Purpose of the Bill

The purpose of the Broadcasting Services Amendment (Regional Commercial Radio and Other Measures) Bill 2020 (the Bill) is to amend the Broadcasting Services Act 1992 (the Act) to relax some elements of the local content obligations currently placed on regional commercial radio and television broadcast licensees by the Act.

Structure of the Bill

The Bill is divided into two Schedules.

Schedule 1 proposes to amend a limited number of local content provisions in the Act, which currently apply to the provision of local news and other information by regional commercial radio broadcast licensees.

Schedule 2 inserts a deeming provision into the Act, which reduces the threshold for complying with the Australian content multi-channel quota obligation that currently applies to commercial television broadcasting licensees in regional and remote licence areas.

Background

The Bill has been introduced at a moment of significant crisis in Australian media, particularly for media businesses operating in regional areas.

That crisis has a number of dimensions, but perhaps the most significant is the loss of advertising revenue which had previously sustained commercial media companies, and now flows instead to companies like Google and Facebook. This was a key finding of the Digital Platforms Inquiry, conducted by the Australian Competition and Consumer Commission (ACCC), which issued its final report in July 2019. According to that report, revenue from classified advertisements placed in Australian print media fell from $2 billion in 2001 to $200 million in 2016.[1] The same report indicates that advertising revenue for broadcast media has been more stable over the same period, but that it has declined considerably as a proportion of total national advertising expenditure.[2]

The loss of advertising revenue has been accelerated in 2020 by the COVID-19 pandemic, which led to temporary closures of production facilities, and cancellation or suspension of major sporting events.[3] The consequential impact on news production was signalled by headlines about the closure of several country newspapers, and the suspension of print editions for many more.[4]

The Government announced a support package for the media industry in April.[5] This included ‘red tape relief’ from content obligations for commercial broadcasters, release of an options paper jointly developed by Screen Australia and the Australian Communications and Media Authority (ACMA), and a fast-tracked public consultation process on ‘how to best support Australian stories on our screens in a modern, multi-platform environment’.[6]

It could be tempting to see the pandemic as the driving reason for the introduction of this Bill, given how the plight of regional media had been brought into sharp focus by extensive media coverage during March and April 2020.

However, the Bill had already been listed as being proposed for introduction in the 2020 Autumn sittings by the Department of the Prime Minister and Cabinet in early February.[7] And indeed the Explanatory Memorandum, which summarises the package of measures announced in April, makes it clear that ‘[t]he measure considered in this RIS is not affected by the Government’s announcement.’[8]

It is more appropriate to draw a direct line between the Bill and the Government’s response to the recommendations proposed by the ACCC in its 2019 Digital Platforms Inquiry: Final Report.[9]

In Chapter 4 of its Report, the ACCC recommended the Government implement a ‘harmonised media regulatory framework’ which could ensure ‘effective and consistent regulatory oversight of all entities involved in content production or delivery in Australia, including media businesses, publishers, broadcasters and digital platforms.’[10]

The Government’s response included a commitment to ‘commence a staged process to reform media regulation towards an end state of a platform-neutral regulatory framework covering both online and offline delivery of media content to Australian consumers.’[11]

The Government also committed to focusing during 2020 on a consideration of ‘the extent of Australian content obligations on free-to-air television broadcasters (including drama and children’s content), and whether there should be Australian content obligations on subscription video-on-demand services’.[12]

In early 2020 the Minister outlined the Government’s goals for 2020. He stated his expectation that the Screen Australia-ACMA options paper would include a ‘comprehensive fact base’ on current arrangements, including on the growth of streaming services in Australia and ‘the impact this is having on the Australian television sector and the content production sector, including both threats to existing business models and opportunities to meet global demand for content from the streaming sector.’[13]

Taken together, this Bill and the Screen Australia-ACMA options paper for reforming Australian content rules may be seen as two steps towards a ‘harmonised media regulatory framework’—at least in the sense that an easing of local content requirements may help shape a commercial environment that moves free-to-air media companies closer to the position currently occupied by the streaming sector.

Committee consideration

Senate Standing Committee for Selection of Bills

The Senate Standing Committee for Selection of Bills recommended that the Bill not be referred to committee for consideration.[14]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills had no comment on the Bill.[15]

Policy position of non-government parties/independents

Australian Labor Party

Tim Watts, in a second reading speech given in June 2020, indicated the Australian Labor Party will support passage of the Bill:

The bill before the House is one that the Labor Party supports. We support it not because we believe that it will solve all problems, and not because we believe that it will be a decisive intervention in addressing the issues confronting regional broadcasters—regional commercial radio broadcasters and regional television broadcasters—but because we believe that it will provide some degree of regulatory relief, and there is no reason for us to stand in the way of that.

…

The bill makes relatively minor amendments relating to local content obligations and the Australian content transmission quota. Once again, the government serves up regulatory housekeeping when major reform is needed. Once again, this government is rushing a bill through the parliament when they've been sitting on these issues for literally years. Once again, this government dithers and delays on genuine reform when the industry is crying out for uncertainty to end.

…

We won't stand in the way of relatively minor regulatory amendments to alleviate the regulatory burden on regional broadcasters, particularly in the face of concerns about the market failure of regional commercial television. But we are concerned that regional Australians are missing out as a result of this government's ongoing failure to support regional media. Indeed, the measures in the bill don't so much make things better for regional Australians as simply stop them getting worse. They press 'pause'.[16]

Australian Greens

At the time of writing, the Australian Greens have not commented directly on the substance of the amendments proposed in the Bill. They have, however, commented indirectly on the specific issue of local content rules for Australian broadcasters.

On the same day the Government announced measures to support commercial media businesses, Senator Sarah Hanson-Young asserted the need for greater regulation of local content rules, including rules that oblige streaming companies ‘to fund, invest and create Australian content or tell Australian stories.’ She stated further:

Pressured, free-to-air broadcasters may want less obligations to produce Australian shows and entertainment, but this would create mass job losses and a long-term economic downturn for everyone. Watering down Australian made content is the exact opposite of what we need right now.[17]

In a statement issued on 11 May 2020, pitching an economic stimulus to ‘recreate Australia’ and support the arts sector during COVID-19, Senator Hanson-Young stated:

The decision by the Federal Government to let broadcasters out of their local content requirements was a kick in the guts to an industry on its knees, [and] the Arts Minister must make amends.[18]

On 6 July 2020, Senator Hanson-Young called on the Government to ‘rule out killing more Australian jobs by permanently abolishing local content rules and to get on with requiring streaming giants to produce Australian-made shows.’ She added:

Letting broadcasters out of local content requirements and failing to immediately regulate streaming services put the jobs of every person who works on Australian drama, documentaries and children’s TV shows from actors, to writers, to crews at risk.[19]

Other minor parties and independents

At the time of writing it did not appear that any other minor parties or independent members of Parliament have commented on the Bill.

Position of major interest groups

At the time of writing, it did not appear that any of the key stakeholders have commented publicly on the Bill. However, the amendments proposed in the Bill do appear to resolve some of the key concerns they have expressed in recent public statements. Those concerns are registered here.

Commercial Radio Australia

Commercial Radio Australia (CRA) issued a statement on 15 April 2020, welcoming the Government’s relief package for Australian media but challenging the Government to do more for commercial radio broadcasters. In that statement the CRA indicated it had ‘opened discussions’ with the regulator on options to ‘reduce red tape’:

[W]e are disappointed that commercial radio, as the most hyper local of the mediums, has been largely overlooked in spite of its continued delivery of service to the Australian community during the pandemic, and before that, during the bushfires and the drought. Radio is an essential service and it’s vital that we are able to continue to meet local content and emergency broadcasting obligations. We have now opened discussions directly with the Australian Communications and Media Authority (ACMA) to discuss urgent action to reduce red tape and create a fairer playing field for Australian radio broadcasters so we can keep meeting our obligations to listeners and the communities we serve.[20]

On 6 May 2020, CRA CEO Joan Warner was reported on an industry website to have lobbied the Government on behalf of regional radio stations for regulatory relief from current local news and content obligations during COVID-19:

In recognition of the very real challenges being faced, the Australian Communications and Media Authority (ACMA) has to date offered to extend the due date for reporting in 2020 and to consider regulatory forbearance on a case by case basis for the 220 regional radio station members of CRA. We are continuing to have discussions with both the Minister for Communications and the ACMA to seek industry level certainty in this difficult period. Regional broadcasters have done a tremendous job of staying on air in the face of ad revenues falling, staff being stood down or asked to take leave, and in many cases being required to work from home if regional studios don’t allow the requisite social distancing. It is reasonable to expect tolerance where stations miss their local content or news quotas by a relatively small percentage as a result of the coronavirus. These stations have delivered hyper local news and content for many years and will continue to do so when the crisis has passed, but we need a commitment to a sensible and practical level of regulatory forbearance in the interim to help us through this crisis.[21]

Free TV

In a statement issued on 14 April 2020, Free TV claimed that in the context of the COVID-19 crisis, ‘the most immediate issue is to recognise that commercial networks will be unable to meet their Australian quota obligations while there is no sport being broadcast and very little local drama or reality TV being produced.’[22]

Free TV welcomed the Government’s COVID-19 relief package, but raised concerns about the 55% Australian content requirement imposed on commercial television broadcast licensees.

[T]he suspension of content quotas for 2020, waiver of spectrum fees and support for regional journalism are very positive for the immediate pressures being experienced by the industry. However the ongoing requirement to meet the overall 55% Australian content quota remains a concern for the industry in an environment where there is less sport, drama and entertainment programming available due to the suspension or cancellation of many productions.[23]

Media, Entertainment & Arts Alliance

The Media, Entertainment & Arts Alliance (MEAA) welcomed the announcement on 15 April 2020 of the Government’s relief package for regional media, but did not comment specifically on the proposal to amend local content obligations of broadcasters for 2020.[24] Earlier in the year, just prior to the onset of the COVID-19 pandemic, the MEAA called on the Government to resist calls by commercial media companies for a relaxation of local content rules.

The Morrison Government must stand up for Australian kids and local audiences and reject a renewed push by free to air television networks to scrap local and children’s content requirements. Without these requirements, Australian children could be fed a steady diet of American and British programming and never hear their own accents on television. Seven West Media’s reported threats to stop producing new stories for Australian kids and audiences of all ages are a blatant bid to pressure the government to give in to their demands to abandon local content quotas. MEAA chief executive Paul Murphy said the content regulations were necessary to ensure Australian stories were told on Australian screens, and must be extended to digital platforms and streaming video on demand services like Netflix, Amazon Prime, and Apple TV Plus.[25]

Screen Producers Australia

Screen Producers Australia (SPA) issued a statement on 15 April 2020, expressing ‘deep concern’ about the Government’s announcement of a suspension of Australian content quotas for 2020.[26] It argued the decision had the potential to ‘cripple Australia’s production industry’ and could limit the opportunities for a rebound for much of the sector ‘at a time when it is facing a very real battle for survival.’[27]

The SPA also argued:

… there is a significant amount of quota content already completed and sitting with the broadcasters (or soon to be delivered). We have surveyed our members and determined that there is a substantial amount of content ready to go on free-to-air television this year. A complete suspension of the quotas in 2020 is disproportionate to the actual level of disruption to the supply pipeline.[28]

Furthermore, the SPA described a complete suspension as a ‘very blunt tool’, given that some forms of production are still able to be commissioned, including animation and documentary. They claimed that a total suspension of commissioning activity would cancel demand for productions that would have been crucial in keeping media workers in jobs during the shutdown. SPA suggested instead that the Government engineer a ‘temporary averaging flexibility’, which would give broadcasters relief for the coming year, but which should be:

… contingent on the overall obligations being acquitted across the coming years when production activity can return. This would ensure demand returns to the system at levels sufficient to get the sector back on its feet and able to pump out productions and employ large numbers of people.[29]

Financial implications

The amendments proposed in the Bill are not expected to have any financial implications, as any impact will be met from existing appropriations.[30]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.[31] The Government considers the Bill is compatible, stating that it reduces the regulatory and compliance obligations placed on licensees, and as such ‘is consistent with Article 19 of the [International Covenant on Civil and Political Rights] ICCPR by allowing licensees to focus their limited resources on improving the quality of the local content and information services they offer. This in turn enables better access to content relevant to regional and remote audience’s interests.’[32]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights had no comment on the Bill.[33]

Key issues and provisions

While the specific local content obligations placed by the Act on commercial broadcasters are complex, the objective of the Act in this respect is clear. It defines that objective, from the outset, as being to ‘promote the role of broadcasting services in developing and reflecting a sense of Australian identity, character and cultural diversity’.[34]

For radio licensees this translates into rules about broadcasting ‘material of local significance’, as per section 43C, including regular local news, weather, community information and emergency service broadcasts.

For television broadcast licensees the objective is achieved through a ‘transmission quota’, defined in section 121G, which specifies an amount of time that must be allocated to ‘Australian programs’.

As already noted, the objective of the Bill is to relax some elements of the local content obligations currently placed on regional commercial radio and television broadcast licensees by the Act.

The key proposals are outlined below.

Local content exemption period (radio)

The Act currently grants regional radio broadcasters a period of five weeks each year during which they are exempt from local content obligations and minimum service standards.[35] The default period includes the Christmas and New Year holidays; however, the ACMA may specify a different exemption period (either in relation to a specified licensee or more generally) by way of legislative instrument.[36]

Proposed section 8AE, inserted by item 4 of Schedule 1, proposes a more flexible local content exemption period, which applies to both local content obligations and minimum service standards. The provision allows for the exemption period to be split into two periods, equalling five weeks in total. In addition to the ACMA’s power to specify a period (or periods) in a legislative instrument, under the amendment a licensee has the power to specify their own exemption period (or two periods not exceeding a total of five weeks) by giving written notice to the ACMA.[37]

The aim is to provide licensees with greater flexibility in developing staffing and other arrangements for covering public holidays other than those occurring during Christmas and New Year.[38]

Minimum standards for news and weather

Items 10–14 of Schedule 1 propose to redefine the meaning of eligible local news and weather bulletins, and to reset minimum service standards for those bulletins.

The Act currently defines ‘eligible’ local news and weather bulletins as broadcast ‘on at least 5 days during the week’, and as ‘regularly scheduled’.[39] These definitions are then used in the current specification of minimum service standards for both local news and weather.[40]

This is different from the requirement in section 43C that licensees broadcast ‘material of local significance’ during daylight hours on ‘each business day’. In other words, while the minimum service standard currently applies five days each week, ‘material of local significance’ need only be broadcast on days that are not weekends or public holidays.[41]

Items 10 and 11 amend the definitions of eligible local news bulletins and eligible local weather bulletins, respectively, to remove references to broadcast frequency or duration requirements. Item 14 repeals and substitutes sections 61CD and 61CE to amend the requirements relating to minimum service standards, including through the introduction of new business day minimum service standards.

The proposed amendments will allow licensees to average out their local news bulletins, counting and recording them against a weekly minimum service standard of 62.5 minutes per week.[42] They will be required to broadcast local news and weather bulletins on each business day.[43] Again, the intention here is to release licensees from the obligation to broadcast on public holidays. The Explanatory Memorandum makes this clear:

This [current] definition [of news bulletin] may frustrate the policy intent of allowing regional commercial radio broadcasting licensees with the flexibility not to satisfy the minimum service standards on public holidays.[44]

The Bill does not substantively change the standards for the broadcasting of other local content, including community service announcements and emergency warnings.

Local content plans for ‘trigger event’ licensees (radio)

As noted above, existing section 43C requires regional radio broadcast licensees to provide ‘material of local significance’ as a condition of their licence. Material of local significance is in turn defined by a legislative instrument:

The three ways in which a licensee may meet the obligation to broadcast material of local significance is by broadcasting, during daytime hours on business days, material which is ‘produced in the licence area’, ‘hosted in the licence area’ or ‘relat[ed] to the licence area’.[45]

The Explanatory Statement to the instrument explains that it removed an earlier requirement, imposed by section 11 of the previous Licence Condition,[46] that licensees provide written local content statements to the ACMA. Instead, under the current instrument, licensees are required ‘to have a current program schedule indicating ‘material of local significance’ which will either be kept on a licensee’s website or made available on request’.[47]

The rationale for the removal of the earlier obligation to supply local content statements to the ACMA was ‘to reduce the compliance cost burden for regional radio licensees while retaining the provision of local content information for the public on when local content is broadcast by the licensee’.[48]

However, where ownership or control of a licence has changed, Division 5C of Part 5 of the Act currently requires the licensee to prepare and submit a detailed local content plan, for approval by the ACMA, and imposes a range of obligations concerning the review and variation of that plan.[49]

Item 15 of Schedule 1 proposes to amend that obligation, and therefore to simplify the process of program content scheduling for licence holders who have taken, or will take, control of a regional radio broadcast licence.

Under proposed section 61CF, rather than being required to give the ACMA a local content plan, those licensees will instead be required to do what other licensees already do: namely, prepare and publish, or provide on request, a local content statement which identifies the material that will be broadcast in order to meet the minimum service standards for news and weather. Unlike the existing provisions, there is no requirement for the ACMA to approve the statement, and no public register of approvals. Under proposed section 61CG, licensees will also be required to inform the ACMA about how they will comply with minimum service standards for emergency warnings.

This clearly fits with the ‘flexibility’ agenda of the Bill, making it easier for new/changed licensees to vary their programming at short notice, rather than be held fast to agreed arrangements, as long as they meet the minimum service standards already described above.

Repealing the three yearly review of local content (radio)

Item 16 of Schedule 1 proposes to repeal section 61CT, in order to remove the need for the Minister to cause a review of the local content obligations placed on regional radio broadcast licensees, which is currently required at least once every three years.

The Explanatory Memorandum states that the proposal rests on the fact that ‘Government continuously monitors and reviews the local content framework for regional commercial radio licensees to ensure that it remains fit for purpose’, and that industry and audience stakeholders will ‘continue to be able to submit requests to the Government, seeking to review aspects of the framework which may no longer be fit for purpose.’[50]

Deemed compliance with multi-channel content quota (television)

The Act does not currently differentiate between metropolitan and regional broadcasters, in terms of the amount of Australian programming that must be broadcast by a licensee. It does, however, distinguish between obligations to provide local content on primary as opposed to multi-channel television services. This is the distinction between, for example, the Nine Network’s primary channel Nine and its multi-channels Gem, GO!, Life and Rush.

Subsection 121G(2) of the Act currently requires all commercial television broadcasting licensees to ensure that the total number of hours of Australian programs transmitted on multi-channels is ‘not less than 1,460’ between 6am and midnight each year.[51]

The Explanatory Memorandum explains that regional television broadcast licensees (Prime Media Group, Southern Cross Austereo and WIN Corp) have affiliation agreements with metropolitan television broadcasters, from whom they source their content. It provides a detailed explanation of the commercial challenges currently facing regional licensees:

These licensees are facing increasingly difficult advertising markets, and continuously increasing transmission costs. Further, because of the vast geographic areas covered by the typical licences of remote commercial television broadcasters, there are very few population centres from which to derive advertising revenue. This revenue from more populated areas could normally be used by licensees to subsidise transmission costs to cover the remainder of the licence area.[52]

The Australian Financial Review put the situation succinctly:

Regional broadcasters are highly reliant on their affiliate partners for content, but do not necessarily broadcast all the corresponding multi-channels. This makes it harder to comply with an hours-based quota because metro networks spread the content requirement across more channels, therefore reducing what each multi-channel contributes to meeting the quota.[53]

The Explanatory Memorandum also notes that 19 per cent of all regional licensees were not able to comply with section 121G in 2017, and goes on to make an argument that the current situation is no longer acceptable:

Non-compliance with the multi-channel quota could result in a breach of a licence condition. Remedies available to the ACMA for a breach of this licence condition, assuming regulatory forbearance is no longer an option, include accepting measures by licensees to improve compliance, accepting enforceable undertakings, issuing remedial directions, suspending or [cancelling] a licence. These would be significant consequences for a regional or remote commercial television broadcasting licensee to face for actions that it may have limited control over.[54]

In order to remedy this situation, Schedule 2 to the Bill proposes a system of deemed compliance. Proposed section 121H, at item 2 of Schedule 2 will essentially allow regional licensees, by written notice to the ACMA, to deem themselves to have complied with subsection 121G(2) if the number of hours of Australian programs they broadcast is not less than the number of hours of Australian programs broadcast on the corresponding metropolitan multi-channel. The ACMA must publish such a notice on its website.[55]