Chapter 1
Introduction
Conduct of the inquiry
1.1
On 21 March 2013, the Senate referred the following matter to the
Environment and Communications References Committee (the committee) for inquiry
and report by 1 June 2013:
The effectiveness of current regulatory arrangements (under
the Broadcasting Services Act 1992 and the Copyright Act 1968) in
dealing with the simultaneous transmission of radio programs using the
broadcasting services bands and the Internet ('simulcast'), including:
(a) the impact of current regulation
on stakeholders, including broadcasters, copyright holders, including both
publishing and performance rights holders, and the audience; and
(b) any related matter.[1]
1.2
In accordance with usual practice, the committee advertised the inquiry
on its website and wrote to relevant organisations inviting submissions by
26 April 2013. The committee also advertised the inquiry in The
Australian on 27 March 2013.
1.3
The committee received 16 submissions (see Appendix 1 for a list of
submissions). Based on the quality of evidence in written submissions, the
committee resolved to prepare its report without holding a public hearing. The
committee also asked specific questions of the Department of Broadband,
Communications and the Digital Economy (DBCDE), the Attorney-General's
Department (AGD) and other key stakeholders to address concerns and queries.
1.4
The committee would like to thank all the organisations that contributed
to the inquiry.
The digital world
1.5
Information and communication technology (ICT) plays an important role
in changing the way in which people live, work and do business.[2]
ICT products include computer hardware and software, telecommunications
equipment and infrastructure, and computer and telecommunication services. These
products are the core drivers of the digital world.
1.6
The development and use of ICT since the turn of the century has
increased significantly. Since 2000 the percentage of Australian households with
access to a computer increased from 53 per cent to 83 per cent in 2010.[3]
At the end of June 2011 there were 10.9 million internet subscribers in
Australia (excluding internet connections through mobile handsets), with
household subscriptions accounting for 80 per cent of this total.[4]
The remaining 20 per cent of connections were business and government
subscribers.[5]
1.7
There has also been a significant rise in the variety and number of devices
that have access to the internet, including mobile phones and tablets. At the end
of June 2011 there were 9.7 million mobile handset subscribers in
Australia able to access the internet via mobile phone.[6]
Remarkably this represented an increase of 18 per cent from six months
earlier in December 2010.[7]
1.8
The development and proliferation of ICT has meant that more and more
people are able to access information and content online. Innovative services
not previously imagined have emerged, such as YouTube and Spotify, and
traditional broadcasting services are available in new ways, such as radio and
television delivered over the internet.[8]
The Australian Communications and Media Authority (ACMA) has identified that
the historical distinctions between radio communications, telecommunication,
broadcasting and the internet are breaking down:
...digitalisation of content, as well as standards and
technologies for the carriage and display of digital content, are blurring the
traditional distinctions between broadcasting and other media across all
elements of the supply chain, for content generation, aggregation, distribution
and audiences.[9]
Regulatory framework
1.9
The Commonwealth government's 2012 Convergence Review recognised that
despite the advancements in technology and the accessibility of content online,
'Australia's policy and regulatory framework for content services is still
focused on the traditional structures of the 1990s—broadcasting and
telecommunications'.[10]
The Convergence Review stated:
The distinction between these categories [broadcasting and telecommunications]
has become increasingly blurred and these regulatory frameworks have outlived
their original purpose. These frameworks now run the risk of inhibiting the
evolution of communications and media services.[11]
1.10
The Convergence Review concluded that 'a new policy and regulatory
framework is needed to support these outcomes'.[12]
1.11
One such area of regulation overtaken by technological developments is
in relation to copyright. As advances in technology and evolving business
models are providing new ways of accessing and distributing content,
implications arise for content rights holders and for users. The Australian Law
Reform Commission (ALRC) has remarked upon the influence of technology on
copyright law:
Technology has brought new means of copying; digitisation
reduces the costs of copying and raises the costs of enforcement. In addition,
changes or developments in the attitude of consumers and users of copyright
material has led to reduced recognition that copyright is a form of property,
that is owned by a creator (or more usually, the assignee of a creator) and
that moral rights and issues of attribution and integrity of works may be
significantly compromised in a 'freed up' copyright environment.[13]
1.12
Of particular concern to the committee's inquiry is the effectiveness of
current broadcasting and copyright legislation to deal with the transmission of
radio broadcasts via traditional broadcasting bands (i.e. the radiofrequency
spectrum) whilst simultaneously being broadcast over the internet (simulcasting).
Copyright
1.13
Copyright law has historically been included among laws which granted
property rights for mental labour.[14]
In this tradition copyright law has been regarded primarily as conferring
economic rights, focusing on the protection of commercial activities designed
to exploit material for profit.[15]
1.14
The rights of individuals to protect their moral and material interests
are recognised in the United Nations' Universal Declaration of Human Rights.[16]
In Australia, property rights in the creative effort of mental labour are
protected by the Copyright Act 1968 (Cth).
1.15
The prime purpose of the Copyright Act is to:
...protect creative works so that authors, composers, artists
and sculptors may, during the continuance of copyright protection, control the
uses to which their works are put and get some return for the exploitation of
their works. But it is not only creative works, as that term might commonly be
understood, that are protected by copyright law. Any literary, dramatic,
musical or artistic work which has some slight degree of originality is
protected, no matter how prosaic that work might be.[17]
Copyright Act broadcast exceptions
1.16
In addition to conferring property rights in the creative effort, the
Copyright Act recognises that it is also necessary to have regard to those who
use copyright material:
The broadcasting and television industry, the record industry
and much of the entertainment industry depend on being able to use copyright
material on reasonable terms.[18]
1.17
To this end, section 109 of the Copyright Act provides an exception from
copyright laws for the broadcasting of sound recordings (subject to a licencing
scheme) to facilitate access by broadcasters to published sound recording
repertoire.[19]
Copyright in a published sound recording is not infringed by the making of a
broadcast (other than a broadcast transmitted for a fee) if remuneration is
paid by the broadcaster to the copyright owners in accordance with a statutory
licensing scheme.[20]
1.18
In creating a statutory licensing scheme, either the copyright owner or the
holder of a broadcasting licence may apply to the Copyright Tribunal[21]
for an order determining the amount payable in respect of the broadcasting of
the recordings.[22]
1.19
When making a determination in relation to a statutory licensing scheme,
section 152 of the Copyright Act limits the Copyright Tribunal in setting the
amount payable by broadcasters to copyright holders by way of a legislative
cap.[23]
The Copyright Tribunal may not award payment of more than one per cent of the
gross earnings of a commercial or community radio broadcaster. This is referred
to as the "one per cent cap".[24]
1.20
The Australian Broadcasting Corporation (ABC) is also entitled to a
legislative cap on the amount of fees payable to copyright holders under section
152. The Copyright Tribunal may not award more than one-half of one cent
($0.005) multiplied by the number of Australians (as determined by the
Australian Bureau of Statistics).[25]
1.21
Section 109 of the Copyright Act is specific in applying only to
broadcasts delivered by a "broadcasting service" as defined in the Broadcasting
Services Act 1992 (Cth).
Broadcasting Services Act
1.22
Subsection 6(1) of the Broadcasting Services Act defines
"broadcasting service" as a service that delivers television or radio
programs to persons having equipment appropriate for receiving that service,
whether the delivery uses the radiofrequency spectrum, cable, optical fibre or
satellite.[26]
There are certain exceptions to this definition, including that the minister
may determine that a particular service does not fall within this definition.[27]
1.23
In September 2000, the Minister for Communications, Information,
Technology and the Arts, Senator the Hon Richard Alston, made such a
ministerial declaration specifying that the following class of service does not
fall within the definition of "broadcasting service":
...a service that makes available television programs or radio
programs using the internet, other than a service that delivers television
programs or radio programs using the broadcasting services bands.[28]
1.24
The minister explained that the purpose of the definition is to ensure
that a service that 'provides television or radio programs through the
internet—other than a service that delivers television programs and radio
programs using the broadcasting services bands—does not fall within the
definition of a broadcasting service'.[29]
1.25
The ministerial declaration was made in response to amendments to the
Broadcasting Services Act that facilitated the introduction of digital
television and datacasting services to Australia.[30]
Legislative changes were required to ensure that datacasting services remained
distinct from broadcasting services. The minister stated that in introducing
the changes, it was 'never the [g]overnment's intention to consider internet
video and audio streaming outside the broadcasting services bands as
broadcasting'.[31]
1.26
Complexity arises in the current regulatory arrangements in relation to
internet simulcasts when radio stations, which are broadcasting services,
commonly stream content simultaneously on the internet that is identical to
their terrestrial broadcasts.[32]
Federal Court case
1.27
The provision of section 109 of the Copyright Act and the definition of
"broadcasting service" as stipulated in the Broadcasting Services Act
was recently tested in the Federal Court of Australia.
1.28
On 3 February 2010, the Phonographic Performance Company of Australia
(PPCA) commenced proceedings against Commercial Radio Australia (CRA) seeking
declarations that the communication of sound recordings over the internet by
CRA members was outside the scope of the copyright licence granted under an
industry agreement. The argument centred on whether internet simulcasts made by
a broadcaster (such as a radio station) were considered a broadcast under subsection
6(1) of the Broadcasting Services Act.
1.29
At first instance, the decision was found in favour of the CRA, with the
proceedings dismissed. The PPCA subsequently filed a notice of appeal and the
Full Court decision was handed down on 13 February 2013.[33]
1.30
The Full Court unanimously upheld the appeal, finding that the broadcast
of radio programs using the broadcasting services bands was a broadcasting
service that fell within the scope of the copyright licence granted by the
PPCA.[34]
However the simultaneous transmission of the radio program over the internet
constituted a separate and distinct service that fell outside the scope of the
licence. The Court held that:
...the delivery of the radio program by transmission from a
terrestrial transmitter is a different broadcasting service from the delivery
of the same radio program using the internet.[35]
1.31
The Federal Court's decision means that a radio broadcaster's internet
simulcasts were not covered by the licensing agreement struck between the PPCA
and CRA for the right to broadcast material.
1.32
The CRA has made an application seeking leave to appeal to the High
Court.[36]
No appeal has yet been made.
Australian Law Reform Commission review
1.33
On 29 July 2012 the Australian Law Reform Commission (ALRC) was tasked
with undertaking an inquiry into copyright and the digital economy.[37]
The inquiry follows on from the Commonwealth government's 2012 Convergence
Review into media and communications regulation. task
1.34
The ALRC has been charged with investigating the objective of copyright
law in providing an incentive to create and disseminate original copyright
materials, the general interest of Australians to access, use and interact with
content and Australia's international obligations regarding copyright law.[38]
1.35
The ALRC is also specifically examining the issue of whether the
Copyright Act can be amended to make statutory licensing schemes operate more
effectively in the digital environment and to better facilitate access to
copyright material and to give rights holders fair remuneration.[39]
1.36
An issues paper for the inquiry was released in August 2012. On 5 June
2013, a discussion paper containing proposals for reform of copyright law was
released.[40]
The discussion paper considered the issue of simulcasting and stated that:
In the context of media convergence, the continuing
distinction between broadcasts and other electronic communications to the
public in relation to copyright exceptions seems difficult to justify. There
may be no reason, in copyright policy terms, why radio broadcasters should have
access to a statutory licensing scheme under s 109 [of the Copyright Act],
while internet radio services are required to negotiate licences with collecting
societies to transmit sound recordings.[41]
1.37
The ALRC proposed in its discussion paper that the statutory licensing
scheme under section 109 of the Copyright Act should be amended to apply to the
transmission of television or radio programs using the internet.[42]
This would mean all broadcasts, irrespective of whether they are simulcast or a
standalone broadcast on a single platform, would be captured by the licensing
scheme.
1.38
Final recommendations of the ALRC's inquiry will be released on
30 November 2013.
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