e4flTEt~~fl2’nt-e~R1 ~ ~‘-; J ‘‘ I 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