WHAT IS CONTROL? Australians, or as many as possible, should have access to a choice of three commercial television channels Introduction In the same way as viewers in five of the six mainland capital cities. The The views expressed in this paper policy also made the grant of a third are entirely my own. They do not commercial television licence In Perth necessarily represent the views of any inevitable. person or company for whom I act or The means by which equalisation have acted in matters arising under is to be achieved remain an area of the relevant legislation. controversy. The debate about the use This paper is primarily concerned of multi-channel services (MCS) or with the answer to the question "What aggregation and the possibility of the is Control?". That question must now staging of MCS followed by aggregation be asked and answered In the light of has excited the regional stations. It the proposed new legislation announced has also been followed with great by the then Minister for Communica­ Interest by the networks. The timing, tions, the Hon. Mr Michael Duffy MP on commercial viability and the relation­ 27 November, 1986. In the absence of ship between MCS and aggregation are any more detailed information, it is all matters dealt with in the Broad­ necessary to speculate about the new casting Amendment Bill, 1986 which was regime to a considerable extent. reported on by the Richardson There are clearly risks in such an Committee. exercise, but they are risks worth taking In the debate about the new rules relating to ownership and The New Rules control. The mere announcement of them has brought about one of the The Government's proposal to greatest media reshuffles this country expand ownership and control to enable has ever seen. any one television owner to reach 75% For the sake of simplicity, and of Australia's population has opened because the process of change in rela­ up the whole market, both in respect tion to ownership and control of tele­ of the metropolitan stations and the vision appears to be more advanced regional stations. The combination of than in the case of radio, I propose proposed changes has given a new per­ to limit the scope of this paper to spective to networking. While all television. Except where expressly this may not rectify "the structural stated references to "the Act” are to imbalance" of the Melbourne and Sydney both the Broadcasting and Television stations to which reference Is so Act, 1942 and the Broadcasting Act, often made, it has produced a distinct 1942. shift in the balance, if not in the centre of gravity. Fears of undue Background concentration under the new ownership rule have been somewhat allayed by the The origins of the development of limitation on cross-media ownership. the equalisation policy and the Despite the frenetic market announcement of the 75% audience reach activity of the past few months, the proposals can be traced back to the existing law remains unchanged. Sec­ report presented by the Packer Organ­ tion 92 of the Act still prohibits a isation to the Fraser Government in person having a "prescribed interest" 1977, relating to the introduction of In more than two commercial television a domestic satellite system. Since licences. In his press release dated then, in the context of a series of 27 November, 1986 the Minister said studies, reports, inquiries and that the "two-station" rule was to be announcements, equalisation has become abandoned. He said it would be re­ central to the present Governments placed by a new rule which would limit commercial television policy as I per­ the reach of any one commercial sta­ ceive it. Equalisation means that all tion owner to 75% of Australia's popu­ -27- lation. An important feature of the As a result of the various acqui­ abandonment of the two-station rule sitions, subject to the approval of was the Introduction of limitations on the Australian Broadcasting Tribunal "cross-ownership”. The press release (ABT) and the passage of the imple­ said that the legislation which would menting legislation, the Networks are be Introduced would prevent a person now owned as follows: — from acquiring a television licence to serve an area in which that person, Brisbane: BTQ-7 QTQ-9 TVQ-0 for example, owned a daily newspaper Fairfax Bond Skase whose main circulation was in the same area, or who already held a licence Sydney: ATN-7 TCN-9 TEN-10 for a commercial radio station which Fairfax Bond wcc had a monopoly in the service area. Existing interests held on 27 Novem­ Melbourne: HSV-7 GTV-9 ATV-10 ber, 1986 which would otherwise offend Fairfax Bond WCC the cross-ownership rules were to be "grandfathered". The Minister made it Adelaide: ADS-7 NWS-9 SAS-10 clear that future acquisitions of a Stokes Lamb Bell prescribed interest in a television licence, whether or not that licence Perth: TVW-7 STW-9 WTW-10 was "grandfathered", would require the Bell Bond Stokes new owner to conform to the cross­ ownership test. This part of the Pending the enactment of the pro­ announcement made it clear that the posed legislation these various acqui­ new package of rules was intended to sitions must be the subject of applic­ be enacted with effect from 27 Novem­ ations under s92F. ber, 1986. Until the legislation is enacted, the Tribunal would be required to The Recent Acquisitions refuse the applications unless steps were taken by the applicant to comply It is against this background with the two-station rule. Under that a whole series of acquisitions s92FAA(ll) where an applicaton for have been made. As at 27 November, approval of a transaction Is refused 1986 the three existing networks were by the Tribunal, and notice of such owned as follows:- refusal given to the applicant, the applicant has six months after the Seven Nine Ten date of service of the notice, or such Network Network Network longer period as the Tribunal, on application, allows, to dispose of Brisbane: BTQ-7 QTQ-9 TVQ-0 excess prescribed interests. The Act, Fairfax Bond Skase therefore, recognises that trans­ actions which would result in a Sydney: ATN-7 TCN-9 TEN-10 contravention of s92 may be entered Fairfax Packer NTHL into. The contravention does not itself constitute an offence under the Melbourne: HSV-7 GTV-9 ATV-10 Act. The Tribunal may, however, give HWT Packer NTHL a direction for divestiture under s92N(l) where it is satisfied that a Adelaide: ADS-7 NWS-9 SAS-10 person is the holder of interests in a HWT(18) Lamb Bell company in contravention of s92. If the circumstance arose that there was In addition STW-9 Perth, also no reasonable prospect of the relevant owned by Bond, was an affiliate member legislation being passed in the fore­ of the Nine Network. TVW-7, owned by seeable future, the Tribunal could Bell, was identified with the Seven give directions under s92(l)(a), if it Network and the proposed new station thought necessary "to ensure that the WTW-10, owned by Stokes, was identi­ person ceases to hold interests in fied with the Ten Network. that company In contravention of that -28- section". Such a direction cannot take which reach no more than 75% of Aust­ effect during any period in which the ralia's population, it is quite poss­ contravention referred to in s92N(l) ible that fairly elaborate provisions does not constitute an offence. Thus, relating to ownership and control in the direction may not be given until terms of the new limit will continue after expiration of the period of six to apply. It is to be hoped that the months after the date of service or opportunity will be taken for simpli­ notice by the Tribunal of its refusal fying and streamlining the existing to approve the transaction, or such provisions as far as possible. longer period as the Tribunal allows. It is interesting to speculate The directions when given would not how the limitation might be expressed necessarily require that the addition­ in the legislation. For example, al interest sought to be acquired by a s92(l) could be simply repealed and party following the Minister's announ­ replaced by a provision to the effect cement be the subject of divestiture. that, subject to the section, a person The divestiture could cover existing contravenes the section if, and so interests, which were held prior to long as, he has a prescribed interest the acquisition of additional pre­ in any licence or in each of two or scribed interests following the Minis­ more licences where the aggregate of ter's announcement. Alternatively, if the population in the service area of it emerged that there was no prospect that licence or those licences, as the of enactment of the legislation in the case may be, as determined by refer­ foreseeable future, application for ence to the most recent census, additional interests in excess of that exceeds 75% of the total population of permitted by the two-station rule Australia as so determined. Instead could be approved, subject to a condi­ of expressing the limit in terms of tion that any existing interests population, it would also be possible which, together with the new inter­ to express the limit in terms of audi­ ests, would be in excess of the rule, ence reach. Thus, the limitation should be disposed of. could be expressed in terms of tele­ In the period between acquisition vision homes. and the determination of any applica­ There is a real question whether tion there is, however, a difficulty the concept of prescribed interest about directorships.