2.1
As outlined in Chapter 1, the Broadcasting Legislation Amendment (2021 Measures No. 1) Bill 2021 (the bill) would amend the Broadcasting Services Act 1992 (the Broadcasting Services Act) and the Radiocommunications Act 1992 (the Radiocommunications Act).
2.2
Submissions to the inquiry demonstrated that views on the bill are broadly divided between subscription television (STV) providers who support the bill, and members of the broadcasting community, who do not.
2.3
Generally, supporters of the bill asserted that the measures outlined in the bill are necessary as provisions of the Broadcasting Services Act and the Radiocommunications Act are outdated and facilitate a disproportionate regulatory burden on STV providers. Supporters of the bill asserted that the provisions of the bill modernise current legislation and represent progress towards platform neutral regulation.
2.4
Opponents of the bill noted that whilst current legislation has created a regulatory balance between STV and streaming services, provisions need to be extended to streaming services instead of being removed or reduced for STV providers. Further, those against the bill expressed concerns that some of the provisions would have significant ramifications for those who work in the production industry, as well as Australian consumers.
2.5
This chapter presents an overview of the key issues raised by inquiry participants, including:
potential ramifications of reducing the expenditure requirement under the New Eligible Drama Expenditure Scheme (NEDE);
the impact of moving the STV captioning rules from the Broadcasting Services Act into a disallowable ministerial instrument; and
the effectiveness of the Regional and Small Publishers Innovation (RASPI) Fund.
2.6
The chapter concludes with the committee's view and recommendations.
Reduction of the expenditure requirement under the New Eligible Drama Expenditure Scheme
2.7
A key issue raised by many participants in the inquiry was the impact of the bill and its consequences for both the broadcasting industry and STV services. Schedule 1 of the bill would reduce the expenditure obligation currently outlined in section 103A of the Broadcasting Services Act. This section requires 'subscription television broadcasting licensees to ensure the maintenance of minimum levels of expenditure on new eligible drama programs'. At the time of this inquiry, the minimum level was 10 per cent of channel providers' total program expenditure in relation to a channel. The provisions of Schedule 1 would reduce the minimum level to five per cent of total program expenditure.
2.8
Several submitters voiced opposition to the proposed reduction and asserted that the scheme had previously been extremely successful in ensuring the production of Australian content. They submitted that any reduction would cause 'substantial harm' by reducing access to Australian stories and would 'damage the local independent production sector'. For example, the Australian Cinematographers Society was concerned that as 'recent levels of investment are at or about the minimum required amount', regulation has been the determining factor in causing Australian produced content to be created.
2.9
The Australian Screen Industry Guilds and Associations reiterated this concern and disputed evidence provided by Foxtel Group and ASTRA that the scheme is 'onerous':
The NEDE scheme is significantly less onerous and inherently more flexible than the mandated annual quotas placed on commercial free-to-air broadcasters under the Act. Pay TV's Australian drama spend obligation tracks with overall drama spend and business performance. A decision to invest less in drama overall results in a requirement to invest in less Australian drama.
2.10
Some submitters suggested there would be significant consequences, should the reduction in the expenditure requirement be passed:
…a reduction in the obligation will almost certainly result in less investment in Australian drama, a reduction in local employment and reduced cultural outcomes for Australian viewers of subscription television.
2.11
The Australian Cinematographers Society and the Australian Screen Sound Guild discussed the impact that domestically produced drama projects have on the industry. Specifically, offshore productions that film in Australia employ a limited number of Australians, as the writing, producing and post-production work is typically conducted in the originating country. As stated by the Australian Screen Sound Guild:
The kind of productions we're talking about here that are coming from overseas are really only employing our on-set members, our location sound recorders, which often is only two or three people on any production. The bulk of our members working on productions are working in post-production. And these offshore productions don't do post-production in Australia. They return to their country of origin, typically the US or the UK, to do that post-production work.
So, really, it's the local drama production which provides that work opportunity for our members working in post-production. So, even though we may have a bit of activity at the moment on set for some of our members, whether or not that work continues is not really the issue for us. It is actually the ongoing local production which would really support our members, long term.
2.12
Foxtel Group and ASTRA communicated 'strong support'’ for the bill to be passed urgently:
The NEDE scheme amendments proposed by the Bill are significant to the STV sector and in addition to assisting our industry respond flexibility to changing industry conditions, they will also ensure regulatory parity between commercial and subscription broadcasters with respect to local content investment requirements.
2.13
Foxtel Group and ASTRA recognised the concerns raised by individual production companies but disputed current financial obligations as the 'right way of addressing' them. Foxtel Group and ASTRA argued they had been 'significantly impacted by competition from unregulated global streaming services'. Therefore, the obligations placed upon them were no longer fit for purpose:
Given the massive shifts in the competitive landscape, we do not believe the current regulatory environment for Foxtel is sustainable. That is not good for any Australian who believes in the importance of local media companies. We believe regulation needs to be modernized to establish new settings that allow competitive local champions to succeed. Our record in both regulated and non-regulated content speaks for itself. However, we believe there are better ways to achieve public policy aims that directly support Australia's creative sector.
2.14
Foxtel Group asserted that a reduction in the drama obligation would not result in 'fewer Australian stories and voices represented' and instead would allow the organisation to invest in genres that align with consumer interests.
2.15
According to the explanatory memorandum, the reduction would lessen the 'regulatory burden on subscription television broadcasting licensees':
Current regulatory settings are no longer creating the conditions necessary to maximise the many cultural and economic benefits of Australian content. The settings are outdated and burdensome, and no longer result in the protection and promotion of quality Australian screen content. Current regulatory settings impose burdens that risk damaging the industry permanently, leading to a reduction in Australian content.
Subscription television caption rules as a disallowable ministerial instrument
2.16
Proposed section 103ZV would 'move the subscription television captioning rules from the [Broadcasting Services Act] into a disallowable Ministerial instrument'.
2.17
The Australian Communications Consumer Action Network (ACCAN) and the Centre for Inclusive Design (CFID) acknowledged that current captioning rules require reform, as they provide 'little certainty for consumers'. However, ACCAN and CFID recognised the value in such regulations being contained in primary legislation and subsequently opposed the proposed section:
[A]ny reform of the captioning requirements must remain in the [Broadcasting Services Act] to provide the greatest protection and certainty for consumers who rely on captions. We would welcome the opportunity to be involved in simplifying the conditions within the Act while ensuring that the reform still provides minimum standards as a baseline.
2.18
ACCAN brought to the committee's attention consultation undertaken in 2020 with community members who also supported the continuation of the captioning rules within the primary legislation:
We received some feedback around [audio-visual] content. A lot of that was regarding the need to have continued captioning on all broadcast television and the need to also have audio description legislated as well. So there is a real desire in the community to keep these kinds of accessibility provisions legislated in the BSA.
2.19
Specifically, CFID were concerned about potential ramifications on the hearing-impaired community, and suggested that the proposed provisions were 'very vague' about what the minister can do about caption levels. ACCAN and CFID argued that a future reduction in captioning services may be permitted under ministerial instruments, should STV providers request financial assistance in the future:
It seems to be heavily influenced by the subscription television industry. It's unclear to us what the benefits of this change would be, other than providing an easier way for the minister to change the regulations. From our perspective, that doesn't bode well for consumers. We know that, when voluntary assistive services such as audio description and captioning are not mandated, they're one of the first things to go when times get tough.
2.20
Foxtel Group and ASTRA affirmed their support for hearing impaired customers as well as proposed changes within the bill. They noted that the bill would only move the provisions into a disallowable instrument and would not amend current obligations. They did, however, raise concerns that they are disproportionately affected by these regulations compared to streaming and free-to-air television services:
…the captioning rules that apply to subscription television are onerous and very complex and place a disproportionate burden on subscription television compared to the requirements face by the free-to-air channels and OTT [Over-the-top media service] players.
In brief:
STV's captioning obligations increase across STV each financial year, both in terms of the number of channels required to caption and level at which those channels have to caption.
Our captioning targets increase at a uniform rate of 5% per annum across each channel until they reach 100%.
By 2022 all channels will be required to caption, subject to any individual exemptions (in FY20 more than 90 channels on the Foxtel platform were required to caption).
By comparison, the FTAs only have to caption 75% of one channel (100% of 6am to midnight on the primary channel) with no meaningful obligation on their multi-channels (other than a requirement to caption repeats of previously captioned programs).
2.21
Foxtel Group and ASTRA confirmed they are 'not asking to do less captioning' and their support of the amendment is to enable them to 'be flexible as to what [they] caption'. Foxtel Group noted the 'financial burden' imposed on them to meet captioning requirements, which was not placed on others in the competitive market; that is, free-to air television.
2.22
Foxtel Group and ASTRA confirmed that any update to captioning under a ministerial instrument would 'be subject to extensive public consultation before they are finalised', thus providing disability advocacy groups a mechanism to ensure the rules adequately support the hearing-impaired community. This was reiterated by the Department of Infrastructure, Transport, Regional Development and Communications (the department), which committed to 'further consultation once, and if the bill was passed on the instrument to be made'.
2.23
The addendum to the explanatory memorandum, tabled on 2 June 2021, further explored the provisions contained in Schedule 2. It states that by remaining in the primary legislation, the level of flexibility required to keep captioning requirements 'fit for purpose' could not be provided. Further, the addendum notes that by inserting the rules into delegated legislation, the community can be assured that the scheme would remain 'proportionate to the STV industry's role' and is 'adaptable to the needs of captioning users'.
2.24
The addendum also highlights proposed subsection 103ZV(2), which outlines a 'non-exhaustive list of matters' which are likely to be covered by a ministerial determination. This list acts to provide guidance to the hearing-impaired community and relevant stakeholders, and provides assurances that matters that are elements of the current regime will continue to be covered.
Regional and Small Publishers Innovation Fund
2.25
Another key issue raised by participants was the RASPI fund which would have its administrative timeline extended by proposed paragraph 205ZH(1)(c). Whilst they recognised the intent of the fund—to support public interest journalism—multiple submitters voiced concerns that the administration of the grant and the nature of successful grant recipients would not accurately reflect its intention.
2.26
In its submission, First Nations Media Australia noted that:
…the Innovation Fund has, since its inception focused on print media to the exclusion of community-controlled news outlets. Grant-making under this scheme has failed to recognise the valuable contribution that the community broadcasting sector with respect to regional and local news production.
2.27
Further, First Nations Media Australia asserted that the RASPI fund has 'not yet met the needs of First Nations media organisations':
…particularly for people who are speaking a range of Indigenous languages and need to get their news that way but also for people who don't necessarily have access to internet or where print media can be put out to people. So we want to be able to establish news rooms that can provide those essential services. The innovation fund has the potential to be able to do that, but not under the current guidelines or the way they're being administered.
2.28
The Public Interest Journalism Initiative (PIJI) submitted similar concerns regarding the fund, and voiced its opinion that further flexibility should be incorporated into the fund. PIJI also extended its support to the concerns raised by First Nations Media Australia.
2.29
The committee heard evidence from FlowFM, which had been an unsuccessful applicant to the fund. FlowFM asserted that funds that had been made available for 'regional and small companies' had instead been directed to 'larger, metropolitan publishers', while companies such as it had been rejected on 'technicalities'.
2.30
FlowFM provided further details on its rejections:
The first one was an interesting one because it was based on how we would respond to complaints. We used both the broadcasting complaints system that we use now as a broadcaster and the journalist complaints systems as our answer. Apparently, that wasn't the answer that they were seeking. On the second occasion we were knocked back because our building, which we were building and is now complete, was located in an area called Roseworthy. It's the agricultural centre of South Australia. It is a small town but with a very, very large manufacturing base. We've placed our media in the middle of that location. But because we were moving our office 12 kilometres from our broadcast licence boundary to Roseworthy from Kapunda, where our head office was, within our licence boundary, they said that we were an applicant that was applying outside of a rural area. It was deemed that Roseworthy is in the Adelaide plan for broadcasting, and so, therefore, we didn't qualify.
2.31
The experience of applicants, like FlowFM, was put to the ACMA which advised that the initial 'program guidelines' did not accommodate the circumstances of FlowFM in its second application. Following this round, the ACMA had received feedback and 'changed substantially the way in which regional boundaries were established'.
2.32
ACMA explained that the extension proposed in paragraph 205ZH(1)(c) would not change the amount of funding and would only extend its legislative authority to administer the fund beyond the original date of 30 June 2021. It noted that some of the awardees from the second and third rounds experienced difficulty in completing their projects within the original timeframe:
…some of the grantees…have come up against some pressure to deliver against their milestones, for a range of reasons. That was one of the reasons why we talked to the department about the potential for the amendment that's in the bill before the parliament. It's to give us flexibility to provide them with some additional time, as distinct from the alternative, which is that they wouldn't be able to spend that funding and it would therefore go unused.
2.33
If the RASPI deadline is not extended, ACMA advised that the remaining funds are likely to revert back to consolidated revenue.
Committee view
New Eligible Drama Expenditure Scheme
2.34
As discussed earlier in this chapter, the committee heard contested views about the NEDE Scheme.
2.35
In relation to the percentage of Australian content required by regulation, the committee considers that there will always be disagreement about the appropriate quantum of such content. This is the result of the differing roles and types of investment stakeholders have in the production and post-production processes.
2.36
The committee recognises that the government recently concluded consultation on a proposal which would require subscription video-on-demand and advertising video-on-demand services to meet an expenditure requirement of five per cent on Australian content.
2.37
The committee recognises the objective of the bill is to maximise the cultural and economic benefits of Australian content in an environment in which audiences are increasingly moving to different platforms while balancing the commercial risks and costs associated with Australian productions. As witnesses themselves recognised, companies such as Foxtel Group play a significant and important role in ensuring the continued production of Australian content in Australia. The committee supports the view, however, that there should be harmonisation across the various sectors to create a level playing field and that this would be best achieved by removing Schedule 1 at this time and expediting a response to the recently concluded negotiations on the Media Reform Green Paper that broadens the services covered by content regulations.
2.38
As discussed at paragraph 2.11, it is common for post-production work on projects filmed in Australia to occur offshore. Australia is an attractive location for film and television productions and it appears to the committee that there is an opportunity to capture post-production work from offshore projects. The committee recommends that the government consider mechanisms through which the Australian industry can capture a greater share of post-production work for film and television projects produced in Australia.
2.39
The committee recommends that Schedule 1 of the bill be withdrawn and that the Government expedites a response to the recent Media Reform Green Paper consultations and introduces measures to harmonise the regulatory framework for Australian content obligations.
2.40
The committee recommends that the Government considers mechanisms through which Australia can capture a greater share of post-production work for film and television projects produced in Australia.
Subscription television captioning as a disallowable instrument
2.41
The committee acknowledges the concerns raised about a perceived lack of consultation on the proposal for STV captioning rules to be articulated in a disallowable ministerial instrument.
2.42
The committee notes, however, that consultation occurred following the release of the Media reform green paper – modernising television regulation in Australia (green paper) on 27 November 2020. The department advised that as of 10 June 2021, 108 submissions had been received and departmental officials had met with 33 industry stakeholders.
2.43
The committee acknowledges that while consultation was not directly sought by the department in response to the bill, community consultation was conducted as part of a review into wider media reform. The committee also recognises the department's intention to conduct further consultation into the captioning rules prior to the introduction of a ministerial instrument.
Regional and Small Publishers Innovation Fund
2.44
Based on the evidence before the inquiry, the committee considers that the guidelines for the RASPI Fund are not well crafted and rather than facilitating the fund's intended purpose, frustrated it on the basis of technicalities which did not go to outcomes or value for money.
2.45
A prime example was outlined by FlowFM, a South Australian-based radio station that services western Victoria, western New South Wales and the Northern Territory as well as much of the regional and remote areas of South Australia. FlowFM moved its building from Kapunda to Roseworthy—both regional towns in South Australia that locally are considered to be part of the one geographical regional community of interest—but was as a result ineligible for RASPI funding because Roseworthy did not fall within a regional commercial licence area as defined by the department.
2.46
The committee recognises that the RASPI Fund is due to conclude on 30 June 2021. The committee recommends, however, in the event that there are future iterations of the RASPI Fund or a similar fund established in the future that a framework is developed that allows some discretion to the decision-maker where an unintended consequence arising from strict application of the funding guidelines or rules results in an outcome that is clearly inconsistent with the purpose of the fund. For example, an outcomes or effects test could be developed—in consultation with small businesses on the ground—upon which the decision-maker could rely and exercise discretion to award funding consistent with the intended outcome(s) of the fund.
2.47
The committee recommends that future iterations of the Regional and Small Publishers Innovation Fund, or similar funds established in the future, include a framework for an outcomes or effects test enabling the decision-maker to exercise discretion to award funding consistent with the intended outcome(s) of the program, despite an unintended technical non‑compliance where the applicant would in all other regards be compliant and competitive.
2.48
In conclusion, and taking into account the committee's other recommendations, the committee recommends that the Senate pass the bill.
2.49
The committee recommends that the amended bill be passed.
Senator the Hon David Fawcett
Chair