16 March, 2016
Key points
On 2 March 2016, the Federal Government introduced the Broadcasting Legislation Amendment (Media Reform) Bill 2016 (Bill) into Parliament. The Bill proposes significant changes to the regulation of media ownership and control in Australia.
If passed, the Bill would repeal two of the five major media ownership and control rules under the Broadcasting Services Act 1992 (Cth) (BSA), namely:
- the "75 per cent" rule; and
- the "2 out of 3" rule,
opening the way for a range of potential mergers and acquisitions across the Australian media landscape. The existing media ownership and control rules would remain, including the 5/4 rule (the "minimum voices" rule), the 1-to-a-market rule (for commercial television broadcasting licences) and the 2-to-a-market rule (for commercial radio broadcasting licences).
The Bill also introduces increased local content obligations for commercial television licensees in regional markets when a change of control event results in them joining a group of commercial television licensees covering more than 75% of the population.
The package has been referred to the Senate Environment and Communications Legislation Committee which is due to report in May.
75% audience reach rule
At present, section 53(1) of the BSA prohibits a person from being in a position to exercise control of commercial television broadcasting licences with combined licence areas exceeding 75% of the Australian population. There are related restrictions on directors under sections 55(1) and (2).
The Bill repeals all of these provisions, opening the way for possible merger activity between existing metropolitan and regional commercial television broadcasters.
2 out of 3 cross-media control rule
Sections 61AA and 61AEA of the BSA define when an "unacceptable 3-way control situation" will exist in a commercial radio broadcasting licence area. These and related provisions prohibit a person from being in a position to exercise control over the three forms of traditional commercial media (commercial television, commercial radio and an associated newspaper) in the same licence area.
The Bill proposes to repeal these provisions, as well as the related offences and civil penalties, prior approval mechanisms and other related provisions.
These amendments would open the way for increased cross-media ownership and a range of possible merger activity between some of the largest media companies in the country.
New local TV content requirements
The BSA requires certain regional commercial television broadcasting licensees to broadcast a minimum level of material of local significance during specified periods. This is done through a points based system that currently applies only to larger regional commercial television broadcasting licence areas (Aggregated Markets). These include licence areas in:
- regional New South Wales;
- regional Victoria; and
- regional Queensland; and
- Tasmania.
The Bill proposes to add to the existing system for these areas by specifying additional requirements that apply following the occurrence of a "trigger event". Pursuant to a proposed new section 61CV, a trigger event would occur when:
- a person starts to be in a position to exercise control of a regional commercial television broadcastinglicence; and
immediately after that event:
- the person is in a position to exercise control of 2 or 1 more commercial television broadcasting licences; and
- the combined licence area populations of those licences 3 exceed 75% of the population of Australia.
This means that a trigger event would occur when a regional commercial television broadcaster joins a larger commercial television broadcasting group extending to more than 75% of the population.
Following a trigger event, the Bill proposes that relevant broadcasters in Aggregated Markets would be required to provide an average of 30 points of additional local content per week therefore requiring a total of 150 points on average per week over each six week period (totalling 900 points over 6 weeks, with a minimum of 120 points each week).
Under the Bill, other regional non-aggregated markets would, for the first time, also be potentially subject to points requirements. Following a trigger event, relevant commercial television broadcasters in such markets would be required to broadcast an average of 60 points of local content per week over each six week period (totalling 360 points over 6 weeks, with a minimum of 45 points each week).
In addition, the number of points awarded for local news programming filmed in local areas would be increased under the Bill, to incentivise local programming and filming.
Remote areas would not be affected by the new local content requirements.
If enacted, the additional requirements outlined above would not apply until six months after the relevant trigger event. Licensees would be required to provide the ACMA with an initial report on their compliance with the obligations 18 months after the trigger event with a second report one year later.
Comment
The media ownership and control rules in the BSA were originally designed to foster diversity across newspapers, commercial radio and free-to-air television broadcasters. The Government's position is that this legislative framework is no longer appropriate for the modern media environment. In the context of the proliferation of internet based players (SVOD, TVOD, IPTV, OTT and subscription audio services), changes to the media control and ownership rules have been anticipated for a number of years.
As well as introducing the media reform package into Parliament, the Government has also referred the package of legislation as a whole to a Senate inquiry.
The closing date for submissions to the Senate inquiry is 21 March 2016, with the Senate committee due to report by 12 May 2016. Details of how to make a submission are available here.
Support for the Bill in the Senate is not yet assured, with the timing of the federal election also potentially a factor that could have an impact on the potential passage of the legislation.
For further information, please contact:
Adrian Lawrence, Partner, Baker & McKenzie
adrian.lawrence@bakermckenzie.com
