Chapter 1

Background

1.1                 On 8 December 2005 the Senate resolved, in accordance with the recommendation of the Selection of Bills Committee,[1] that the provisions of the Broadcasting Services Amendment (Anti-Siphoning) Bill 2004 be referred to the Environment, Communications, Information Technology and the Arts Legislation Committee for inquiry and report by 7 March 2005.

Conduct of the inquiry

1.2                 The Committee invited submissions on the Bill in an advertisement in The Australian on Wednesday, 15 December 2004. It also wrote to a number of relevant organisations inviting submissions. The Committee received submissions from 14 organisations and individuals, as listed at Appendix 1. The Committee also held public hearings in Canberra on Monday, 21 February 2005, and Monday 28 February 2005, details of which are shown in Appendix 2.

1.3                 The Committee thanks all those who contributed to its inquiry by preparing submissions and by appearing at the hearings.

1.4                 It should be noted that references in this report are to individual submissions as received by the Committee rather than a bound volume of submissions. References to Committee Hansard are to the proof Hansard: page numbers may vary between the proof and the official Hansard transcript.

The provisions of the Bill

1.5                 The purpose of the Bill is to amend the anti-siphoning scheme established under the Broadcasting Services Act 1992, so as to increase the automatic delisting period from 6 weeks to 12 weeks.

1.6                 Subsection 115(1) of the Broadcasting Services Act 1992 provides that the Minister (currently the Minister for Communications, Information Technology and the Arts) 'may, by notice published in the Gazette, specify an event, or events of a kind, the televising of which should, in the opinion of the Minister, be available free to the general public'. The Minister may amend the notice to specify additional events.[2] The list of events (usually contained in a schedule to the notice) is usually referred to as the 'anti-siphoning list'.

1.7                 An automatic delisting period of six weeks for programs not picked up by free-to-air broadcasters came into effect with the passage of legislation in 2001. In April 2004 the then Minister announced that the automatic delisting period would be extended from six to 12 weeks.[3] Item 1 of Schedule 1 of the Bill implements that decision by amending subsection 115(1AA) to increase the time period for automatic delisting from 1008 hours (or six weeks) to 2016 hours (or 12 weeks). According to the Explanatory Memorandum, the purpose of this amendment is as follows:

Where no free-to-air broadcaster is interested in acquiring the rights to an event on the anti-siphoning list, the automatic delisting of the event six weeks before it occurs has proved to allow insufficient time for pay television operators to acquire the rights, finalise program schedules, negotiate advertising contracts and promote the event. Extending this period to 12 weeks will provide additional certainty to industry.[4]

1.8                 Item 2 of Schedule 1 is a transitional provision that deals with events which are scheduled to occur between 6 and 12 weeks from the commencement of the amendment. It provides that those events are delisted only from the time of the commencement of the new provision. This prevents events from being retrospectively delisted by the amendment.

1.9                 The Explanatory Memorandum also advises that the Bill is not expected to have a significant financial impact on Commonwealth expenditure or revenue.[5]

Background to the Bill – the operation of the anti-siphoning scheme

1.10             When pay TV commenced in Australia there was concern that major television sports events would migrate or be siphoned from the free-to-air networks to pay TV.

1.11             The former Minister for Communications, Information Technology and the Arts stated in 2004 that the anti-siphoning scheme ‘protects the access of Australian viewers to events of national importance and cultural significance on free-to-air television by giving priority to free-to-air television broadcasters in acquiring the broadcast rights of those events’.[6] It does this by preventing pay-TV operators from siphoning off television coverage of those events before free-to-air broadcasters have had an opportunity to obtain the broadcasting rights.[7]

1.12             However, it is clear that the intention of the legislation was not to reserve specific events solely for free-to-air, or to guarantee exclusive rights to free-to-air. The Explanatory Memorandum for the bill that introduced the provisions in 1992 stated that the:

... process should ensure, on equity grounds, that Australians will continue to have free access to important events. It will, however, also allow subscription television broadcasters to negotiate rights to provide complementary, or more detailed, coverage of events.[8]

Listing of events

1.13             The inclusion, or removal, of an event on the list is a matter on which the Minister has complete discretion.[9] In 2004, following a review of the anti-siphoning scheme, the then Minister issued a new notice containing a revised list of events, valid until 31 December 2010.[10] The list, reproduced at Appendix 3, includes only sporting events. It specifies the Olympic and Commonwealth Games, as well as events in the sports of horse racing, Australian rules football, rugby league football, rugby union football, cricket, soccer, tennis, netball, golf and motor sports.

1.14             The scheme operates through the imposition of a condition in subscription television broadcasting licences that:

The licensee will not acquire the right to televise, on a subscription television broadcasting services, an event that is specified in a notice under subsection 115(1) unless:

(i) a national broadcaster has the right to televise the event on its broadcasting services; or

(ii) the television broadcasting services of commercial television broadcasting licensees who have the right to televise the event cover a total of more than 50% of the Australian population.[11]

1.15             Thus the anti-siphoning scheme does not give free-to-air broadcasters exclusive access to the broadcasting rights to a listed event, but provides a priority to acquiring those rights if they choose. They are not obliged to acquire the rights. If a free-to-air broadcaster acquires the right to broadcast an event, a pay TV operator may also acquire a right to broadcast the same event. In 2001 the then Chairman of the Australian Broadcasting Authority (ABA), Professor David Flint, stated:

The original purpose of the ant-siphoning regime was to ensure audiences continuing access to television events that they had traditionally seen on free-to-air television. At the same time there was an expectation that pay TV would provide complementary or extended coverage of events. The rules were not intended to limit the enjoyment of pay TV subscribers to sports channels by reducing the amount of sport available on new services.[12]

1.16             In April 2004 the then Minister announced the outcome of a review of the anti-siphoning scheme. The Minister reaffirmed the Government's commitment to the anti-siphoning scheme, stating:

... less than one in four households in Australia currently has access to pay television, reinforcing the need for the anti-siphoning scheme to ensure that as many viewers as possible are able to access these events on free-to-air television.[13]

Delisting of events

1.17             There are two ways in which an event may be delisted: by the Minister amending the list, or by automatic delisting six weeks prior to the event.

1.18             When the anti-siphoning provisions commenced in 1994, delisting of an event occurred only through the Minister issuing a delisting notice, usually at the request of a pay TV operator. As part of its inquiry into broadcasting in 1999-2000,[14] the Productivity Commission recommended that responsibility for administering the provisions should be transferred to the ABA, and procedures should be streamlined to reduce the time taken for decision and to improve certainty and transparency.[15] The Government subsequently resolved to introduce a introduce a six week automatic delisting provision, with the aim of addressing concerns that the delisting procedure was too cumbersome and lengthy and might limit the time available to properly schedule and program events.[16]

1.19             The Explanatory Memorandum to the Broadcasting Legislation Amendment Bill (No. 2) 2001 stated that:

It is considered preferable to retain the role of the Minister in administering an anti-siphoning list, rather than delegating this function to the ABA, as current arrangements retain Parliamentary accountability over decisions that may have significant social implications. However, the implementation of a measure to streamline procedures to improve timeliness and certainty in the administration of the regime is supported. The automatic delisting of events 6 weeks before they are to occur directly addresses the problems identified by pay TV operators with the current de-listing scheme. It continues to protect free-to-air broadcasters' access to broadcasting rights of listed events they wish to televise and, thus, does not diminish opportunities for the public to enjoy free-to-air coverage of listed events.[17]

1.20             As noted above, subsection 115(1AA) of the Broadcasting Act 1992 now provides for the automatic delisting of listed events 1008 hours (or six weeks) before the event. Once an event has been delisted, pay TV operators may negotiate for the rights to televise the event.

1.21             Automatic delisting of an event will not occur if the Minister has published a declaration under subsection 115(1AA) that the event continues to be specified in the notice. The Minister may only publish such a declaration if the Minister is satisfied ‘that at least one commercial television broadcasting licensee or national broadcaster has not had a reasonable opportunity to acquire the right to televise the event’.[18]

1.22             As noted above, an event can also be delisted at any time by the Minister amending the notice that listed the event.[19]

Anti-hoarding

1.23             The anti-siphoning scheme is complemented by an anti-hoarding scheme which came into effect in 1999 and is aimed at preventing free to air broadcasters from hoarding rights to live coverage of events that they do not broadcast. Whilst the anti-siphoning scheme relates to the acquisition of rights to events included on the anti-siphoning list and not the television coverage of those events, the anti-hoarding provisions relates to the use of acquired live event rights.

1.24             The anti-hoarding provisions were intended to provide an 'incentive for free-to-air broadcasters to only acquire live rights to a designated event or events in a series they can actually use' and effectively to discourage the acquisition of live rights to events held simultaneously 'where it would be impossible to provide full live coverage of both events or series on the one television channel'.[20]

1.25             The Minister may make a disallowable instrument designating events which are covered by the 'must offer' rules. Rights to the designated events must then be offered to the ABS and SBS if the holder of the rights does not intend to broadcast a substantial portion of the event live. The national broadcasters are bound to televise the designated events to which they have obtained rights, or to offer them to the other national broadcaster.[21]