Chapter 2
Key issues regarding the bill
2.1
As mentioned in Chapter 1, numerous submitters voiced their opposition
to the anti-siphoning scheme because it is, in their view, anti-competitive but
at the same time acknowledged the need for such a scheme.[1]
During the course of the inquiry, various stakeholders raised issues about some
aspects of the bill, including:
-
designated groups and the quota group mechanism;
-
de-listing of events, in particular AFL and NRL games;
-
the definition of 'live' and exemptions from the coverage
obligations;
- the must offer provisions and their impact on commercial
negotiations;
-
the right to televise an anti-siphoning event in part (highlight
packages);
-
the application of the anti-siphoning scheme to content service
(new media) providers;
- the notification requirements, in particular the requirement to
notify of rights no longer held;
-
ministerial discretion; and
-
the timing of the proposed statutory review.
2.2
These issues are discussed in the following sections.
Listing and de-listing
2.3
Some submitters to the inquiry expressed concerns about the treatment of
designated group and quota group events, as well as the de-listing of some anti-siphoning
events. These issues are discussed below.
Designated groups
2.4
The bill would enable the minister 'to determine the circumstances in
which multiple simultaneously and consecutively occurring Tier B anti-siphoning
events would be broadcast on free-to-air television'.[2]
As outlined in Chapter 1, this is the "designated group mechanism"
and is intended to deal with events such as the Olympic and Commonwealth Games
where each day of the event can exceed 12 hours duration or involves multiple
simultaneously occurring contests and it would be impractical for a broadcaster
to televise the event in full in order to fulfil their coverage obligations.[3]
2.5
The International Olympic Committee (IOC) and FOXTEL raised concerns
about the designated group mechanism. The IOC noted that the explanatory
memorandum specifically identifies the Summer and Winter Olympic Games as
examples of events that may be determined to be a designated event.[4]
The IOC was concerned, however, that there was no certainty that the Olympic
Games would be declared a designated group:
The IOC assumes the Minister intends to declare the Summer
and Winter Olympics after the 2012 Olympic Games to be a designated group. If
this does not occur, the capacity constraints will mean that the Bill is simply
unworkable in respect of the Olympic Games. However, there is presently no
certainty for the IOC that a declaration will actually be made.[5]
2.6
FOXTEL was similarly concerned about which events would be declared
designated group events as well as the total minimum number of hours
free-to-air broadcasters would be required to televise of each designated
event.[6]
FOXTEL opined that the minimum number of hours for multi-round events such as
the Olympic Games 'should not be too high':
In FOXTEL’s view it is critical that in calculating the
number of hours in each designated group the Government use the actual number
of hours of original content broadcast—and excludes from its calculation
advertising, recaps and news breaks always contained in any one hour of such
multi-round broadcasts.
If this is not done it will lead to the unintended consequence
of [free-to-air] broadcasters having to broadcast events on their second
channel, in order to comply with the ‘must broadcast’ obligation, that they
would not otherwise broadcast. This will have flow-on effects for [subscription
television] in terms of how the broadcast rights would be typically split for
such events.[7]
Quota groups
2.7
The bill proposes to enable the minister to determine that certain Tier
B events comprise a quota group, and subsequently whether that quota group is a
Category A quota group or a Category B quota group.[8]
Category A quota groups would comprise solely of a numerical quota—the 'quota
number' (that is, the number of events that must be made available on
free-to-air television)—while Category B quota groups would comprise a quota
number and qualitative conditions known as 'associated set conditions'.[9]
2.8
The bill would require a quota number not greater than four for a quota
group containing matches in the AFL Premiership competition and not greater
than three for matches in the NRL Premiership competition.[10]
2.9
The quota group mechanism '...is designed to deal with, and is limited
to, the multi-round inter-state competitions of the AFL Premiership and NRL
Premiership'.[11]
2.10
The Australian Football League (AFL) was concerned about the application
of the Category B quota group mechanism to certain rounds of the AFL Premiership
competition. The AFL suggested that a quota number of four was inappropriate in
cases where there was a split round or a round where fewer than nine games are
played:
From time to time, AFL will conduct a round over a period of
two weeks (for example, round 1 of the 2012 Season). The legislative instrument
needs to accommodate this situation and avoid fettering the AFL’s ability to
schedule its matches and provide for broadcast of 4 matches on free-to-air
television during a split round.
...
In a season the AFL may schedule some Premiership Season
rounds of less than 9 matches. For example, rounds 11, 12 and 13 in 2012 will
each feature 6 matches. These rounds contain less than 9 matches because it
enables the AFL Clubs competing in the AFL Competition to enjoy a bye (a week
without a match) without the AFL schedule requiring a full week without any
matches being played. In effect, 2 rounds of 9 matches are spread across 3
rounds, with each of the 18 Clubs playing 2 matches across the 3 rounds.
In these rounds, less than 4 matches in each round will be
broadcast on free-to-air television (however 8 matches of the 18 across those 3
rounds will be broadcast on free-to-air television). Accordingly, the
legislative instrument needs to be amended to recognise this broadcasting and
scheduling reality.[12]
2.11
The AFL also raised the associated set conditions which may be applied
to Category B quota groups, as did Free TV Australia.[13]
The AFL was of the view that it was best placed to decide which AFL games are
"quality" games:
We have an equalised competition which is cyclical and what
are the best matches—a term used regularly in the context of these
negotiations—is best determined by us. What is the best game depends on where
you live. If you live in Western Australia, you will have a different view as
opposed to those living in South Australia or Melbourne. You would also have a
different view if you are a coach of a club as opposed to CEO of a
club—football versus commercial interests. You would also have a different view
if you are a player about what you would want out of your fixture. We
maintain—and I think we have a track record over the last 10 years—a clear view
of what are appropriate games to put on free-to-air television. We are [a] mass-market
code and there are a series of things which need to be considered in
determining which games are shown in which slots and on what platform. We
certainly think we are in the best position to do that and to balance the needs
of players, travel loads, club issues commercial issues and football issues.[14]
2.12
Free TV Australia was concerned that the bill did 'not provide
sufficient guarantees to ensure that the best games are not siphoned [to] pay
TV'.[15]
Ms Julie Flynn, Chief Executive Officer of Free TV Australia, noted
statements by the minister that "blockbuster" games, such as Friday
and Saturday night games, would remain on free-to-air television. However, Free
TV Australia wanted this explicitly in the bill:
When the minister first announced these changes in November
2010, he said, for instance:
"However, the Government will put in place a mechanism
to:
Protect the quality of games on free-to-air television,
ensure that Friday and Saturday night games remain ‘blockbuster games’ in the
round..."
Then he went on to say:
"We've got commitments from the AFL that the Friday
night game is the best game, the Saturday night game is the second-best game."
There is no evidence of that that we can see in the drafting.
...
So our concern is that these rules need to be in place to
ensure that those games do not suddenly get siphoned off. Bear in mind that we
have access to only four games in every round; we do not have access to all
games in every round.[16]
2.13
Tennis Australia raised a different concern about the quota group
mechanism, questioning why it was limited to competitions of the AFL and NRL. Tennis
Australia proposed that the quota group mechanism be extended to the Australian
Open so that the new anti-siphoning scheme did not result in a perverse outcome
where less, rather than more, tennis would be shown on television:[17]
The proposed bill creates an exception for the AFL and the
NRL. The exception is called the 'quota group' and it is set out in section
145G. Tennis Australia submits that this exception should be applied to the
Australian Open and other applicable sporting events because there is simply
more Australian Open match content available than can be possibly broadcast by
a free-to-air broadcaster. To confirm, Tennis Australia believes that the
introduction of the quota group mechanism is an important and sensible
legislative initiative. However, we do not believe that it is equitable to
permit this mechanism to be applied to only two sports and we cannot identify
any objective criteria or compelling policy rationale for doing so. Tennis
Australia is prepared, like the other sports, to commit to guaranteeing
free-to-air coverage of parts of the Australian Open to ensure that the most
important matches remain on free-to-air television. However, the remainder of
the Australian Open should be removed from the list and excluded using the same
exceptions afforded to the AFL and the NRL.[18]
2.14
To address some of the concerns raised about the content of the
anti-siphoning list and the quota groups, the Department of Broadband,
Communications and the Digital Economy (DBCDE) provided the Committee with a
draft of the anti-siphoning list comprising Tier A and Tier B events as well as
a draft of the Category B quota groups determination, including the associated
set conditions for each AFL premiership quota group. These are attached at Appendix
3.
De-listing
2.15
As outlined in Chapter 1, the bill would provide for the de-listing of
anti-siphoning events 4368 (182 days) before the start of the event, where the
event is in a designated group, or in the case of the AFL and NRL premiership
competitions, 4368 hours (182 days) before the start of the first event in the
competition, for the purposes of the acquisition of broadcast rights by
subscription television broadcasters and the conferral of rights on content
service providers.[19]
The bill would also enable the minister to further extend this period to 8736
hours (364 days) for AFL and NRL competitions.[20]
2.16
Sporting organisations and broadcasters alike raised the de-listing provisions
during the course of the inquiry. The AFL and NRL were supportive of their
events being delisted 364 days (52 weeks) rather than 182 days prior to their
commencement.[21]
The AFL stated its preference to have the '52-week delisting period...hard-wired
into the bill, not left to ministerial discretion in a legislative instrument'.[22]
2.17
With respect to the de-listing of anti-siphoning events that are not AFL
or NRL games, the SBS felt that the proposed timing of 26 weeks prior to an
event 'leaves a very small window of opportunity, and for some matches no
opportunity at all, to acquire the rights'.[23]
The SBS indicated its desire 'to acquire the rights to televise the Socceroos
qualifiers' but suggested that the de-listing period as proposed in the bill
would hamper its efforts to do so.[24]
Further, the SBS was concerned that if the de-listing period remained at 26 weeks
it would '...have to rely on the Minister to determine an appropriate delisting
time under section 145E(d) or determining an alternative delisting time under
section 145E(f)'.[25]
2.18
As an alternative, the SBS recommended that:
A better way of dealing with these situations would be to
specify an appropriate delisting period which allows for a reasonable
opportunity to acquire the rights to the event counting back from the date on
which the rights holders are known.[26]
2.19
In response to the AFL's concerns, DBCDE stated:
The AFL appears to be seeking an outcome whereby the
automatic delisting of a particular AFL Premiership season applies to
additional seasons occurring in the future. This is not how the delisting
provisions will operate, or are intended to operate.
...
The anti-siphoning scheme does not restrict the acquisition
of rights to events not on the anti-siphoning list. This includes events
removed from the list, provided acquisition takes place after their removal.
Based on the above expectations about the composition of the future
anti-siphoning list, it would be open to the AFL to negotiate its next rights
deal in the period in 2016 after the 2017 competition had been delisted (under
the automatic delisting provisions). This would mean the AFL would not be
restricted by the operations of the anti-siphoning scheme for the matches in
2017. However, the anti-siphoning scheme would still apply to the 2018
competition and beyond.
It should be emphasised that these conditions are less
restrictive than those under which the current AFL rights deal was negotiated
in 2011. Nonetheless, it would be open to the AFL to request in 2016 that the
Minister remove all matches in all years covered by its proposed next rights
agreement from the anti-siphoning list. In considering that request, it could
be expected that the Minister would consider whether the proposed agreement met
expectations about the quality of free-to-air coverage of AFL matches. If matches
were removed from the anti-siphoning list in this manner, the Minister would
not be obliged to make a category A or B quota group instrument covering the
period in which those matches were played as such an instrument would no longer
be necessary.[27]
Committee view
2.20
In regards to the quota group mechanism, the Committee accepts Tennis
Australia's concern that the new anti-siphoning scheme may unintentionally prevent
more live tennis being seen on television in Australia, albeit subscription
television.
2.21
As such, the Committee sees merit in Tennis Australia's suggestion that
the quota group mechanism be expanded to include the Australian Open so that
certain content from this tournament is available to subscription television
broadcasters, whilst ensuring that key matches remain on the Tier A
anti-siphoning event list and available on free-to-air television. The Committee
therefore recommends that the Commonwealth Government consider amending the
bill so that, if and where appropriate, the quota group mechanism can be
applied to specified sporting events in addition to the AFL and NRL premiership
competitions.
Recommendation 1
2.22
The Committee recommends that the Commonwealth Government
consider amending the bill so that, if and where appropriate, the quota group
mechanism can be applied to specified sporting events in addition to the AFL
and NRL premiership competitions.
Coverage obligations
2.23
Some of the coverage obligations proposed in the bill were the subject
of debate during the inquiry. These are discussed in the following sections.
Definition of live
2.24
The bill defines 'live' coverage for Tier A anti-siphoning events as
'with no delay' or 'with as short a delay as is technically feasible'.[28]
For Tier B events, live is defined as 'with no delay' or 'with a delayed
starting time of not more than 24 hours'.[29]
2.25
For Tier B events that are not in designated a group, the bill would
accommodate televising 'live' with a delay in coverage of up to four hours,
depending on the type of event.[30]
2.26
During the course of the inquiry, sporting organisations expressed
different views about the definitions of live proposed in the bill. The AFL was
supportive of the flexibility provided in the bill to enable AFL games to be
broadcast with up to four hours delay, as this would assist the AFL to obtain
the 'maximum television audience'.[31]
The NRL shared this view.[32]
Cricket Australia voiced its support for the definition of live for Tier A
events but was concerned by some of the exemptions to the coverage obligations:
Cricket is always broadcast live and substantially in full
and we want to see that continue. We like the definition of live as it stands
for tier A events and we acknowledge that it also includes or extends to an
in-full concept is well. The issue we have, which we would like some clarity
around, is that there is an ability for the Australian Communications and Media
Authority to prospectively say that a free-to-air broadcaster has broadcast an
event live and in full when in fact there have been interruptions or other
breaks in their coverage. To our mind, we would like the guiding principles in
the act to be for the ACMA to take into consideration where those events
occurred to be tightened up. We think if the event is good enough to be on tier
A and the principles are that it is live and in full, that there should not be
broad exceptions or a broad discretion for the regulatory body to prospectively
deem something to be live and in full. It should be live and in full—it is as
simple as that.[33]
2.27
As a result, Cricket Australia submitted that exemptions from the
coverage obligations applicable to Tier A events should not be left to
ministerial discretion but rather '[i]f the exceptions are retained in the
Bill, a full replay should immediately follow the News Bulletin or other listed
events with no exceptions'.[34]
2.28
Tennis Australia indicated that sporting organisations have differing
views about what constitutes live coverage and remarked that the inherent value
in sporting events was that 'people want to see events live'.[35]
Must offer arrangements
2.29
Some submitters expressed concerns about the provisions in the bill that
would require free-to-air broadcasters to offer to other free-to-air
broadcasters, and subsequently subscription television broadcasters, rights
they had acquired but are unable to meet the relevant coverage obligations for
a nominal consideration of $1.[36]
2.30
Free TV Australia opposed the must offer arrangements, stating:
The $1 must offer scheme is just impractical and does not
understand the nature of sporting rights and how they are located. I am sure
there was not anyone sitting at this table who would have been prepared to do a
deal with a free-to-air broadcaster on the understanding that you could then
pass on the rights to anyone you chose for a dollar.[37]
2.31
Free TV Australia outlined a number of reasons why it believed these
provisions would be 'unworkable', including that broadcasters do not own the
rights they acquire and therefore do not have an unfettered right to deal with
the rights in any manner they so choose and that broadcasters are 'subject at
all times to the requirements of upstream licensors and the scope of the
licence granted to the broadcaster by the principal licensor to whom the broadcaster
is contractually bound'.[38]
Free TV Australia proffered that anti-hoarding could instead be prevented:
...if section 145H(3) simply provided that a free-to-air broadcaster
would not be in breach of its coverage obligations where it arranged for another
free-to-air broadcaster to televise the event. The provision does not need to
lay out the terms of supply because failure by a broadcaster to transfer
coverage rights would lead to a breach of its licence condition. This can
result in a range of sanctions including a substantial penalty of up to
$220,000.[39]
2.32
Tennis Australia and Cricket Australia agreed with Free TV Australia's
assertion that the must offer arrangements would undermine sporting
organisations' ability to control their broadcast rights.[40]
Tennis Australia stated:
Tennis Australia does not object to the principle
underpinning the “must offer” scheme, but we do maintain that the sporting
organisations themselves (not FTA broadcasters) should retain control of, or be
meaningfully in involved in, the process of granting broadcast rights to their
sporting events. In the in the event that a FTA broadcaster elects not to
televise a listed event, the sporting organisation that owns that event should
have the opportunity to deal directly with Pay TV and FTA providers to ensure
that, given the possible short timeframe, their event is televised and
available to Australian television audiences. This “must-offer” scheme is also
potentially inconsistent with the contracts agreed between sporting
organisations and FTA broadcasters (including assignment and subcontracting
clauses).[41]
2.33
Subscription television broadcasters were supportive of measures to
prevent hoarding by free-to-air broadcasters[42]
but argued the must offer provisions could have an adverse impact on commercial
negotiations and may be susceptible to "gaming" by free-to-air
broadcasters.[43]
Fox Sports claimed that the must offer provisions would entrench:
...the opportunity for free-to-air broadcasters to manipulate
the acquisition process to ensure their exclusive access to the rights to
broadcast anti-siphoning events, at the expense of sporting bodies who may wish
to secure coverage of their events via other media.
This is because the proposed framework operates to provide
free-to-air broadcasters with not only two opportunities to acquire rights
before subscription television and content service providers are able to
acquire any rights to the event, but also the opportunity to acquire the rights
for a token $1.[44]
2.34
With respect to the must offer for $1 arrangement, the department explained
that this was '[o]ne of the central tenets of the anti-siphoning regime as it
is proposed in the bill' and would be such a disincentive to hoard that the
provision would not be used.[45]
Dr Simon Pelling, First Assistant Secretary, Broadcasting and Digital
Switchover Group, DBCDE continued:
We would assume that when people buy rights they buy them to
show them. That would be the normal course of business. But there may be
circumstances where somebody acquires the right to televise but then for various
reasons cannot show it...what happens once you reach the 120 days is some
fairly tough provisions kick in that say you have to do something with those
rights now. The whole objective is to make sure that those rights are available
to the public or to maximise the opportunity for those rights to be available
to the public, so you have to put it on the table for a peppercorn rent and
give other free-to-air broadcasters the chance to do that.
That is done quite deliberately because what you do not want
is to have any barriers in the way such as financial barriers. You do not want
people to game the system and say, "Oh, nobody took it up because we
offered it for an enormous price." Having said that, of course, nothing
stops a broadcaster negotiating in advance of the 120 days to sell the rights
on normal commercial terms with anybody, including a subscription broadcaster.
So, if well before the event they knew they were not going to be able to show
it, they could go negotiate with other free-to-air broadcasters or a subscription
broadcaster and say: "Here's a package of rights. Can we work out a deal
and a price for those rights?" Why a subscription broadcaster would do
that might be because they have said: "This is a very valuable set of
rights. We'd like to get it. If we wait till it comes to us at the end of the
peppercorn rent period then there is a good chance we might not ever get those
rights because somebody else may have taken it up".[46]
Committee view
2.35
In regard to the must offer arrangements, the Committee agrees with the
department's position that these provisions will be a sufficient disincentive
so as to deter free-to-air broadcasters from deliberately hoarding broadcast
rights. If this proves not to be the case, the proposed statutory review of the
anti-siphoning regime before 31 December 2014 will provide an opportunity to
critically examine this aspect of the scheme.
Right to televise an anti-siphoning event in part (highlights packages)
2.36
Section 145ZN of the bill proposes to limit the circumstances in which
subscription television broadcasters can acquire the right to televise
anti-siphoning events. In particular, subscription television broadcasters
would be prevented from acquiring the rights to televise an anti-siphoning
event unless a national or free-to-air television broadcaster has the right to
televise 'the whole or a part' of that event.[47]
2.37
The ability of subscription television broadcasters to acquire rights
for an anti-siphoning event when free-to-air broadcasters had only acquired the
right to televise that event in part was of concern to Free TV Australia. Ms
Julie Flynn of Free TV Australia remarked:
The determination that a highlights package qualifies as
free-to-air coverage in our view undermines the intent of the act. Viewers
expect that free-to-air coverage means more than a highlights package and
previous court rulings also support this position.[48]
2.38
Free TV Australia claimed international experience demonstrated 'that
major sporting events move to pay TV once regulatory protections are removed or
relaxed':
The experience in the UK serves as a powerful example of the
detrimental effects of allowing a highlights package to qualify as coverage of
a significant sporting event. Any relaxation of the regulatory protections will
inevitably result in the migration of sport to pay TV and a significant overall
reduction in Australians seeing these events.
Limited highlights coverage of a listed event on free-to-air
should not remove the prohibition on pay TV acquiring rights to that listed
event. If enacted in its current form, section 145ZN may result in less rather
than more free-to-air coverage of listed events, as seen in the UK.
This can be remedied by amending the relevant provision so
that the prohibition on acquisition of rights to the event applies, unless a
national or commercial free-to-air television broadcaster has acquired “a
substantial proportion” of the event. The amendment should replace “in whole or
part” in sections 145ZN(1)(a) and (b) with the words “a substantial
proportion”. The wording “a substantial proportion” will also encompass the whole
of the event. A similar approach should be taken in sections 145ZN(2) and (3),
and 145ZO (in relation to content service providers).[49]
2.39
Sporting organisations, such as the AFL, NRL and Tennis Australia, emphasised
the importance of free-to-air television to their sports and rejected the claim
that less of their sports would be shown on free-to-air television in the
future.[50]
Mr Gillon McLachlan of the AFL and Mr Tim Browne of Tennis Australia summarised
these views:
Mr McLachlan: ...I think it would be an extraordinary
day when our sport in that context would ever sell all of our games to pay
television. [All I] can say is that we are on record as saying that we have a
position that we would always see four games of football on free-to-air
television.
Mr Browne: If I could just confirm that we are in the
same position. Free-to-air is essential. Our free-to-air broadcaster, it should
be noted, does a fantastic job of showcasing our event to Australia and around
the world.[51]
2.40
The department explained that the provisions in the bill allowing a
broadcaster to televise an anti-siphoning event in whole or in part were
intended to provide flexibility and enable rights holders and broadcasters to
freely negotiate packages of broadcasting rights:
Generally speaking, there is a great deal of flexibility for
people to decide how they want to package their rights. It does not say that
you have to package it in a particular way. Essentially, what the bill does is
talk about rights being made available. It allows for people to have the whole
of or part of a right. That would certainly include what might be called a
highlights package, although I imagine that there are different ways you could
do a highlights package, and that is not inconsistent with the provisions of
the bill. Basically it means that, if a free-to-air broadcaster and a rights
holder are able to come to an agreement about how a particular set of rights is
packaged and the agreement is that the free-to-air broadcaster wants this
particular set of highlights or key points in the game or whatever, then that
is a perfectly legitimate thing for them to do. Having done that, that means
that the right to televise is acquired, which then releases the rights in terms
of the things that the subscription broadcasters can do to them. So certainly a
package of rights can be dealt with in this way.[52]
Application of the scheme to content service providers
2.41
As mentioned in Chapter 1, the bill would, for the first time, extend
the anti-siphoning regime to content service providers, for use online or on
mobile devices such as mobile phones. Telstra and Cricket Australia opposed the
application of the anti-siphoning scheme to content service providers on the
basis this was unnecessary[53]
and, in Testra's opinion, 'there is no evidence that deleterious siphoning to
new media has occurred or will occur in the foreseeable future'.[54]
Cricket Australia claimed that extending the anti-siphoning regime to new media
would 'artificially [hinder] convergence and innovation via unnecessary
regulatory interference and should therefore be removed from the Bill'.[55]
2.42
Other submitters, however, were supportive of the anti-siphoning regime
being applied to content service providers and wanted to see these provisions
strengthened.[56]
Both SBS and Free TV Australia wanted the provisions extended so that they
captured events that occur outside Australia.[57]
SBS explained:
The requirement that the event occur "in Australia"
is too limited and introduces a further tier of lesser protection for events
occurring outside Australia. In SBS’s view, if an event has qualified for the
list, it should qualify to ensure that it cannot be siphoned by either a
subscription television broadcasting licensee or a content service provider.
For example the current drafting would mean that a Socceroos match in Australia
would be potentially protected from siphoning by an IPTV provider but not one
played overseas, even if a World Cup match – a distinction unlikely to be appreciated
by SBS’s viewers.[58]
2.43
Despite opposing the application of the anti-siphoning scheme to content
service providers, and in contrast to SBS' position, Telstra was:
...encouraged to see that the unique position of online
broadcasters has been recognised in the proposed legislation by limiting the
application of the anti-siphoning rules for content service providers to events
held in Australia. The advent of online broadcasting has caused a
paradigm-shift in the effect of domestic regulation which has not so far been
widely reflected in policy solutions. Imposing regulation on domestic online
broadcasters that cannot be enforced against offshore broadcasters places them
at a competitive disadvantage without delivering any real benefits for consumers.
The proposed legislation avoids this pitfall for events occurring outside
Australia and in that regard has Telstra’s strong support.[59]
Committee view
2.44
Given the burgeoning use of new media the Committee believes it is
appropriate for the anti-siphoning regime to take account of content service
providers. The Committee is also aware that the rapidly evolving media
landscape will likely impact on the new anti-siphoning regime and its
application to new media platforms. The proposed statutory review of the
anti-siphoning scheme is an appropriate process during which the relevance and
effectiveness of the regime in this regard can be assessed.
Notification requirements
2.45
As discussed in Chapter 1, the bill would impose notification
requirements on commercial television broadcasting licensees, national
broadcasters and program suppliers.[60]
The notification requirements imposed on broadcasters would require a
broadcaster to notify the ACMA in writing within 10 business days about any
rights to televise an anti-siphoning event that the broadcaster has acquired,
or of any rights the broadcaster ceases to hold.[61]
2.46
Free TV Australia was critical of the requirement of broadcasters to
notify the ACMA of rights no longer held within 10 days and described the
notification requirements as 'cumbersome and unnecessary'.[62]
As an alternative, Free TV Australia recommended that broadcasters be given 30
days to notify the regulator of rights no longer held or advise at the time
rights are acquired when those particular rights will cease:
An extension of 30 days is not an unreasonable ask. Our issue
about not having to notify is: what is the point of notifying when you no
longer have them? Let us just say that, at the end of five years, if the AFL
were covered and Channel 7 decided not to pursue them and another network took
them, they would have to notify you that they have them. What is the point of
that? There would be serious financial payments and penalties if you did not, yet
you have only 10 days. It is not really going to be of any concern to anyone at
the network, presumably, if they are no longer doing it...In the way it is
drafted at the moment, you have to notify within 10 days of the cessation of
the rights, so if someone makes a five-year deal and they know the end date
when they make the deal they cannot tell ACMA then. They have to wait until the
end of the deal and then they have this short 10-day window in which to notify
ACMA. If they do not do it within that 10-day window, they can be fined $55,000
a day. That is just silly, really. Why should we not be able to notify the end
date of the deal at the time we acquire the rights? That would make sense,
otherwise it is just unnecessary red tape.[63]
Committee view
2.47
The Committee considers the proposal in the bill that would require
broadcasters to notify the ACMA of rights the broadcaster has acquired within 10
days is a reasonable requirement and understands this would comprise a simple
form to complete. That said, the Committee sees merit in allowing broadcasters
to inform the ACMA of the expiration date of broadcast rights at the time those
rights are acquired (noting that further notification by broadcasters would be
required if there was any change to this expiration date). The Committee
therefore recommends that the bill be amended accordingly.
Recommendation 2
2.48
The Committee recommends that the bill is amended to enable broadcasters
to notify the Australian Communications and Media Authority (ACMA) of the
expiration date of broadcast rights at the time those rights are acquired and /
or upon any change to the expiration date.
Ministerial discretion
2.49
Throughout the inquiry, various submitters expressed concern about the discretion
afforded to the minister to make decisions under the proposed legislation.[64]
Telstra's view was indicative of these concerns:
The revised regime delivers a great deal of discretion to the
Minister to set important parameters by determination once the legislation is
passed. The effect will be to introduce unnecessary commercial uncertainty into
rights negotiations and further distort the basis on which rights are acquired...Some
degree of discretion may be necessary to accommodate future changes in the
commercial environment, but this need is closely limited by the mandatory
review to be undertaken by the end of 2014. On that basis most outstanding
parameters should either be fixed in a schedule to the legislation, or made by
determinations which cannot be varied before the regime is reviewed.[65]
2.50
FOXTEL emphasised subscription broadcasters' desire for certainty:
I think what rights holders and broadcasters are looking for
here is certainty. I think certainty is a pretty important issue. Discretions,
and this number of discretions, create uncertainty which potentially undermines
the amount subscription broadcasters are willing to pay for rights, which
ultimately reduces the funding which might otherwise flow back to the sporting
codes. It also means that sports codes lose control of their rights, as the
bill gives the minister the power to determine which events are broadcast on
free-to-air television. So, in our view, the minister should have far fewer
discretionary powers to choose what is shown and when. Broadcasters of sporting
codes really require more certainty to plan their businesses. So I implore the
committee to recommend a much more certain path forward...[66]
2.51
Whilst concerned about the extent of ministerial discretion proposed by
the bill, sporting organisations were keen to ensure that they had flexibility.
The AFL wanted flexibility around broadcasting games live;[67]
Tennis Australia wanted the flexibility afforded by the quota group mechanism
to be applied to tennis;[68]
the NRL wanted 'flexibility to be able to negotiate on commercial terms and not
have government interference in those broadcast negotiations'[69]
and Cricket Australia believed it 'should have the flexibility and the freedom
to make sensible decisions' about packaging its broadcast rights.[70]
2.52
The DBCDE acknowledged the need for flexibility in the anti-siphoning
regime and indicated the government's intention for this flexibility to create
an iterative regulatory process in which industry would be involved.[71]
Dr Pelling remarked:
...ministerial discretion is at the heart of this, and that
basically reflects the fact that it is in the interests of all the parties
concerned to have a degree of flexibility around these things. There are a
number of provisions in there, all of which deal with fairly specific things
about ministerial discretion in other areas, and those are always there to
increase flexibility in what is really, as you would be aware from having
looked at this, a very complicated regime which deals with a large range of
sports events, all of which have different characteristics and so on. The more
you put stuff into black-leather legislation—specifically about what people
should and should not do—the more you risk coming up against something which
you did not anticipate or some future situation about the way a sport is
handled or the rights surrounding something...there is always a balance in
these things, and all the instruments here will be subject to parliamentary
scrutiny.[72]
Committee view
2.53
The Committee acknowledges that while ministerial discretion to make
determinations under the bill introduces uncertainty it also affords
flexibility, and that flexibility in the anti-siphoning regime was sought by
various stakeholders during the course of the inquiry.
2.54
The Committee welcomes statements by the department that it is the
government's intention that stakeholders will be involved in the development of
legislative instruments to the bill. The Committee urges the government, sporting
organisations, broadcasters and program suppliers to engage in these processes
in a meaningful and collaborative fashion.
Review of the new anti-siphoning regime
2.55
Submitters were supportive of the proposed statutory review of the new
anti-siphoning scheme although there was some debate about the proposed timing
of this review.
2.56
Sporting organisations, such as the NRL, AFL and Tennis Australia, were
supportive of the new anti-siphoning scheme being reviewed by no later than
31 December 2014.[73]
Mr McLachlan of the AFL stated:
We certainly would not want to see it any later than 2014.
The discussion started in 2009, roughly, and, given the pace of the evolution
of the digital environment, we do not think it should be any later than 2014.[74]
2.57
Ms Nicky Seaby of the NRL commented:
I think the review needs to be considered in the context of
other changes, such as the convergence review. It may be that this legislation
is almost redundant, depending on what the outcome of the convergence review is
and changes to that legislation. From our perspective, we would not like to see
that review date pushed out too far. We would want to be relooking at this
legislation in the context of any broader changes to broadcasting legislation
that might be implemented in the coming years.[75]
2.58
Similarly, subscription television broadcasters offered their firm
support for the proposed review of the scheme by 31 December 2014[76]
and shared the NRL's view that the review could include consideration of 'other
factors in the market place' for example the National Broadband Network (NBN).[77]
2.59
Free TV Australia had a different view and wanted to see the new
anti-siphoning regime reviewed later. Ms Flynn argued:
Some of us are a little bit exhausted by this constant
reviewing, reviewing, reviewing. It has taken us two years—I agree with the
previous people who gave evidence, the sporting bodies. But what is the point
of introducing something and reviewing it 12 months later? The basic structures
are not going to change. Yes, there will be different ways of delivering
content—we are all aware of that—but, as I said earlier, the relevance of the
list remains the same today.[78]
2.60
In response to the debate about the timing of the proposed review of the
new anti-siphoning scheme, DBCDE offered the following explanation:
When the policy was being developed a date was chosen which
allowed the legislation to operate for a reasonable period and that allowed us
to, within a reasonable period after its operation, assess whether the things
that we had done had any unintended consequences or caused the industry any
particular difficulties. There is no particular magic in the date that I am
aware of. It is not tied to any particular set of events or anything like that.
It is just that it is...a suitable period for deciding whether the bill is
doing its job.[79]
Committee view
2.61
The Committee shares DBCDE's view that the timing of the statutory
review proposed to occur before 31 December 2014 offers an appropriate length
of time for the new anti-siphoning regime to operate so that its impact and
effectiveness can be assessed.
2.62
Overall, the Committee supports the new anti-siphoning regime proposed
in the bill which will continue to enable the Australian television-viewing
public to enjoy important sporting events on free-to-air television.
Recommendation 3
2.63
The Committee recommends, subject to the preceding recommendations, that
the bill be passed.
Senator Doug Cameron
Chair
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