REPORT OF THE INDEPENDENT INQUIRY INTO THE MEDIA AND MEDIA REGULATION BY THE HON R FINKELSTEIN QC ASSISTED BY PROF M RICKETSON REPORT TO THE MINISTER FOR BROADBAND, COMMUNICATIONS AND THE DIGITAL ECONOMY 28 FEBRUARY 2012 © Commonwealth of Australia 2012 ISBN: 978-0-642-75424-0 (PDF version) 978-0-642-75425-7 (DOC version 978-0-642-75426-4 (printed version) The Report of the Independent Inquiry into the Media and Media Regulation is protected by copyright. With the exception of the Commonwealth Coat of Arms and where otherwise noted, all material included this report is licensed under a Creative Commons Attribution 3.0 Australia licence (http://creativecommons.org/licenses/by/3.0/au/). The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for CC BY 3.0 AU licence (http://creativecommons.org/licenses/by/3.0/au/legalcode). The document must be attributed as the ‘Report of the Independent Inquiry into the Media and Media Regulation’. Using the Commonwealth Coat of Arms The terms of use for the Coat of Arms are available from www.itsanhonour.gov.au Other use The use of any material in this report in a way not permitted or otherwise allowed under the Copyright Act 1968 may be an infringement of copyright. Where you wish to use the material on this in a way that is beyond the scope of the terms of use that apply to it, you must lodge a request for further authorisation with the department. Authorisation Please address requests and enquiries concerning further authorisation to: The Media Inquiry Secretariat Department of Broadband, Communications and the Digital Economy PO Box 2154 CANBERRA ACT 2601 [email protected] Letter of transmittal Contents Executive summary—conclusions and recommendations 7 Media codes of ethics and accountability 7 Changing business models and quality journalism 10 1. Introduction 13 Terms of reference 13 Resources 13 Origins of the Inquiry 15 Conduct of the Inquiry 16 Overview 18 Acknowledgment 21 Some key terms 21 2. The democratic indispensibility of a free press 23 The historical background 24 Rationales for free speech and a free press: the search for truth 26 Rationales for a free press: democratic discourse 31 Rationales for free speech: self-fulfilment and autonomy 33 Rationales for a free press: The fourth estate 35 Whatever the rationale, free speech is not absolute 37 Social responsibility: a theory of the press 39 Developments in Social Responsibility theory 47 Overall considerations 51 3. Newspaper industry structure and performance 55 Introduction 55 Historical industry structure 56 Functions of newspapers 61 Demand for media products 62 Media competition 64 Industry performance 68 Circulation 68 Revenues 71 Online advertising 74 Advertising revenue trends 76 Impact of internet on newspaper advertising revenue 79 Changing market for newspapers—the internet challenge 83 Impact of online sources of news 86 Time devoted to news consumption 93 Meeting advertisers’ demand online 95 Charging for access to online content 99 Conclusion 101 4. Media standards 103 Introduction 103 Public opinion, confidence and perceptions of the media 104 Trust 106 Performance 108 Bias 111 Influence/power 114 Ethics and intrusions on privacy 117 Summary and conclusions 123 5. The legal position of the media: privileges of the media, and restrictions on speech 125 Privileges of the media 127 To whom the privileges are available 128 Nature of the privileges 128 Freedom of speech: protections and restrictions 136 Protections of speech 136 Restrictions on speech 138 Restrictions on speech to protect private rights 147 6. The regulation of broa dcasting 157 Licensing of broadcasting in Australia 158 Current system—licensing, program standards and industry codes 160 Reasons for different treatment of broadcasters 166 Complaints-handlin g procedure for broadcast media 168 Current regulator—ACMA 168 Complaints under the Broadcasting Services Act 169 Sanctions that can be imposed on licensed broadcasters 170 Complaints about the ABC and SBS 173 Internal complaints handling 173 ACMA’s complaint-handling procedure 176 Criticisms of ACMA’s complaints-handling procedure 177 An assessment of ACMA’s complaints-handling procedure 179 Two further issues 180 Government funding and the independence of public broadcasters 180 Government regulation and the ‘chilling effect’—fairness doctrine in the United States 183 2 7. Self-regulation: journalistic codes and ombudsmen 189 The market as a mechanism of accountability 190 Codes of ethics 191 The journalists’ code 192 Publishers’ codes of ethics 195 What do the codes require? 196 The value of codes 196 Ombudsmen and readers’ editors 199 8. Self-regulation and the press council 205 The British Press Council 206 The New Zealand Press Council 213 Ireland 218 South Africa 219 The Australian Press Council 221 The APC today 228 Membership 228 Activities 229 Statement of Principles 230 Comp laints procedure 231 The effectiveness of the APC 235 Conclusions about self-regulation 243 9. Rights of reply, correction, and apology 245 What the codes of ethics say about redress 245 A right of reply 247 Justifications for a right of reply 247 Arguments for and against an enforceable right of reply 249 Should there be an enforceable right of reply? 252 International and comparative examples of a right of reply 256 Right of reply: Conclusion 260 A right of access 261 Justifications for a right of access 262 Arguments for and against an enforceable right of access 263 Should there be an enforceable right of access to the media? 265 10. Theories of regulation 267 Introduction 267 Why regulate? 267 Modes of regulation: governmental regulation vs self-regulation 270 Advantages and disadvantages of different modes of regulation 274 3 Designing a regulatory system 276 Final observations 277 11. Reform 279 Is there a problem? 280 What are the social costs of the problem and who bears them? 284 What are the options for regulation? 284 What options should be rejected? 285 Factors that should influence the choice of a better model 286 A strengthened APC would not be sufficient 289 The recommended model 290 General structure 292 Complaints-handling procedures 296 Remedial powers 297 Enforcement of determinations 298 Appeals, merits review and judicial supervision 299 Other attributes of the proposed model 299 The cost of implementing statutory regulation 299 The likely benefits of statutory regulation 300 12. Changin g business models and government support 301 The internet’s benefits for journalism and democracy 305 The challenge of the web 307 Paying for online news 310 Is market intervention needed? 314 Decline of newspapers as a problem for democracy 317 Local news 328 Calls for assistance for news production 330 Recommendations for future action 331 Annexure A—Terms of reference 335 Annexure B—Consultation 337 Annexure C—Issues paper 345 Annexure D—Submissions 349 Annexure E—Bibliography 355 Annexure F—Public opinion poll data 375 Annexure G—Analysis of Australian Press Council adjudications 405 4 Annexure H—Analysis of articles highlighted in Victoria’s Office of Police Integrity ‘Crossing the Line’ report 415 Annexure I—Media coverage of vulnerable people 419 Annexure J—Extracts from broadcasters’ codes of practice and media organisations’ ethical codes 425 Annexure L—Glossary 467 5 6 Report of the Independent Inquiry into the Media and Media Regulation Executive summary—conclusions and recommendations Media codes of ethics and accountability 1. There is common ground among all those who think seriously about the role of the news media and about journalistic ethics that: · a free press plays an essential role in a democratic society, and no regulation should endanger that role · a free press has a responsibility to be fair and accurate in its reporting of the news · a free press is a powerful institution which can, and does, affect the political process, sometimes in quite dramatic ways · a free press can cause harm—sometimes unwarranted—to individuals and organisations · a free press should be publicly accountable for its performance · codes of ethics regarding accuracy, fairness, impartiality, integrity and independence should guide journalists and news organisations. 2. There is less consensus on how this accountability should be enforced. 3. In Australia for newspapers there are several existing mechanisms of self-regulation: · the adoption of ethical codes or standards which at a minimum impose obligations of fairness and accuracy · the appointment by some newspapers of an ombudsman or readers’ representative to handle complaints from the public · the establishment by the newspaper industry of the Australian Press Council (APC) to handle complaints from the public and monitor professional standards. 4. Broadcasters (radio and television) have additional regulation. They are required to observe standards both approved and overseen by the Australian Communications and Media Authority (ACMA). 7 Report of the Independent Inquiry into the Media and Media Regulation 5. There is, however, external regulation which applies to all news media. They must operate within the laws of the land, most importantly for the media, the laws of defamation and contempt. 6. I have come to the conclusion that these mechanisms are not sufficient to achieve the degree of accountability desirable in a democracy: · Of the existing self-regulation measures, only one or two newspapers have appointed an ombudsman or readers’ representative. · Online news publications are not covered. · The most important institution, the APC, suffers from serious structural constraints. It does not have the necessary powers or the required funds to carry out its designated functions. Publishers can withdraw when they wish and alter their funding as they see fit. · ACMA’s processes are cumbersome and slow. · If legal proceedings against the media are called for, they are protracted, expensive and adversarial, and offer redress only for legal wrongs, not for the more frequent complaints about inaccuracy or unfairness.