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Convergence Review: media business as usual

Dull grey tone: media organisations are “Content service enterprises”, according to the Convergence Review. AAP

The Convergence Review’s final report is remarkable for its blandness and predictability.

Despite the cries of fear and loathing from the Murdoch stable that the cold hand of government intervention was upon us, the review has explicitly rejected Ray Finkelstein’s suggestion that a statutory News Media Council should be established by legislation.

What we have in this report is an attempt to play regulation catch up with digital convergence, while preserving flexibility to adapt quickly to further change. It is a difficult balance and the report fails to meet the challenge.

The Convergence Review has opted to suggest a set of principles, rather than prescription in order for any new regulatory regime to remain nimble and effective. Unfortunately, the recommendations are weak and in some cases almost totally unworkable.

Two tier regulation

There will be two types of regulation in the system proposed by Glen Boreham and his fellow reviewers. The first will be a much trimmer version of the Australian Communication and Media Authority that will apply a very light touch regulation of ownership issues and spectrum allocation and it will incorporate a revised classifications process for media content (except news and current affairs). New regulations will be applied to media companies according to their size and reach. If companies outside the limit grow, they will then be included.

To establish the second arm of self-regulation, the review has politely invited the nation’s top 15 news content providers to join what would essentially be a souped-up Australian Press Council. These top 15 providers are measured by audience reach and revenues with the cut-off for regulation being revenue of around $50 million a year and/or audience reach of about 500,000 per month.

In a line straight out of “Yes, Minister”, the report has coined a new term that continues the dull grey tone of the text. Media organisations – whether in print, broadcast or online, will be henceforth deemed to be “content service enterprises”.

This bureaucratic mouthful sits alongside other gems of government prose such as “uniform content scheme” and “television-like services”. The new self-regulation body will only apply to the major “content service enterprises” whose business is the provision of news and commentary and membership is voluntary.

In what appears to a rejection of the Finkelstein proposal to bring bloggers and social media into the regulation net, the size and service provisions, and what the report describes as the publishing or broadcast of ‘professional news and commentary’, means that amateur and citizen journalism is not subject to regulation. But Telstra and Google too would be outside the framework, according to the Review’s figures. This has naturally upset some of the other media players.

Clayton’s reform

This report and its recommendations is the sort of Clayton’s reform we have come to expect from expensive government inquiries; fiddle with the terminology, shuffle the paper, look busy for a while, collect the cheque and quietly slip out the backdoor.

The report is very business friendly – there’s nothing in here to frighten the market and nothing to excite or enthuse anyone campaigning for real and meaningful change. The only substantial achievement in this review is a recognition that convergence in media technologies and platforms means that there must be some sort of change. However, only mild change has been proposed; really it’s no more than tinkering.

Spectrum Fees

The broadcast licence fee will be replaced with a spectrum fee, so this alteration to the status quo – while appearing significant – is only semantics. Media organisations will still pay for the right to broadcast free-to-air TV, but the spectrum can be bought and sold or traded on the open market.

Local Content

The report recommends that the ABC and the SBS be brought into the new Australian content rules through designated quotas and levies on the commercial networks. The “converged content production fund” will be used to produce content, but whether or not it will go past “New Same, with added MORE” is yet to be decided.

Industry-approved regulation of news and commentary

The key recommendation about news and current affairs is the “industry-led” body that will oversight “journalistic standards” across all platforms. This is a Press Council on steroids.

The self-regulatory body for news and commentary – the Press Council supersized – would administer codes around fairness, accuracy and transparency; hear complaints and make determinations and regulate “journalistic standards”. Platform neutrality is a key determining factor emphasised in this report, which argues there is no longer any justification for separate self-regulation given the platform cross-over between publishing, broadcasting and online delivery.

However, getting the various industry groups and media companies to agree to this structure may be difficult. Current arrangements for the Press Council and for commercial radio and commercial television providers are purely voluntary, but the Review sees this as a “structural weakness” and argues that the largest content service enterprises should be pushed to join: “The structural weakness of this purely self-regulatory model is addressed under the Review’s approach, which will ensure that all content service enterprises are subject to standards and sanctions set by the news standards body.”

The government’s “stick” to ensure compliance with this approach would be that current exemptions to privacy or competition law enjoyed by news providers would be conditional on membership of the new self-regulation body. The radio and television industry lobby groups have not yet responded to the Convergence Review report, but it is hard to imagine them giving up their independence without inducements or coercion.

At best this suggested change amounts to a new set of dentures for the existing publisher’s poodle. It will be able to accept sanitised government funding in ways that will not upset the old-guard in the newspaper industry who see Armageddon in every attempt at regulation by government. There is no indication in this 170+ page report that there is any real problem or issue with media accountability and standards in Australia. This is a whitewash of the highest standard.

A public interest test for ownership

The report pays lip service to the idea – long argued by critics of the mainstream – that market forces can lead to oligopoly and monopoly and that this is bad for media “diversity”. A public interest test will be introduced that will examine ownership issues from a broader perspective than simple market economics and the test would be invoked when a “content service enterprise” changes ownership. However, no one contemplating becoming a media mogul should be too concerned, despite howls of protest that this change somehow “politicises” the review process. The Review argues that the onus of proof should be on the regulator to prove that a proposed sale is not in the public interest.

The previous market-share ownership rules will be replaced, but the new system sounds remarkably like the old one. The new rule will be known as the “minimum number of owners” clause. The often cumbersome rules regarding television, radio and print media will be removed, but the networks and newspapers have not had their ambitions of no ownership rules at all realized. The effect of the public interest test will not be known until it is tested in use, but the Australian media market is already heavily controlled by a few companies and this is likely to remain the case. There is no positive suggestion that existing near-monopolies be dismantled. Under “minimum number of owners”, hybrids such as NineMSN and Yahoo will also be caught up in the regulatory net for the first time.

The report says these rules should be complementary to the ACCC and other competition regulation, not duplicate them; so it is hard to see that there will be teeth in the public interest test. Just in case though, there is an out clause that allows the public interest to be over-ridden if there is a greater public interest in allowing concentration of ownership. Sir Humphrey’s fingerprints are all over this report.

Security for public and community broadcasting

The report recommends that community television be given some certainty about its future and argues that the abolition of licence fees in favour of permanently allocated spectrum should benefit community broadcasters. It has long been a scandal that community television has been operating (for more than 20 years) on ‘temporary’ licences and the low threshold for sponsorship for community broadcasting limits its potential to increase revenue.

The report also recommends a review of the ABC and SBC charters to reflect convergence. This seems straightforward, but lurking behind the curtain is a move by the commercial operators to quarantine their activities from competition from publicly-funded broadcasters. This push has been led in the UK and Australia by Rupert and James Murdoch who have argued for years that the BBC and ABC are taking food from their mouths.

This is a self-serving argument and we will have to be vigilant to ensure that the ABC and the SBS are not hamstrung by any changes.

The political reality

The report has been released and the process is now in the political sphere for action. However, with an election due by October next year and the parliamentary landscape littered with bodies at the moment, it is highly unlikely that the Communications Minister will move quickly to implement any of the review’s recommendations.

The report suggests a staged approach to development and implementation of its recommendations, but stage 1—stand-alone changes that can be achieved in the short term, including the public interest test, requires that the new regulator be established first. I doubt Stephen Conroy will be in any hurry to move on this given the likely hostile response he would get from the Opposition and from some quarters of the media.

Overall this is a fairly mediocre piece of work – it does not attempt to do anything innovative or radical in relation to convergence, regulation or standards. The supersized Press Council (Mark II) may or may not get off the ground, but why would the broadcasters give up their own self-regulation systems in the first place?

This review, like many others, will gather dust. The words “fiddling”, “Rome” and “burning” come to mind.

News media regulation at a glance

The key features of the Convergence Review’s approach include:

  • major media organisations should be required to participate in any scheme regardless of platform and not be able to “opt out”
  • any scheme should have adequate funding, a majority of which should come from the industry
  • sanctions for failure to meet standards should be meaningful and credible
  • regulation should not impinge on free speech and an independent press.
  • The Review says that government-backed regulation of news content should only be a “last resort”.

In addition, the new self-managed body would, the report says, have the following characteristics:

  • the appointment of a board of directors, a majority of whom would be independent from the members
  • adequate funding and resourcing of the body and its operations
  • the establishment of standards for the production of news and commentary, including specific requirements for fairness and accuracy
  • the maintenance of an efficient and effective complaints-based scheme
  • a flexible range of remedies and credible sanctions, including the power to order members to prominently and appropriately publish its findings on the relevant media platform.

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