the public versus the private interests in relation to whether an investigation report, or a part of it, should be published.

Division 3 - Hearings

clause 179 - Interpretation-seabérs to include aseociat a

Formal provision.

clause iso - Power to hold hearings Allows the ABA the discretion of holding hearings for the purposes of the performance of any of its powers or funot ions.

Clause 181 - Minister may direct ABA to bold a h aring

Allows the Minister to direct the ABA to hold a hearing.

Clause 182 - Procedure for conduct of hearings This clause gives the ABA broad discretion as to the procedures for holding a hearing. This is a significant departure from that which was required under the 1942 Act regime, where the procedures for ABT hearings were set out in that Act and the Australian Broadcasting Tribunal (Inquiries) Regulations, and led to what was considered to be an unnecessary level of formality in hearings.

Clause 183 - ABA may direct holding of conference — 85 —

This clause enables the ABA to direct persons to attend conferences. It is envisaged that conferences will be used for the purposes of attempting to negotiate solutions to an issue raised in the course of a hearing. clause 183(21 provides that a person may be excluded from further participation in a hearing where the person unreasonably fails to attend a conference as directed under subclause (1).

Clause 184 - Hearings to be informal, quick and economical

Clause 185 - Hearing to be in public except in exceptional cases These clauses require hearings to be informal, quick, as economical as possible, and public (unless there are exceptional circumstances). The ABA’s compliance with these requirements is assisted by not being bound by the rules of evidence (clause 184(2)).

Clause 186 - Public notice of bearings Requires public notification that a hearing is to be held. This will enable persons who have an interest in the subject of any hearing to prepare for and attend the hearing; and this will ensure that the ABA is fully informed on the issue which is the subject of the hearing.

Clause 187 - Confidential material not to be published Enables the ABA to make suppression orders in relation to confidential evidence or other confidential material presented to a public hearing.

clause isa - Directions as to private hearings Deals with the directions the ABA can and must give in relation to a private hearing.

Claus• 189 — Constitution of ABA for conduct of hearings Enables the Chairperson to determine hearing panels.

Clause 190 - Presiding member — 86 —

The Chairperson presides over a hearing panel of which the Chairperson is a member. For other hearing panels, the Chairperson determines who is to preside.

Clause 191 - Reconstitution of hearing panel Provides for the reconstitution of hearing panels and the saving of former proceedings.

Clause 192 - Exercise of powers in relation to conduct of hearing Sets out who may exercise the ABA’s powers during the conduct of a hearing.

Clause 193 - Summons to give evidence or produce docum nts Enables the presiding member of a hearing panel to summons a person to attend and give evidence before a hearing or to produce documents. Also makes standard provision for the examination of a person under oath or affirmation.

Clause 194 - Written submissions may be made to hearing Allows a person to lodge a written submission to be taken into account by the ABA in the conduct of a hearing.

Clause 195 — Evidence and submissions to be taken into account by the ABA Requires the ABA to take into account any evidence or submissions made to it in making a decision to which the evidence or submissions relate. This is consistent with the rules of natural justice requiring all relevant considerations to be taken into account by a decision maker.

Clause 196 - Representation at hearings This clause enables a participant to be represented in a hearing by another person. The ABA must ensure that an unrepresented participant is not disadvantaged.

Clause 197 - Reports on hearings Deals with the preparation and publishing of reports on hearings. — 87 —

Division 4 - General This Division deals with the obtaining of search warrants by the ABA, the protection of ABA hearing panels and persons giving evidence in ABA hearings.

Clause 198 - Warrants to seize documents not produced This clause sets out standard provisions for obtaining search warrants in relation to the non—compliance with a requirement by the ABA to produce documents under this Part.

claus 199 - Protection of members and persons giving evidence This is a standard clause affording protection to persons involved in hearings.

clause 200 - Protection of panel conducting bearing This is standard clause creating offences for obstructing an ABA member of a panel conducting a hearing; disrupting an ABA hearing; and doing anything else that would constitute a contempt in the face of the High court, were an ABA hearing to be considered to be a proceeding of that Court. The maximum penalty for such of fences is one year’s imprisonment.

clause 201 - Non-compliance with requirement to give evidence Clause 201(1) makes it an offence for a person required to give evidence or to produce documents at an ABA hearing, without reasonable excuse, to fail to attend or appear and report from day to day unless excused or released from further attendance. The maximum penalty for such an offence is one year’s imprisonment. clause 201(fl creates offences for refusing to take an oath or make an affirmation when required to do so; refusing or failing to answer a question that the person is required to answer; and refusing o failing to produce a document that a person is required to produce. The maximum penalty for such an offence is one ear’s imprisonment.

Clause 20l(3) allows se f-incrimination to be a reasonable excuse for refusing to nswer a question or to produce a document. — 88 —

Clause 202 — Proceedings for defamation not to lie Protects certain persons, including the commonwealth and the Minister, from civil or criminal defamation proceedings arising from: Jfl the printing or publishing of a report or an investigation or a transcript of proceedings at a hearing; or j~)..the publication, by any means, of a fair and accurate report of proceedings at an ABA hearing.

PART 14 - APPEALS TO THE ADMINISTRATIVE APPEALS TRIBUNAL

Clause 203 — Appeals to the Administrative Appeals Tribunal Sets out, in table form, the decisions (including references in column to the provisions under which they were made) in respect of which a person may apply to the Administrative Appeals Tribunal for review. The only persons who may apply for review of a decision set out in column 1 of the table, are those specified in Column 3 in respect that decision.

Clause 204 — Notification of decisions to include notification of reasons and appeal rights Requires the ABA, when giving a person written notification of a reviewable decision, to include; Jfl a statement of reasons or the decision; and j~ advice to the effect that the person may apply to the Administrative Appeals Tribunal for review of that decision. This accords with standard practice under the commonwealth Administrative Law package.

PART 15 - MISCELLANEOUS

Clause 205 - Broadcasting taken to be publication in permanent form This clause re—enacts section 120 of the 1942 Act. The ubroadcastingt~ referred to in this clause means the transmission of material as part of a broadcasting service, whether or not, at the time of the transmission, the service was licensed or complied with a relevant class licence.

clause 206 - Amounts of fees Makes it clear th~tany fee which the ABA or the Minister is authorised by the Act to charge, must not exceed the amount that the ABA estimates to be the costs to the ABA in providing the service in respect of which the fee is — 89 — charged. This is to ensure that none of the ABA’s fees amount to a tax by exceeding what is necessary for cost recovery.

clause 207 - Supplying false or misleading information Makes it an offence for a person to knowingly provide false or misleading information in an application to the ABA or in response to a request from the ABA for information. The maximum penalty for such an offence is one year’s imprisonment.

clause 208 — Prosecutions Clause 20&(fl permits an offence against the Act to be prosecuted at any time. This is subject to clauses 66(3) and 144 where the period by which a person is required to take some action has not expired. Clause 208j2) requires that prosecutions for offences against the Act which carry a maximum penalty exceeding $50,000 for a natural person be brought in the Federal Court only. clause 208j44 confers jurisdiction on the Federal Court to hear any matter arising under the Act. The aim of this clause is to allow serious matters to be heard by the Federal Court. Because decisions by the courts could fundamentally effect the operation of the Act, it is intended that the DPP could take cases that are likely to set precedents to the Federal Court to assist in consistency in judicial decisions on the operation of the Act. This will be particularly important in cases dealing where the issue is the service category a service falls into, or whether a person is in a position to exercise control of a licence, newspaper or company.

clause 209 - Publication of opinions Requires the ABA to publish any opinion it gives under clause 21 or 74. This is consistent with the requirement in clause 5(l)(b)(i) that the regulatory scheme of the Act be predictable. It also provides information to the public.

Clause 210 - Service of notices Permits any notice under the Act to be given to a person by telex or facsimile transmission. — 90 —

Clause 211 - Special provisions for re-transmission of programs This clause protects persons, who re—transmit national, commercial or community broadcasting services, from suit in relation to the content of the services broadcast. This protection does not extend to a person who is a licensee under this Act. The general effect of this clause is that services previously provided under RTP’s do not come within the ambit of the Act and do not require individual broadcasting service licences, provided that they do not extend beyond the licence area of the service being re—transmitted, unless permitted by the ABA under subparagraph 211(1) (b) (ii). Otherwise, transmissions beyond the licence area must only be incidental to what is technically necessary to provide an adequate signal to the area intended to receive the re— transmissions. It is recognised that there are small communities, or pockets within licence areas which, because of distance from main transmitters or for reasons relating to the topography of their areas, are unable to receive adequate broadcast signals. It is intended that arrangements be permitted between such communities and broadcasters for broadcasting services to be re—transmitted, unaltered, to those communities. Bona fide re—transmission would be subject to authorisation under the Radoom Act or Telecommunications Act, whichever is relevant, consistent with the technology neutrality of this Act. Should the communities wish to alter the services in any way, that is, by inserting local news items or community announcements, the ‘re—transmitted’ service, including the inserts, provided to the community would constitute a separate broadcasting service which would fall within the licence categories provided in Part 2 of the Act. Any re- transmissions which are delayed beyond what is necessary to make adjustments for different time zones will be taken to be separate services which may require a separate individual licence, or may come under one of the class licence categories and must comply with conditions of the relevant class licence.

clause 212 — Procedure relating to continuing of fences This clause borrows heavily from section 4K of the Crimes Act 1914. Clause 212(1) allows any number of charges against the same person for continuing offences to be joined in the same information, complaint or summons where those charges are founded on the same facts. — 9]. — clause 212(2) permits one penalty to be imposed on a person who has been found guilty of multiple continuing of fences. The total of the penalty, however, must not exceed the total that could be imposed if a separate penalty were imposed in relation to each offence.

Clause 213 - Review of television broadcasting industry This clause provides for the Minister to conduct a review into several aspects of the broadcasting industry and regulatory regime. It is intended that the one review cover all three issues referred to in this clause. The provision, in paragraph loX, for assessment of the possible national benefits accruing from additional commercial television services as part of a review, rather than specifying a date for such extra services, is in keeping with the philosophy of the Bill that tolerance or flexibility in the regulatory regime for accommodating future developments in the industry is preferable to any attempts to anticipate those developments with a level of specificity which may become an undesirable rigidity in that regime. As regards the review of the Australian content licence condition for satellite subscription television licensees, it is expected that by 1 July 1997, those licensees will be well established, and there are likely to be other forms of subscription television broadcasting services available. Given this, it is considered appropriate to re-visit this condition to determine whether it should continue to apply, taking into account the number of subscription television channels available at that time.

Clause 214 - Ministerial consultative and advisory bodies Allows the Minister to form consultative or advisory bodies to assist the Minister in the administration of the Act.

Clause 215 - Regulations Clause 2l5(]J enables the Governor—General to make regulations for the purposes of the Act. Clause 215(2) allows penalties to be prescribed in the regulations for offences against the regulations. The amounts of any such penalties are limited to $5,000 for a natural person and $25,000 for a company.

Clause 215 - channel sharing - 92 —

This clause permits the allocation of additional licences so that 2 persons can share broadcasting services delivery mechanisms.

SCHEDULE 1. - CONTROL AND OWNERSHIP OF COMPANY INTERESTS

Part 3. of this Schedule contains an essay which explains the difficulties in setting control rules in legislation which will be definitive for each and every case which may arise for consideration. The essay gives some examples of how the O&C provisions in the Act may operate, and concludes with an explanation that the ABA is to have a monitoring role over the broadcasting services industry and suitable powers of investigation to determine questions of control. Part 2 of the Schedule sets out the criteria for determining whether a person is in a position to exercise control over a commercial broadcasting service licence, company or newspaper. Part 3 of the Schedule provides that a person is deemed to be in control of a company if the person’s company interests in that company exceed 15% - this presumption is subject to any evidence presented to the ABA to the contrary. A procedure or ‘tool’ is set out which may be used for tracing such interests through a chain of companies for the purposes of determining a question of control. Part 4 sets out what is referred to as a ‘fractional tracing’ method for tracing ownership of company interests through a chain of companies.

SCHEDULE 2 - STANDARD CONDITIONS This Schedule sets out the standard conditions which are to apply to each type of broadcasting service licence. The ABA does not have the power to vary these standard conditions or impose further conditions which are inconsistent with the standard conditions. The Schedule also imposes a set of standard conditions, in clauses 3, 4, 5 and 6, which are to apply to all licence types. These conditions relate to the broadcasting of political or controversial material, and to the broadcasting of advertisements relating to medicines.

SCHEDULE 3 - ~DXINtSTRATIVE PROVISIONS APPLICABLE TO THE ABA This Schedule sets out mechanical provisions for the administration of the ABA. Subjects dealt with include: — 93 — terms, conditions, leave, remuneration, and allowances pertaining to members’ appointments; acting appointments; disclosure of interests by members and other persons; resignation and termination of members’ appointments; procedures for ABA meetings; ABA resolutions without meetings; liability to taxation; ABA estimates; annual reporting; money, and application of the money of the ABA; limitation on expenditure on contracts; and delegation.

Printed by Authority by the Commonwealth Government Printer

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