Content, Consolidation
And Clout
How will regional Australia be affected by
media ownership changes?
A report by the Communications Law Centre 2006
Funded by a Faculty Grant from the
University of New South Wales, 2005
Acknowledgements
The authors would like to thank all those in Wollongong, Launceston, Townsville and Toowoomba
who participated in the focus groups for this study, and the academics, commentators and journalists
who gave us their time and insights.
Special thanks go to: Elizabeth Beal, Philip Bell, Ginger Briggs, Lesley Hitchens, Jock Given, Julie
Hillocks, Geoff Lealand, Julie Miller, Nick Moustakas and Julian Thomas.
Analysis of media companies and a draft of some sections of Chapter Four were provided by Danny
Yap as part of a placement for the University of New South Wales Law School social justice internship
program.
The Faculty Research Grants Committees of the Faculty of Law and the Faculty of Arts and Social
Sciences at UNSW provided funding for the initial part of this project including the field work in
regional centres. The project was completed by the authors following the closure of the
Communications Law Centre at UNSW in June 2005. The CLC continues its policy, research and
advocacy work through its centre at Victoria University.
About the authors
Tim Dwyer is Lecturer in Media Policy and Research at the School of Communication Arts,
University of Western Sydney.
Derek Wilding was Director of the Communications Law Centre from 2000 to 2005. Before that he
worked for the Media, Entertainment and Arts Alliance and at Queensland University of Technology.
He is currently a Principal Policy Officer with the Office of Film and Literature Classification.
Helen Wilson is Adjunct Research Fellow with the Communications Law Centre. She was Associate
Professor in the School of Humanities, Media and Cultural Studies at Southern Cross University, and is
currently editor of Media International Australia incorporating Culture and Policy.
Simon Curtis was Clayton Utz Senior Research Officer at the Communications Law Centre from April
2004 to July 2005. He is currently a researcher at the Faculty of Law, UNSW, on a project examining
self-regulation in the communications sector.
Any views expressed in this report are those of the authors and not of the organisations for which they
work.
Communications Law Centre
The Communications Law Centre is an independent, non-profit, public interest organisation
specialising in media, communications and online law and policy. In Victoria, the Communications
Law Centre is a research unit of Victoria University.
Director: Elizabeth Beal
Level 1, 283 Queen Street
Melbourne VIC 3000
PO Box 14428
Melbourne VIC 8001
Phone +61 (0)3 9600 3841
Fax +61 (0)3 9670 7902
Email [email protected]
Web www.comslaw.org.au
© Communications Law Centre Limited 2006
ABN 89 003 623 630
ISBN 1-875538-35-6
All rights reserved. Without limiting the rights under copyright preserved above, no part of this publication may be reproduced,
stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying,
recording or otherwise), without the prior written permission of the Communications Law Centre.
The cartoon on the front cover is by Reg Lynch
CONTENT, CONSOLIDATION AND CLOUT
Contents
Acronyms & abbreviations
List of tables and figures
iii
iii
Executive summary
v
Key findings
xxiv
1 Introduction
1
1.1
Media ownership and regional Australia
3
1.2
Current media ownership
4
1.3
Outline of the report
9
2 Rationales and realities of Australian media ownership regulation
11
2.1
The rationales of media ownership regulation
2.1.1 Media influence
2.1.2 Content choice: the new diversity?
12
13
15
2.2
Continuity and change in Australian media ownership regulation
2.2.1 Media ownership regulation 1923-1986
2.2.2 Regulatory changes 1987-1988
22
22
25
2.3
Current media ownership laws
2.3.1 Cross-media and media concentration
2.3.2 Limits on foreign ownership
26
26
28
2.4
Convergence, competition and regulatory change
2.4.1 Revisiting the Productivity Commission’s Broadcasting Report
2.4.2 The Broadcasting Services (Media Ownership) Bill 2002
2.4.3 Increasing role of competition regulation
2.4.4 Proposals for deregulation
29
30
34
36
39
3 Media ownership, networking and local content provision
44
3.1
Equalisation and local content
45
3.2
ABA Investigations: Localism policies in regional TV
3.2.1 First ABA Report, August 2002
3.2.2 Second ABA Report, June 2004
48
48
53
3.3
Existing content sharing practices
54
3.4
Anticipated legislative reform and preserving local content
56
4 Media mergers and regional consequences
58
4.1
Introduction
4.1.1 Review of regional media ownership – methodology
58
59
4.2
Potential changes in ownership
4.2.1 Macquarie Bank
4.2.2 APN News and Media
4.2.3 Rural Press
4.2.4 Southern Cross Broadcasting
4.2.5 Prime Television
4.2.6 WIN Corporation
4.2.7 West Australian Newspapers
63
63
63
64
64
65
65
66
4.3
Impact on services in selected regional areas
4.3.1 Possible mergers
66
66
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4.3.2
Effects on diversity
71
4.4
Impact on services in other regional markets in Australia
75
4.5
Conclusion
79
5 Case studies of regional media issues
82
5.1
Wollongong
5.1.1 Power and the city
5.1.2 Major media
5.1.3 Advertising and competition
5.1.4 Media ownership
5.1.5 Summary
83
83
86
96
97
98
5.2
Townsville
5.2.1 The Townsville Bulletin
5.2.2 Television
5.2.3 Radio
5.2.4 Summary
99
100
102
104
105
5.3
Launceston
5.3.1 The Examiner
5.3.2 Advertising
5.3.3 Television
5.3.4 Radio
5.3.5 Media ownership
5.3.6 Summary
105
107
112
113
114
115
115
5.4
Toowoomba
5.4.1 The Toowoomba Chronicle
5.4.2 Television
5.4.3 Radio
5.4.4 Media ownership
5.4.5 Summary
115
117
122
123
124
124
5.5
Observations and comments
125
6 International developments in ownership and content regulation:
New Zealand, the United Kingdom, Canada and the United States
128
6.1
New Zealand
129
6.2
United Kingdom
6.2.1 Broadcasting Act 1996
6.2.2 Communications Act of 2003
6.2.3 The Public Service Broadcasting Review
132
132
135
140
6.3
Canada
6.3.1 Legislative and regulatory framework
6.3.2 Media ownership consolidation
6.3.3 Canada’s approach to maintaining media diversity
144
145
150
151
6.4
United States
6.4.1 Legislative and regulatory framework
6.4.2 FCC order and Appeals Court response
157
159
160
6.5
Australia compared
162
7 Conclusion: content, consolidation and clout
References
165
172
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Acronyms and abbreviations
ABA
Australian Broadcasting Authority
ABT
Australian Broadcasting Tribunal
ACCC
Australian Competition and Consumer Commission
ACMA
Australian Communications and Media Authority
BDU
Broadcasting Distribution Undertaking (Can)
BSA
Broadcasting Services Act 1992 (Cth)
CBSC
Canadian Broadcasting Standards Council
CROC
Crown-Owned Company (NZ)
CRTC
Canadian Radio-television and Telecommunications Commission
DCITA
Department of Communications, Information Technology and the Arts
FATA
Foreign Acquisitions and Takeovers Act 1975 (Cth)
FCC
Federal Communications Commission (US)
FDU
Forward Development Unit
(part of the former Department of Communications)
MCH
Ministry for Culture and Heritage (NZ)
NZOA
New Zealand On-Air
Ofcom
Office of Communications (UK)
PC
Productivity Commission
PSB
Public Service Broadcasting (UK)
List of tables and figures
Tables
1.
Percentage of national daily press circulation
5
2.
Percentage of national television audience reach
5
3.
Percentage of national radio audience reach
6
4.
Regional media companies examined in this report
62
5.
Impact of forecast mergers on markets in regional Australia
77
Figures
1.
Companies with significant investments in metropolitan television and
newspapers
7
2.
Companies with significant investments in regional media
8
3.
Current ownership and potential mergers in four regional markets
(Wollongong, Townsville, Launceston and Toowoomba)
68
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Executive summary
Media ownership and local content
The current context for media ownership reform – and in particular, the bundling of
‘Regional Service Protections’ with the dismantling of the cross-media rules – needs
to be seen in the context of far-reaching decisions in media policy made in the 1980s
and the short-term gains of media policy in the 1990s.
The most significant regional media policy decisions of the 1980s were ‘equalisation’
of television markets (so that most regions were supplied with three commercial
services) and ‘aggregation’ of a large number of small regional markets in
Queensland, New South Wales and Victoria into a small number of large
geographical zones. These were accompanied by the replacement of the two-licence
cap with the 75% national reach rule for television and the introduction of rules
preventing cross-media holdings of commercial television, commercial radio and
major newspapers in the same market.
These decisions have, in most cases, resulted in extra television services provided by
three regional television networks. However, a by-product has been the national
syndication of programs and a loss of local television content in some areas that
mirrors the loss of local content on regional radio.
Networking and local content provision
The report of the House of Representatives Standing Committee on Communications,
Transport and the Arts, Local Voices: An inquiry into regional radio (September
2001), drew attention to the decline of local radio programming. The committee made
a number of relevant recommendations in relation to access and diversity, local radio
and commercial viability, the role of radio in emergency situations, and digital
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broadcasting services. Shortly after this report, community concern over the closure
of regional television news services triggered two ABA
investigations.
The ABA’s first investigation (in 2001-2002) covered the aggregated markets in
Queensland, New South Wales and Victoria. The ABA found that not all licensees in
these markets were providing an appropriate coverage of matters of local significance,
and therefore were failing to fully meet their obligation under the Broadcasting
Services Act 1992. The curious absence of any specific individual responsibility on
the part of licensees for local content needs to be understood in the context of
deregulation, via the Broadcasting Services Act, of a number of policy settings in
relation to programming and licensing of Australian broadcasting. In particular, the
Act deregulated the existing localism requirement by introducing a statutory licence
condition applying to all licensees. The previous broadcasting legislation
(Broadcasting Act 1942) obliged each licensee to be responsible for this standard of
provision in relation to its own service.
Accordingly, the ABA proposed an additional condition on all 13 regional licensees
in the four aggregated markets. This condition would require them to broadcast a
minimum amount of programs about matters of local significance to each sub-market.
The scheme has had some success. While broadcasters in some local areas in regional
Queensland and Victoria have only barely met the minimum weekly requirement,
others in local sub-markets within some licence areas in Northern New South Wales
and regional Victoria have almost trebled the 120 point average requirement.
The ABA’s second report (in 2003-2004) focused on the remaining non-aggregated
regional and rural television broadcasting market. While the geographic reach of these
markets is much wider, their population and population densities are generally much
smaller. The ABA found that at least one commercial television broadcasting service
provided local news and information programs and concluded that it would be
inappropriate to require licensees to provide additional material of local significance,
at least at that time.
Against this background, the proposals for regulatory change released by the Minister
for Communications, Information Technology and the Arts in March 2006 would
remove the cross-media rules and replace them with a ‘safety-net’ test that permits
mergers in regional markets only in circumstances where at least four commercial
media players would remain. This initiative is tied to a package of ‘Regional Service
Protections’ which includes:
ƒ
ƒ
ƒ
legislation confirming the operation of the local content licence conditions
imposed by ACMA on regional broadcasters;
continued monitoring by ACMA of local news and programming output by
regional commercial broadcasters and possible allocation of new licences if
diversity is reduced through format changes; and
monitoring of local content in areas not covered by the current licences and on
commercial radio.
In presenting these regional ‘protections’, the discussion paper expressly recognises
the difficulties of providing adequate television services to residents of regional
Australia. But it gives little consideration to the impact in those markets of mergers of
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the existing media companies.
Rationales and realities of Australian media ownership regulation
Regional media in Australia is already highly concentrated. In mid-2005, four
companies (News Corporation, John Fairfax Holdings, Rural Press and APN News
and Media) controlled all but seven of the 36 regional daily newspapers in Australia.
Three regional television networks (WIN Corporation, Southern Cross Broadcasting
and Prime Television) held all but four of the 39 non-metropolitan commercial
television licences in Australia. There was more competition in regional radio,
although in mid-2005 three networks (Macquarie Regional Radioworks, Broadcast
Operations, and Grant Broadcasters) accounted for 132 (61%) of the 215 regional
commercial radio licenses.
Nonetheless, and despite the ‘Regional Service Protections’ of the 2006 discussion
paper, the philosophy underpinning the latest policy developments relies on a theory
of proliferation of media sources in a digital age. While major media policy decisions
of the late 1990s (including the Australian models for digital television) have
themselves constrained the growth of new services, the advent of pay TV (also a
policy decision of the 90s) and the growth in Internet and broadband services are seen
as justifications for removal of the cross-media rules and the answer to a potential loss
of diversity.
It is in this environment that the concept of diversity has been refashioned to refer to a
multitude of pieces of information – a proliferation of data – much of which is
recycled and offered as a source in its own right, and much of which originates
overseas or is anecdotal in nature.
These arguments fit with a transition from structural regulation of media ownership –
via the cross-media rules – to content regulation. A principle underpinning efforts at
media reform since 1996 is that consolidation between the influential traditional
media companies poses no threat to diversity because news and information are freely
available elsewhere. The evidence for this claim appears to be found on the Internet
sites of existing media companies, overseas pay TV channels and soon-to-appear
datacasting services. The Productivity Commission’s recommendations in 2000 for a
phased approach to deregulation, structured around encouraging genuine competition
in new services and the removal of barriers to entry in traditional media, were largely
ignored in policy terms. Instead, an attempt to dismantle the current system was
attempted in 2002/2003, based on proposals for merged companies that would retain
separate editorial arrangements.
Since that time, the ACCC has hovered at the margins of media regulation. Recent
indications are that the ACCC will change its approach to the definition of media
markets to look across media platforms. However, nothing concrete has emerged from
the Commission.
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Current proposals
This, then, is the background to the release of the current Minister’s own proposals for
far-reaching regulatory change. The core elements of the new regime include:
ƒ the concentration rules, limiting ownership to one commercial television
station in each market and two commercial radio stations, will remain;
ƒ the 75% national reach rule will remain;
ƒ the limits on foreign investment contained in the Broadcasting Services Act
will be removed, as will the newspaper-specific aspects of the Foreign
Investment Policy, with the media sector retaining its ‘sensitive sector’
status and the Treasurer retaining prior approval over all proposals for
direct investment in the sector by foreign interests;
ƒ the cross-media rules will be replaced with a numerical diversity test that
requires there to be at least five commercial media groups in a metropolitan
market and at least four commercial media groups in a regional market.
These changes in media ownership rules are linked to changes in the regulation of
digital television services. Despite the potential for significant further concentration
resulting from the removal of the cross-media rules, the discussion paper – even the
sections on media ownership – emphasises the importance of new services and new
players.
On close examination, this enthusiasm for new players and services is difficult to
maintain. The digital television proposals may amount to little more than expanded
datacasting services, short-form content for mobile phones, or an extra mechanism by
which Foxtel can reach television audiences. Also, the media ownership proposals
demonstrate a willingness of the part of the government to ensure that the largest
existing players can consolidate to an extent that could seriously erode the capacity of
any new entrants to compete when analogue services are switched off and the
moratorium on new commercial licences expires, probably in 2012.
In selling the proposals following the release of the discussion paper in March 2006,
the Minister emphasised (in an interview on Inside Business) the ‘protections’ that the
legislation would enshrine: ‘…it’s not a matter of let it rip. It’s a relaxation with
significant safeguards and associated new services’. And, in an interview for The 7.30
Report, the Minister sought to reassure the public that ‘we’re very serious about
having a floor under which diversity can’t go any lower, in other words, the number
of players can’t get any lower’.
For metropolitan markets, this ‘floor under which diversity can’t go any lower’ could
mean a reduction of more than 50% of the number of players in the market. The
effects in regional areas – and the view of residents in four regional markets – are the
subject of our research.
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Potential media mergers and regional consequences
Based on reports from financial analysts and business journalists, an analysis of
possible media mergers and their effects on other regional markets shows that there
could be substantial change to the media ownership arrangements in regional
Australia if the cross-media rules are replaced by a ‘minimum number of players’
rule, as proposed by the Minister in her March 2006 discussion paper.
Potential results of the removal of the cross-media rules in four regional markets are
set out below.
Wollongong
Company 1
Company 2
Company 3
Company 4
The Illawarra Mercury, Southern Cross TV
[Fairfax acquires Southern Cross]
WIN TV, i98FM
Prime TV
WAVE FM [Grant Broadcasters]
The ‘minimum number’ test would allow Fairfax to acquire Southern Cross. It could
have the effect of blocking any of the existing television licensees from acquiring the
radio licences of Grant Broadcasters. However, there has been no indication that any
of those companies would seek to acquire the independent regional radio network,
which in any event is privately owned.
A potential overall result for Wollongong is that the six media assets currently held by
five different players could, following mergers permitted under the government’s
proposals, be held by four players.
Townsville
Company 1
Company 2
Company 3
Company 4
The Townsville Bulletin, Seven Network
[News acquires Seven]
4TO, HOT FM, WIN TV
[Macquarie Bank acquires WIN]
Southern Cross TV
Mix FM, Sea FM [Prime]
The ‘minimum number’ test would allow News to acquire Seven and Macquarie Bank
to acquire WIN. It would block those merged companies and Southern Cross from
acquiring the MIX FM and Sea FM radio licences, however there is no indication that
any of those companies would seek to acquire the six regional radio licences held by
Prime in Queensland, including the two stations in Townsville.
A potential overall result for Townsville is that the eight media assets currently held
by six different players could, following mergers permitted under the government’s
proposals, be held by four players.
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Launceston
Company 1
Company 2
Company 3
The Examiner, Southern Cross TV, digital TV joint venture
[Rural Press acquires Southern Cross]
7LA, WIN TV, digital TV joint venture
[Macquarie Bank acquires WIN]
7EX [TOTE Tasmania]
The ‘minimum number’ test would have a significant effect in Launceston: given that
there would be a requirement for four separate players in the market, either the
acquisition of Southern Cross by Rural Press or the acquisition of WIN by Macquarie
Bank would be blocked.
This means that a possible future scenario for Launceston under a ‘minimum number’
test could be:
Company 1
Company 2
Company 3
Company 4
The Examiner, Southern Cross TV, digital TV joint venture
[Rural Press acquires Southern Cross]
WIN TV, digital TV joint venture
7LA [Macquarie Bank]
7EX [TOTE Tasmania]
Alternatively, if Macquarie Bank moved first to acquire WIN, the acquisition of
Southern Cross by Rural Press would be blocked.
A potential overall result for Launceston is that the six media assets currently held by
five different players could, following mergers permitted under the government’s
proposals, be held by four players.
Toowoomba
Company 1
Company 2
Company 3
Company 4
The Chronicle, Seven Network
[APN acquires Seven]
WIN TV, 4GR and CFM
[Macquarie Bank acquires WIN]
Southern Cross TV
4AK, 4WK [Broadcast Operations]
The ‘minimum number’ test would allow APN to acquire Seven and Macquarie Bank
to acquire WIN. Although unlikely, a further move by APN/Seven to acquire the
Broadcast Operations radio licences would be blocked by the ‘minimum number’
rule, since it would result in only three players in the market. For the same reason, the
‘minimum number’ rule would also prevent Southern Cross from acquiring the radio
licences of Broadcast Operations. Whether Macquarie Bank acquired Southern Cross
or WIN, it would be unable to acquire the licences of Broadcast Operations because
of the existing two-to-a-market radio concentration rule. In any event, Broadcast
Operations is a privately-held company and there has been no indication that its
owner, Bill Caralis, anticipates the sale of the network.
A potential overall result for Toowoomba is that the eight media assets currently held
by six different players could, following mergers permitted under the government’s
proposals, be held by four players.
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In the scenarios presented above covering four regional markets, the ‘minimum
number’ test would allow consolidation in all markets. In Toowoomba, the number of
separate players could be reduced from eight to four; in Wollongong and Townsville,
the number of separate players could be reduced from six to four; while in Launceston
the reduction could be from five to four. In all cases, it can be said that the existing
‘concentration’ rules (ownership limits of one television licence to a market, two
radio licences to a market) are more effective than a ‘minimum number’ test in
preventing serious consolidation of media interests.
While the above analysis covers four markets in regional Australia, a further analysis
shows the flow-on effects of some of these mergers in other markets. In Wollongong
a merger between Fairfax and Prime would result in co-ownership of the local paper
and one of the television stations; a similar effect would occur in Newcastle in New
South Wales and in Warrnambool in Victoria.
Similarly, a merger between Rural Press and Southern Cross would affect a number of
markets besides Launceston where the local paper could merge with one of the
television stations. In fact, the implications for some of these areas would be more
serious than for Launceston. In towns such as Dubbo in New South Wales and
Ballarat in Victoria, there are three commercial television operators and two
commercial radio operators, meaning that the reduction in diversity could be from six
players to four, rather than from five players to four, as in Launceston.
The tables involving Macquarie Bank indicate just how far-reaching these mergers
could be.
The problem for policy makers is that the ‘minimum number’ test is not consistent in
its results. This test would not prevent the local newspaper and one of the commercial
television stations combining in Wollongong, where the leading radio station is
already co-owned by the dominant local television network; and it would not prevent
the two most popular radio stations and the most identifiably local and relevant
television station in Toowoomba being co-owned by the company that owns the local
newspaper. In fact, in all the markets considered here, the ‘fourth player’ in a postmerger scenario is the holder of one or two radio stations that are not the market
leaders.
This inconsistency in outcomes arises because the ‘minimum number’ test gives the
same status to a company that controls two minor radio stations as a company that
controls the major newspaper, television station and radio stations in the same market.
The test, by its nature, only counts the number of companies currently operating in
any market without considering the corporate profiles of those companies and their
operations within the communities they serve. It that sense, it resembles the tests
under trade practices law – at least as we know them to date – in that it does not look
at the effect of media mergers on the local news culture. It also suggests that the
importance of local daily newspapers – a matter emphasised by residents of the four
regional areas we visited – has been underestimated in the government’s proposal.
Case studies of regional media issues
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A number of generalisations can be made on the basis of the case studies of
Wollongong, Townsville, Launceston and Toowoomba:
ƒ
Citizens’ knowledge of media ownership is scant. They generally don’t
remember ownership changes and they associate television ownership with
network affiliation.
ƒ
When asked about the local media they talk about the local newspaper almost
obsessively, though they see its performance as flawed.
ƒ
They value local television news on the basis of its publicity of community
events, not journalistic value.
ƒ
They are aware of editorial changes in newspapers instigated by different
editors.
ƒ
They are aware that the quality of journalism is likely to be lower than in metro
papers, because journalists may be inexperienced and transient.
ƒ
They are aware of the difference between media power and market power.
ƒ
They are aware of the influence of major advertisers, particularly when
advertisers are seen to have economic and political power.
ƒ
They are also aware of the difficulties for local businesses in meeting the high
costs of advertising with media companies that hold substantial market power.
ƒ
They see media elites as part of local power elites and readily cite cases of
revolving doors between journalism and working for local politicians or
companies.
ƒ
They are very aware of the potential for corruption through the lack of
transparency in this connection.
ƒ
They are also aware of direct exercises of power by a media organisation that
holds disproportionate media power
ƒ
What worries them about ownership deregulation is the increased chance of
corruption and the misuse of media power through the loss of safeguards.
ƒ
Some look positively on the prospect of takeovers, providing they can be used
as a means of improving the quality of journalism.
ƒ
They value ABC local radio as a credible alternative to the journalism of the
daily paper.
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The local media mix
Those who engage in public life in some way have all developed a critical awareness
of the media’s various roles in the local community, both in setting public agendas
and in supporting particular business activities and organisations. All the discussions
spontaneously focused on the press, with the local daily newspaper synonymous for
most with local media, and ABC radio close behind. A few radio stations were seen as
active sources of local views, but television was generally seen to have greater value
as an instrument of publicity and marketing support, rather than for any contribution
to local knowledge and debate.
Bridget, Launceston: … I find it interesting that none of us have talked about the allpervasive power of television. It’s The Examiner we’re all concerned with. …But
there’s nothing very meaty. Television news is effectively an entertainment medium.
Julie, Toowoomba: ... Southern Cross doesn’t really cover news – more like new
exhibition at the Cobb and Co Museum, local production of A Midsummer Night’s
Dream at USQ etc. Seven has no local news, but it does weather. The weather on
WIN covers a really strange area. It’d be logical to cover Toowoomba, Warwick,
Stanthorpe, Oakey, Dalby and Goondiwindi. Instead, it covers Toowoomba,
Townsville, the whole state.
Mary, Toowoomba: If you watch WIN then switch over to the next channel you feel
like you’re being told you’re stupid, it’s so light on, even the production side of it.
I’m not saying necessarily the content, local content is local content, you’ve only got
a small number of people geographically. Even the production itself is really light-on.
Denis, Townsville: It’s like being in a cocoon. You don’t know what’s going on
outside Townsville…. We should have a proper news service where we’re getting all
of the north. You don’t get anything about Mackay or Cairns.
In Toowoomba, the commercial radio stations provide local information (for example
a gardening talk-back show on 4GR) but the news services are minimal, and the
sector is not seen as having great impact, although the main presenter, as in
Townsville, ‘seems to be everywhere’. Several people (not just the media academics
interviewed) described the radio news services as ‘rip and read’ from the Chronicle,
although they remembered 4GR as having a good local service. As in all the case
studies, ABC regional radio was singled out for praise:
Peter, Toowoomba: ... There’s no doubt about it, the ABC in its regional services, is
vastly superior to everybody in being a transmitter of quality information – and
discussion, phone-in etc. I’ve walked this town as part of my job and people stopped
you, telling you about listening to you on the ABC.
Though their knowledge of media ownership companies and regulation was low,
participants were much better informed about editorial changes and noted the comings
and goings of editors and journalists and the impact this made on media output. Many
had personal dealings with media people, feeling free to approach them with criticism
or suggestions.
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Upholding standards and exposing corruption
While there were criticisms of television news, the vitriol among participants was
saved for the quality of journalism at the local paper. In Toowoomba, one participant,
Mary, in reflecting on the discussion at the end of the focus group, commented that
the feeling of being ‘desperately let down by the local newspaper’ had dominated
discussion. Other participants in this and other locations drew attention to problems
with professionalism and commitment, while others spoke of disinterest on the part of
journalists, or even inability to do the job.
June, Wollongong: I’m convenor of the Illawarra Escarpment Coalition (IEC) and
have been for the last nine years ... I was asked to go out on the site of the sale of one
of the mining lands in the northern suburbs. I felt that the girl sent by the Northern
Leader was unable to deal with the subject matter. She knew nothing about it. I tried
to explain what had been happening but she misquoted me and put the local Labor
candidate’s words in my mouth …
Peter, Toowoomba: If you go back 3 years there was no classified graded journalist
on the paper’s staff for a period of several months, then they got in a few cadets and
lost more experienced people… It comes through that somehow there isn’t a
journalistic ethos, an investigative ethos – I don’t mean sensational ethos – I mean a
willingness to pursue the story and to get behind the half-true headline.
June, Wollongong: One of the major problems is the continually changing journalists
in local print as well as local TV. It takes time to build up an understanding of local
dynamics and the history of issues and places. With little experience, young
journalists are thrust into major issues without the experience or time to research the
issues. This doesn’t provide well-informed journalism. It serves neither the
community, the development of the journalist or the organisation which employs
them.
Julie, Toowoomba: They use the same template used for all APN newspapers e.g. the
‘Work Search’ section features people from places as far off as Gympie. I suspect that
a Leggo competition was run for a whole series of APN newspapers. They misspelled
Toowoomba so the ad obviously wasn’t written here.
Mary, Toowoomba: It’s real estate, real estate, real estate. Oh, and cars! Newspapers
seem to be one big brochure, with community content drifting out to pages 5 to 7,
then a mock up of the local news that they’ve picked up from the Internet or
whatever. You’ve read them 1000 times during the day if you look at different
sources, then advertising, advertising, advertising. So I feel like when you buy it
you’re actually losing the heart and soul of a country town without the one main thing
reporting it, by losing your local identities, local stories, investigative journalism, the
good mix, the overall community thing. I think you’re paying $1.05 for a brochure
that otherwise gets dropped into your mailbox for nothing. And the alternative
newspaper, the Mail, could actually be worse.
Perhaps the most revealing comment came out of a discussion on the coverage of
what participants felt ought to be headline issues in Toowoomba:
Mary, Toowoomba: We’ve had two big stories in the last couple of months and none
of them have received in-depth analysis. One was a triple murder, which I learned
more about from watching the state news than from reading the local paper. The other
is a council plan to treat effluent and put the clean water back into our dams. That’s a
story with national impact, but nothing … In the Chronicle I saw five people
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photographed, asked in the street, vox pops, ‘would you drink recycled effluent?’
‘No, no way I’m going to!’ And that’s their little quote. That’s the analysis we’ve
had. We’ve had a bit of a report of the situation, with a flow chart of pipes and dams.
But if the Chronicle was doing its job properly that’s a very big story, of crucial
significance to our survival as a community, water, and nothing has been done about
it… We actually know more about Sydney’s desalination plant.
This perceived failing of the media source that participants saw as the major source of
local news had even more serious implications. Participants felt that the local paper
was probably not up to the task of maintaining the integrity of the local public sphere.
Such integrity is seen to mainly depend on a strong editor and good journalists
responsive to the local community. As a result, there was little confidence in local
media fulfilling its role of exposing corruption.
Q: How would they deal with corruption?
Mary, Toowoomba: They wouldn’t uncover it, but they’d tell you a lot about it for
months and months afterwards but they wouldn’t uncover it. I don’t think the
Chronicle would be capable of uncovering it. They won’t crack a story. But they’ll
add to it ad nauseam.
Anne, Toowoomba: They won’t spend time to understand the issues.
Media academic, Toowoomba: ... I noticed a difference when APN took over in 1988.
They did go in hard against local magnate, Berghoffer who was a local councillor and
state MLA at the same time and involved in big local property deals. The paper
served as an important source of public debate on this issue. Now I doubt that the
Chronicle would fulfil this role. Subsequently there’s been a reduction in reporting
coverage and they seem to be more interested in fitting the APN model with an
emphasis on localism and lifestyle.
David, Townsville: I go to Cairns regularly and I get the Cairns Post. They seem to
watch the council like a cat watches a mouse. If there’s anything up in Cairns Council
that seems a bit bodgy or dodgy the paper’s there straight away exposing it for all to
see.... The paper would appear to be the people’s watchdog up in Cairns. It’s totally
different to the Townsville Bulletin. Here it seems very cosy.
As an extension of this, participants expressed concern about the degree to which the
paper was associated with other local power elites. In Wollongong, one participant,
Marcel, was an environmental activist, involved in the long running campaign to try
to stop coastal development by the company Stockland at Sandon Point. In a 2002
email, he complained about the Illawarra Mercury’s coverage of the tense situation at
the site as development began:
On Saturday the 29th August 2002 we held a major public rally at Sandon Point. Over
600 people attended. Politicians and aspiring Lord Mayors were also in attendance,
all keen to speak and impress their thoughts on the audience. WIN TV covered the
event on the local nightly news. But alas... no Illawarra Mercury.
He comments in retrospect about a complaint to the editor:
Marcel: He replied by pointing out that a report of the rally was filed but discarded
supposedly for lack of space. …. He was correct in pointing out that the total overall
coverage was fairly balanced. However this is a little bit like the referee evening up
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the penalty count near the end of a footy game when the result is beyond doubt.
… the Stockland media machine employed Janine Cullen from about April 2002.
Janine was married to Peter Cullen who was the former editor of the Illawarra
Mercury. He is now deceased. However, I’m sure that Janine with all of her
connections within the Mercury would still have exercised quite a deal of influence.
…Thankfully WIN TV and the Northern Leader have kept people informed.
In some cases, the power resided with advertisers:
Sarah, Launceston: My most serious concern with this paper [The Examiner] is it
seems to be very much at the behest of advertisers to some degree, particularly Gunns
Limited. It’s a very wealthy company and I’m very concerned that there’s biased
media because of the power of that company. There was this thing on Media Watch.
They’ve done other things in the past and I’ve complained to the Press Council.
Linda, Townsville: Part of the Bully’s success is from the huge real estate sections. I
used to work in that industry and I know you don’t need to advertise that much. You
don’t need to pay for all that advertising. I know there are some dodgy dealings in the
local real estate industry, but if I wanted to write a story about it I couldn’t get it
published.
For most participants, it was control at the editorial level that concerned them and the
close relationship between media elites and local power elites.
Despite all its perceived shortcomings, participants still valued the local paper. In
Toowoomba, Mary commented that ‘the community needs to be represented by a
newspaper because without it you don’t have a community. And that’s all there is to it
– even if it’s a bad one. It’s still a newspaper. We’d actually be worse off without a
bad Chronicle’. Everyone agreed with this and Peter said, ‘it would be a tragic affair
if the Chronicle did not survive and get better.’
In Launceston, the history of close association between The Examiner and Gunns, and
the latter’s subsequent rise to regional and statewide power, overwhelmingly taint the
newspaper’s identity for focus group participants. At the same time they value its
commitment to the local area. One said ‘Even though I’d like to see some opposition
to them I still religiously get The Examiner every day’.
Competition and advertising
The low quality of local media was linked by participants to the lack of competition,
and this extended to the experience of businesses when placing advertisements in
local media:
Jean, Toowoomba: I feel that it’s partly a drop in standards but also it’s partly selfsatisfaction because what we have here is a monopoly with our local newspaper,
advertising wise, everything. They run a monopoly and they know it.
From an advertiser’s point of view The Examiner’s record in Launceston was seen as
mixed. A participant involved in the industry said:
… it’s not what you know, it’s who you know that enables you to get your point of
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view through in those areas. In terms of our dealing with those (editorial) people
we’ve had some conflicts over things they’ve said about the industry we’re in…
We’ve used our advertising dollar muscle to say we’re not going to do this. I know
that in my past life with a major chain we’ve done that a couple of times, stopped our
advertising… We stopped for a little while but not too long because you can’t afford
to. They know that as well.
This experience of market power is heightened in Wollongong, where WIN has crossownership of the highest rating television and radio services and the major event
venue. This gives it what competitors see as an unfair advantage. Furthermore, if
WIN, for argument’s sake, were to take over the Illawarra Mercury, this would make
a situation competitors and advertisers already find disadvantageous into one that
gave them very little market power.
Informants point to the question of who has ‘clout’ in a place as the key issue. The
vernacular term suggests both a recognition of power and a questioning of its
legitimacy. Citizens do not particularly distinguish between the clout of media owners
and that of other power elites. In Wollongong, people regard WIN, the Mercury, the
ALP, property developers such as Stockland and the South Coast Labor Council, for
example, as having clout. All are seen as having unfair advantages in some respect,
and any links between them would be likely to increase this. Discussion by
participants on the clout that WIN exercises in Wollongong appeared to confirm the
tone of comments made by Janet Cameron, CEO of Grant Broadcasters (owner of the
rival station WAVE FM) to Senate Committee hearings on the Media Ownership Bill
in May 2002. When asked to comment on Wollongong’s unique cross-ownership
market she responded:
Yes, it’s a very difficult environment to work in ... The television station has
enormous clout. It is the heritage station in Wollongong. It is the number one station
– it is the Nine affiliate – and it really is the station that everybody in Wollongong
wants to be associated with because they have been associated with it for a very long
time. The station is able to use that clout. The entertainment centre is the WIN
Entertainment Centre. The sports arena, where the major league games are played, is
the WIN stadium.
What tends to happen? I will give you a recent experience. The Australia Day
Council wanted to use our radio station to promote and present the fireworks on
Australia Day. WIN said ‘No. If you want to use WIN you have to use i98’. I could
give you a dozen examples. In most cases people back off. Since WIN has had the
sponsorship of the Wollongong Entertainment Centre we have not had any
association with any artists that come to Wollongong. (Senate Hansard, 22 May
2002).
One advertiser, when asked what implications he saw for his business if crossownership rules were relaxed, alluded to the ‘potential for less rather than more
opportunities’ and noted that his company had ‘yet to really see any significant
negotiable gains via the WIN/i98fm link’.
These comments provide an indication, in the one market in Australia where the
leading television station and the leading radio station are owned by the same
company, of the difficulties faced by competitors in markets where there is crossmedia ownership.
Media ownership
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On the subject of media ownership, only media workers and academics showed
particular concern about the impact of proprietors, such as the Murdoch or Fairfax
organisations appointing people to manage the newspapers in line with company
policy. This group sees the deregulation of ownership as dangerous because of the
power that is likely to accrue to the major players. Many point to the particular
susceptibility of the Fairfax organisation to a predatory takeover. Rupert Murdoch’s
control through News Corporation’s ownership of the majority of press circulation in
Australia is not necessarily evident to readers and citizens as those newspapers have a
long history and are deeply entrenched in the community and market. However,
media academics saw great danger in allowing News Corporation to own television
services as well as the substantial press holdings. Media academics are concerned
about media power, while citizens are more concerned about the fairness and
transparency of political power, in which media organisations and personnel can be
major players, either through revolving doors, social networks or editorial decisions.
In Toowoomba, no one was concerned about cross-ownership. The sense was that
local media is so bad that it really could not get any worse and anything that might
help improve investment in the local community would be welcome:
Mary: If people are upset about one person owning it all, I’d say bring it on if they’re
going to police that and break it into those local, regional and national content – and
then international. There needs to be some kind of business angle so local journalists
feel they’re part of a bigger picture, trained in a better fashion, shipped around offices
or whatever. It could only bode well… What I guess is what people fear the most
which is one person’s opinion being forced upon everyone. I think that terrifies
people. But as far as the actual production, it would be fantastic if the Chronicle
actually was part of a Courier Mail, which was part of an Australian company. That’d
just make sense so that you do have one source.
Peter: That’s spot on, because I don’t think we’re in danger of being sucked in by
monopolistic views. I think all of us, or I think a very large proportion of this city that
cares about anything, do have regular access to alternative sources, via the Internet,
via other magazines and so on and I don’t think monopoly is a problem at all, if only
one could find some reason for the Chronicle to attach itself to a particular set of
standards. They used to, I really think we should be careful not to denigrate the
Chronicle historically because of the history of fine editors and fine work and a very
responsible newspaper in days gone by.
In Launceston and Wollongong, where there was a history of cross-media ownership,
focus group participants warned of the problems (editorial and advertising) that can
arise from undue concentration of ownership. The Launceston participants were
unanimous in their condemnation of Edmund Rouse’s past ownership of print,
television and radio, collapsing his criminal conviction with his business practices.
They expressed abhorrence of any change in regulation that might allow a repeat of
such a situation. Wollongong participants also saw dangers in monopoly ownership if,
as they had good reason to suspect, the local media are implicated in local power
structures, as the potential for corruption increases. As long as the ABC provides a
credible alternative forum to the local newspaper, this may allay many people’s fears,
although the security and robustness of local radio can never be guaranteed in an
unsympathetic political climate where there are many demands on the organisation.
In summary, the regulatory argument that a plurality of owners will lead to a diversity
of voices is not supported by these case studies, for commercial radio and television
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make a limited contribution only to citizen discourse. Furthermore, examples have
been cited of a common owner (e.g., News Corporation) allowing different editorial
policies.
But there is a problem with regional news in Australia. People are deeply dissatisfied
with the quality of local media. Further, there is demonstrated experience of the
problems that undue concentration of power can create for smaller communities. In
this case, it is appropriate to ask whether further consolidation will further damage
local news cultures and, by extension, the communities in which they operate.
International developments in ownership and content regulation:
New Zealand, United Kingdom, Canada and the United States
All of the nations examined in this report (Australia, New Zealand, the United
Kingdom, Canada and the United States) have in the past two decades responded to
the pressures of neo-liberal market policies now pervading the global economy.
Although there are strong pressures to further liberalise ownership policies where they
are retained (Australia, the UK and the US), and on top of already significant dilution
in the UK particularly since 2003, these nations have retained core aspects of their
ownership regimes.
In contrast, the lack of foreign ownership restrictions in New Zealand has resulted in
all major media in private hands being held by foreign corporations. This is a very
different situation to the UK or Australia, where, especially in Australia’s case, the
debate has been focused on the possibility of introducing diversity into our
concentrated media landscape. The lack of cross-media regulation in New Zealand
leaves it exposed to on-going reconfigurations in what is after all, a relatively small
media market. In the event of changes to ownership laws in Australia, there may be
flow-on impacts in New Zealand, where Australian companies own a large proportion
of media assets. The steady increases in local content (and subsidy for its production
at a regional level) indicates its perceived importance to New Zealanders, at a time
when their media is still recovering from the ravages of deregulatory policies.
In the UK, the 2003 Act has continued the liberalisation of media ownership. Yet the
British Government has retained key restrictions on cross-media ownership, with caps
of 20% on national and regional television and newspaper cross-ownership. Radio
ownership rules provide for a default setting of a minimum of ‘three voices’
(television, radio, newspapers), and provide that there will be at least two local radio
stations in addition to the BBC.
The UK established a public interest considerations test in the 2003 legislation. On the
face of it, deregulation of their regional television ownership has dramatically
concentrated ownership with a single dominant regional television network provider,
ITV plc – in effect allowing a monopoly. On the other hand, the strength of the public
service requirements now regulated by Ofcom is that there is an obligation to comply
with programming quotas in key genres such as news and current affairs. In this
regard, rules for regional television production and programming, and independent
production quotas, effectively ensure safety net levels of production.
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Ofcom’s recent Public Service Review demonstrated a commitment to the importance
of local content in regional output, and an awareness of the potential influence of new
digital television and broadband distribution technologies on local content provision.
In Canada, broadcasting regulators have taken the ‘pragmatic’ approach that, to
ensure an appropriate level of Canadian content is maintained on television and radio,
and is not overrun by less expensive (and generally more popular) programming from
the United States, Canada’s media needs to be allowed to consolidate into larger
corporations that can compete with its American rivals. As a counterbalance to
increased media ownership concentration and cross-media ownership, Canada’s
‘transaction tax’ on media mergers has provided a significant windfall for the
Canadian content production industry.
The lack of legislated cross-media ownership and media ownership limits, and the
flexibility the CRTC is afforded in its regulation of broadcasting licences, have
enabled the growth of large conglomerates such as CanWest with interests in
television, radio, subscription broadcasting, newspapers and the Internet.
As a result of three major media mergers in Canada during 2000-01, BCE-CTV and
CanWest-Global collectively now control over half of Canada’s commercial free-toair television stations, while 60% of the population get their local newspaper daily
from the same company that owns one or more of their local television stations. In the
Vancouver/Victoria area, CanWest-Global operates two television stations as well as
three daily newspapers. In both Montreal and Quebec City, Quebecor owns the most
popular daily newspaper and the most viewed television station.
What can be drawn from the Canadian experience is that, despite the best intentions
of regulators, it is difficult to avoid increased centralisation of news and current
affairs production (and consequent reduction in regional programming) from media
companies with significant nationwide cross-media interests, precisely because it is
the economies of scale and scope that can be achieved through rationalising
operations that makes such mergers attractive.
In the US, the largest of national media markets, proposed changes have included
increasing the national audience cap from 35% to 45%; allowing single companies to
own multiple networks; lifting a ban on cross-ownership, thus allowing a single
company to own both a TV station and a daily newspaper in the same market, and
easing restrictions on TV station ownership. They have all been rejected for the time
being.
Although Congress and appeal courts have largely disallowed these proposed rule
changes, significantly, the national audience cap has been increased to 39%, up from
the previous level of 35%. If nothing else, these compromises indicate the power of
media corporations to have their way on Capitol Hill. The provision in the 1996
Telecommunications Act, requiring periodic reviews of ownership rules, has ensured
that the deregulatory pressure will be maintained in future years.
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Conclusion: Content, consolidation and clout
If there is an indisputable finding from our research, it is that local print media are
seen as democratic institutions of paramount importance in sustaining local public
spheres. Citizens now feel that their newspapers are letting them down. Corporate
pressures are prominent among the reasons for this. If their ownership becomes even
more driven by corporate values, as is to be expected from any deregulation, this will
further erode these public spheres.
At this point in the evolution of Australia’s changing media ecology we do not see the
Internet and blogging as substitutes for well-established, widely distributed,
commonly valued and professional media outlets. Just as industrial companies and
developers must conduct environmental impact studies, we conclude that media
regulation must take account of the implications of satisfying particular industry
interests for the wider media field and its democratic social context.
We offer some specific conclusions, based on the findings of this research project.
ƒ
The regulation of ‘localism’ in the form of the licence condition imposed by the
ABA (now ACMA) on regional television broadcasters is an important means of
improving local services. In Townsville, for example, there is now competition in
television news, whereas previously there was none. While criticisms have been
made of the level of service required under this scheme, our research suggests that
these criticisms are probably misplaced. The point is not that the licence condition
sets the bar too low; instead, the evaluation of local television news without taking
account of other sources of local content risks regulation for the sake of equivalent
application of the rules, rather than for the needs of the community. Residents of
Toowoomba are unlikely to respond to a boost in the quota for Southern Cross (or
even for WIN) – instead, they want improvement in the quality of the Chronicle.
ƒ
This raises a familiar dilemma for federal parliament: there is no power to regulate
newspapers and, in reality, there is little justification for governments intervening
further in the control of newspaper content. Yet the Australian Parliament is
preparing to abandon one of the underpinning principles of cross-media regulation
in Australia: that we do not intervene and attempt to regulate bias in the print
media – instead, we regulate to ensure there is competition. On current proposals,
sometime in 2007, Australia will be a country which regulates neither the content
of newspapers, nor the number of owners.
ƒ
Although the importance the Canadians place on foreign ownership does not have
equal application in Australia, there is nevertheless a clear agenda on the part of
the Canadian Government to regulate in the public interest. There is a rationale
for the Canadian legislation that has its origins in the cultural interests of the
community. That this policy benefits certain Canadian companies is a by-product
of media policy, rather than its driver. The contrast with Australia could not be
more stark.
ƒ
In setting media policy for the next stage of digital services, we should ensure that
peremptory moves on media ownership do not lead to an even smaller number of
players securing control over content rights or other communications platforms,
including telecommunications and broadband services.
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ƒ
Though few of the citizens of regional Australia interviewed in our case studies
made reference to trade practices legislation, they consistently pointed to the lack
of competition as a reason for poor quality. Consistently, residents of regional
Australia saw the media as a local public sphere or polis, not just a market for
local advertisers.
ƒ
The vernacular term ‘clout’ draws attention to the legitimacy of power, and this is
likely to be different in each polis. Though News Corporation, for example,
indubitably has clout in the overall Australian press market, it does not necessarily
have such clout in Townsville or Cairns. WIN has clout in Wollongong but much
less so in Townsville or Launceston. Gunns have great clout in Launceston. To
investigate whether media companies have, or might gain, undue clout in a polis
will require understanding its general political and media characteristics, rather
than a ‘head count’ of the players in the market.
ƒ
The ‘minimum number of players’ test proposed by the government will not work
effectively as a safety-net to provide an adequate level of diversity and prevent
further consolidation. In Toowoomba, the number of separate players could be
reduced from eight to four; in Wollongong and Townsville, the number of
separate players could be reduced from six to four; while in Launceston the
reduction could be from five to four.
ƒ
The alternative to a ‘minimum number’ approach must be a test that recognises
the difference between media outlets. In the markets we have examined, it is clear
that some mergers would result in a profound disruption to the news culture of
those communities. Examples of mergers that would damage the public sphere
are:
o
o
o
o
In Wollongong, the Illawarra Mercury and WIN Television
In Toowoomba, The Chronicle and WIN or 4GR
In Launceston, The Examiner and 7LA or WIN or Southern Cross
In Townsville, the Bulletin and 4TO.
This is not to say that other mergers would not produce adverse results; but
equally, it could be the case that other combinations of media assets would have
minimal impact on the community. Our conclusion is based on a recognition that
there is little competition and, contrary to claims by proprietors that consolidation
would raise the standard, we fear that partnerships between the only real sources
of local news will have the opposite result – that standards will decline. Our
conclusion is that a test for diversity should identify the mergers that matter.
ƒ
In developing a test that would enable the regulator to examine the nature and
effect of media mergers, a preliminary scoping of the whole market would be
necessary to identify the principal sources of local news, other forms of news and
local information, and local advertising. The assumption would be that where
there is a small number of genuine sources of such content, mergers between those
sources would be opposed. Our discussions with residents of four regional
communities suggest that authorisations for mergers must take account of factors
such as: any commitments to maintain or create newsrooms with resident
journalists; the extent to which cross-promotion of merged media outlets might
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harm competition within the market; the availability of equivalent alternative
sources of local advertising; other business interests of the company and its
connections with other local power elites that might affect editorial practices.
ƒ
A new role for the ACCC in media regulation needs to evolve. If the ACCC is
unable to adequately test the effects of a proposed merger on a local market for
news – as distinct from information or data – then there must be genuine
consideration of the kind of test that the Productivity Commission described – a
media-specific public interest test. This test must be capable of recognising the
difference between a story on forests written by a Launceston journalist and story
on forests filed by Reuters.
ƒ
Before deciding on a new method of regulating media ownership, there should be
public disclosure of the ACCC’s proposed new approach to media mergers.
Consideration should be given now to the intersection of competition regulation
and the ‘minimum number’ test proposed by the Minister, based on five
companies in metropolitan markets and four companies in regional markets.
ƒ
The opportunity presented by the review of media policy should not be
squandered. If cross-media rules are to be abandoned and foreign ownership
restrictions are to be lifted, safeguards are needed to ensure that the quality of
regional print and television broadcasting does not follow the path of regional
radio. Even allowing for the limits on constitutional power, legislation that
facilitates cross-media ownership might, in practice, offer the most effective
means of placing conditions on the further growth of media companies that take
account of the public interest as well as corporate interests.
ƒ
How do we regulate for quality? This is a question that demands the attention of
policy-makers. It is a question for now, not for later and it is not answered by
further deregulation alone. In this respect, there is similarity between regional
media and regional telecommunications. The Estens review of regional
telecommunications set the quality-of-service benchmarks for the full privatisation
of Telstra. Similarly, an ‘Estens’ approach to regional media might take this as its
first principle: no further deregulation until services to the bush are up to scratch.
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Key findings
ƒ Our interviews and focus groups in Wollongong, Launceston, Townsville and
Toowoomba reveal a high level of dissatisfaction with local news cultures in
regional Australia.
ƒ In print media, this is perceived to be a result of cost-cutting and the expansion of
advertising, sport and lifestyle coverage. For broadcast media, while there is a
small number of dynamic local radio and television services, national syndication
of programming and low production standards mean that regional communities
more often see television and radio – with the exception of the ABC – as
entertainment media rather than sources of serious news and current affairs.
ƒ People in these communities feel very strongly about the role of local media and
particularly, the way they have been ‘let down’ by their local newspaper. Residents
of all locations point to the lack of coverage of major local issues. Residents of
Toowoomba said they had received more information (through national media
sources) on Sydney’s proposed desalination plant than they had on Toowoomba’s
proposed water recycling plant.
ƒ In some locations, citizens have no confidence in the capacity of local media to
fulfil the traditional role of monitoring the political sphere and exposing
corruption. Everone recognised the influence of local editors and the ‘clout’ that
some media companies have in their communities. In some cases, people thought
that local media were too closely implicated with other local power elites, such as
the Labor Council and the ALP in Wollongong or the powerful Gunns corporation
in Launceston. People were wary of any moves which would help to consolidate
these local power elites and further erode the quality of the local public sphere.
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CONTENT, CONSOLIDATION AND CLOUT
ƒ Despite this, all focus group participants emphasised the crucial role of local media
in their communities, particularly the local newspaper. In general, they did not see
changes in media owners as a threat to their community; instead, they consistently
pointed to a lack of competition as having a direct effect on declining quality. In
some locations, participants observed how local companies had a stranglehold on
advertising not seen in other locations where there was greater competition.
ƒ An analysis of potential media mergers shows that there would be significant
consolidation and fewer players in the market if all cross-media laws were
removed. But similar consolidation and reduction could occur under the
government's proposed ‘minimum number of players’ test. In the four locations we
studied, Toowoomba would see a reduction in the number of separate players from
eight to four, while Wollongong and Townsville would go from six to four. Only
Launceston would benefit; applying the test there could result in the current five
media companies becoming four, rather than three if there were no test at all.
ƒ While our survey of local experience of regional media suggests that concerns
about the influence of owners over editorial content are largely misplaced, mergers
have the potential to further damage the news culture and the communities that
culture serves. Some participants suggested that mergers could be beneficial
provided there was some way of providing a genuine guarantee that new owners
would be required to invest in the quality and quantity of local coverage.
ƒ Our analysis of potential mergers combined with the survey of local views
suggests that some potential merges are likely to have little negative effect on local
communities. The problem is that the ‘minimum number of players’ test simply
performs a head count of local media companies. It is not able to distinguish
between a low-rating horse racing radio station and the crucial source of local news
and information – in most cases, the local newspaper. At present, neither is there
any guarantee that competition law would provide an adequate safeguard.
ƒ A review of overseas approaches to media ownership and local content regulation
indicates that other governments and regulators have developed tests that permit
the regulator to make a qualitative assessment of the companies involved and the
real effects of proposed mergers. The governments of the US and the UK, while
permitting significant liberalisation of ownership laws, have nevertheless retained
core limits on cross-media ownership. Other jurisdictions also provide examples of
serious commitments to regulatory mechanisms that can enhance regional content.
ƒ Against this background, if Australia choses to abandon the current cross-media
laws, there are two options that could continue to protect the public interest, and
specifically, the interests of regional Australia:
o
Develop a better diversity safeguard than the ‘minimum number’ test,
based on qualitative evaluation of the local media market, then package that
test with genuine, proactive mechanisms for boosting local content; or
o
Invest in a more comprehensive approach to the application of trade
practices regulation to media mergers so that the public can be assured that
their experience of a lack of competition can be accounted for in a trade
pratices test. If this test could not be packaged with suitable undertakings on
local content, broadcasting law could be used to impose suitable
requirements.
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CONTENT, CONSOLIDATION AND CLOUT
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© COMMUNICATIONS LAW CENTRE 2006
26