Additional comments by Labor Senators

The Broadcasting Services Amendment (Anti-Siphoning) Bill 2004 makes a relatively minor amendment to the anti-siphoning regime.

All pay TV broadcasters are subject to a licence condition which means they cannot acquire an event that is listed on the anti-siphoning list unless it has also been acquired by a free to air broadcaster.[127]

The intention of the anti-siphoning regime, which was developed by the previous Labor Government, is to prevent events that have traditionally been shown on free to air television from migrating exclusively to pay TV.

Labor Senators remain committed to a strong and effective anti-siphoning regime to maximise the likelihood that events of national importance are available to all Australians, not just those who can afford pay TV.

The inclusion of an event on the anti-siphoning list does not guarantee that an event will be televised free to air. It is often the case that free to air broadcasters, for a variety of reasons, decide not to broadcast an event that is on the list.

The Broadcasting Service Act (BSA) contains a mechanism whereby events are automatically removed from the anti-siphoning list if they have not been acquired by a free to air broadcaster within 6 weeks of the event commencing.

The Minister does have the power to override this automatic de-listing by making a declaration if the Minister is satisfied that a free to air broadcasters has not had a reasonable opportunity to acquire the rights to an event.[128]

This Bill extends the time for automatic de-listing from 6 weeks to 12 weeks.

Labor Senators are satisfied that this change is required in order to allow the Pay TV licensees adequate time to promote and prepare for the broadcast of events that are not taken up by the free to air broadcasters.

Labor Senators do not believe the extension of the period for automatic de-listing in any way undermines the intention of the anti-siphoning regime. Labor Senators therefore recommend that the changes proposed by the Bill be supported.

A ‘loophole’ in the regime

While this Bill contains a relatively minor amendment, the Committee's hearings did give rise to a number of other issues concerning the operation of the anti-siphoning scheme, and it was these issues that were the focus of the Committee’s inquiry.

The Committee’s hearings took place against the backdrop of public concern that the 2005 Ashes Test Cricket series would not be shown on free to air television.

Free to air broadcasters contended that the commercial viability of broadcasting the series had been undermined by a 'loophole' in the anti-siphoning regime.

The alleged loophole arises from the fact that the anti-siphoning regime only prevents pay TV licensees, such as Foxtel, from acquiring the rights to events on the anti-siphoning list before the free to air networks. It does not prevent third parties related to licensees, such as channel providers, from acquiring the rights.

The free to air networks claim that the loophole was exploited in the case of the Ashes because Fox Sports, a channel provider to Foxtel, acquired the pay TV rights, rather than the licensee. While the free to air rights remained available (until the purchase of the rights by SBS in early March following considerable public agitation), free to air networks argued that it would not be commercially viable for them to broadcast the test matches given that they could not obtain exclusive coverage.

Debate about the loophole is not new. Evidence provided to the Committee by ASTRA indicated that the channel providers have been acquiring the rights to listed events before free to air broadcasters on a regular basis since 1994. The free to air broadcasters have been publicly calling for the scheme to be amended to address the alleged loophole since 1995.

The Australian Broadcasting Authority told the Committee that it had examined the issue ‘in passing’ in its 2001 investigation of the anti-siphoning regime.[129] While it did not recommend change, it did say that the issue should be revisited if future monitoring of the anti-siphoning provisions showed the role of third parties had become problematic.

The ABA told the Committee that it is currently ‘taking an active interest’ in the question of whether there is a loophole in the anti-siphoning regime.[130]

It was clear from the ABA’s evidence to the Committee that the authority has undertaken a considerable amount of work investigating the circumstances

surrounding the acquisition of the pay TV rights to the Ashes by Fox Sports. The ABA indicated that it has supplied this information to the Minister.

Labor Senators believe that the information gathered by the ABA would assist the Senate’s consideration on the question of whether legislative change is required to ensure the effectiveness of the anti-siphoning regime and urge the Minister to make available the parts of the ABA’s report that are not commercially sensitive.

Labor Senators also note that the ABA requires free to air broadcasters to report to it every six months on the operation of the anti-siphoning regime. This information is not published but is used as the basis to provide advice to the Minister on the operation of the regime. Labor Senators believe that the Minister should regularly report to the Parliament on issues raised by the ABA's monitoring.

This inquiry has been conducted with some haste with the consequence that the Committee has not had the opportunity to fully consider some significant issues surrounding the scheme that have been raised by the evidence received.

Chief amongst these issues was the question of whether the BSA already contains an effective safeguard against the exploitation of the alleged loophole by entities related to pay TV licensees such as channel providers.

ASTRA contended that the Minister can refuse to de-list a program if any free to air network has not had a reasonable opportunity to acquire the rights. This would mean that Pay TV licensees would not be able to broadcast the event.

This point was disputed by Free TV who submitted legal advice that a pay TV licensee may broadcast an event on the list without ‘acquiring’ it in breach of the Act.

The Department supported ASTRA’s view and supplied legal advice indicating that an event on the anti-siphoning list cannot be shown by a pay TV licensee unless the Minister permits a de-listing to occur.

As the Chair’s report notes, this issue has not been settled. The Committee has not had the opportunity to question any witness in relation to the legal advice provided.

Debate around the alleged loophole has raised the need for detailed consideration of the intention of the Parliament in establishing the anti-siphoning regime, whether market practices are undermining that scheme or whether the regime is still effective in ensuring that its objectives are being met.

The short amount of time between the Committees hearings and its reporting date has not allowed sufficient time to clarify some of these important issues. Consequently at

this stage Labor Senators reserve their position on whether there needs to be an amendment to close the alleged loophole.

Senator Stephen Conroy
Australian Labor Party

Senator Kate Lundy
Australian Labor Party