Chapter POLICY AND REGULATION STUART CUNNINGHAM WHERE DOES THE POLICY APPROACH SIT WITHIN MEDIA AND COMMUNICATION STUDIES? Policy issues are central to the study of media and communications, and may" involve a discussion of political economy, public administration, politics and government. In order to come to grips with these issues, you may therefore find yourself studying everything from technical policy handbooks (e.g. Althaus, Bridgman and Davis 2012) through to racy critiques of unbridled deal-making, the power of media tycoons and spectacular corruption—such as the News Inter national phone hacking scandal of 2011-12 ()TA | THE MEDIA AND COMMUNICATIONS IN AUSTRALIA Discussion of policy issues are also often grounded in normative assumptions about how media should perform, Such assumptions typically include the independ ence of media outlets, broad community access to media, diversity of media content, objectivity of media content (especially in the area of news), promotion of social solidarity and cohesion, cultural pluralism and the promotion of quality media (see McQuail 2010). Such concerns are often grounded in a political economy approach, which has for the most part explored these questions in order to demonstrate the complicity of governments and regulatory agencies with the dominane economic interests in the media, as part of a larger project of establishing the functional (if at times contradictory) role of the state in the management of Australia’s society and economy. In Australia, chis approach undergirds the ‘media maces’ approach to policy studies, which focuses on human agency and the contingencies of the policy process. Te stresses the ways in which normative goals of media policy have been subverted by close pattems of interaction berween Australia’s powerful media proprietors, most notably the Packer and Murdoch families, and leading figures in both the Liberal and Labor Parties (e.g. Chadwick 1989; Griffen-Foley 2003, 2009; Masters 2006). To understand the underlying logic of ‘media mates’, it must always be borne in mind that often the most effective and powerful influencers of government policy (and therefore che generators of much policy themselves) remain those whose commer- cial interests are most directly impacted by such policy. Owen and Wildman (1992, Pp. 24-5) state this with bluntness about another country: In the United States, as in other democratic societies, che process by which government makes and implements policy can be influenced by individual firms, acting alone or {rough associations, In the past, firms and industries made effective strategic use of their porental to shape government policy, Those who did not succeed in influencing policy became the victims of those who did Some would argue that the ‘media mates’ era came to an end in 2005 when Kerry Packer died, after which his son James Packer moved rapidly out of major holdings in media in favour of casinos and gambling. Buc chat, if anything, has placed an even stronger spotlight on the influence exerted by Rupert Murdoch's News Limited. And in 2011-12 mining tycoon and Australia’s wealthiest person, Gina Rinehart, acquired large stakes in Ten Network Holdings and, for a time, Fairfax Media, in what many saw as an attempt to exert influence. Cultural policy studies represents a left-of-centre, reformist position that attempts to connect political economy with achievable change. Against thePoticy AND REGULATION | 75 traditions of the Marxist left, cultural policy studies argues that real political and social change is possible in liberal-capitalist societies, and that one condition that enables advocates to more effectively achieve such goals is the capacity to learn the ‘language’ of decision-making agents and to participate in policy formation. Policy advocates (Bennett 1992; Cunningham 1992) contest the Marxist cipher image of public policy (Dunleavy and O'Leary 1987), where policy is seen largely as the reflec- tion of outcomes achieved through elite bargaining among powerful agents ourside of the policy process. By contrast, they believe that an ability to influence both the principles or governing ‘discourses’ and the more ‘mundane’ technical, administra- tive and organisational aspects of policy formation can make a significant political difference, Ieis vital to recognise that reformist inspiration does not emerge full-blown from desk-bound theorising, Public-interest advocacy groups, consumer associations (like CHOICE), youth media groups (such as the Australian Children’s Television Founda- tion (ACTF), and sector unions (such as the Media Entertainment and Arts Alliance (MEAA), play important roles in maintaining public participation in media policy, combining a commitment to public-interest goals with attention to the nuts and bolts of engagement with legislation and with bureaucratic systems and structures (Beattie and Beal 2007), This is a politics of bureaucratic reform that borrows more from American elite theory than from European neo-Marxist theories for its cheo- retical support. (The former posits that policy change is driven by struggles between elites rather than the assumption, seen in the latter theories, that elites reinforce each other's power and influence.) ‘The critical tradition of media and communication studies, which sees questions of policyas largely subordinate to understanding the main game of how economicand political forms of power interact in capitalist societies, has been under challenge from the centre-left of the political spectrum. Variations on the political tradition of social democracy—once dubbed ‘third-way’ political hought—argue that such third-way variation should no longer be seen as an inadequate halfway house between market capitalism and socialism, but rather as the best way to reconcile the core principles of the political left—such as a belief in equality, participatory democracy and social justice—with the challenges of globalisation, cultural pluralism and an increased assertion of the rights of the individual (Giddens 2001, 2002) Applied to media, chis approach can criticise leftist radicalism for its tendency to promote ‘paternalist corporatism’ (state-funded media are always better for you than commercial media) and become nostalgic over past golden ages at a time when. technological change, industry competition and the development of new produces ‘mote tailored to individual consumer requirements point to a need to seek new forms76 | THE MEDIA AND COMMUNICATIONS IN AUSTRALIA of synthesis between the promotion of dynamic competition and elevation of the principles of social and economic justice. Indeed, it is arguable that communications is one of the prime policy fields in which the balance between increased competition and social principles of access, equity and communication ‘rights’ needs to be found. Former Labor ministers Lindsay Tanner (1999) and Craig Emerson (2006) have Promoted this approach to policy generally. Trevor Barr has sought to outline such an approach to Australian communications policy (Bart 2000, pp. 1891). Highly normative approaches to policy assessment are not, of course, the sole preserve of the political left. At the other end of the spectrum, think-tanks promoting libertarian, small-government approaches (such as the Centre for Independent Studies orthe Insticute of Public Affairs) publish critiques of the ‘over-regulation’ of Australian media (eg. Berg 2012). (It should be noted, though, char libertarian approaches can be found on the left as well as the right of the political spectrum—for example, Lumby (1999, 2008)). Such studies adopt a pure neo-classical economic position on the Pitfalls of state intervention and the virtues of markets that, if applied, would place at considerable risk the viability of Australia’s media industries in a highly competi- tive global economy by programmatically limiting the role of government (with only minimum social regulation allowed). According to these approaches, public-sector commitments to cultural and industry development are held to be market distorting, inefficient and unsustainable in budgetary terms, Such advocacy also often positions itself as speaking for the concerns of mainstream citizenry against so-called ‘cultural elites’ Contemporaty approaches to policy and regulation have attempted to cake some of the ideological heat out of these debates. They emphasise the necessarily cooperative nature of regulation (the regulated must participate with the regulator in the outcomes of regulation), and the notion of regulatory design (state intervention must be fit for purpose, and constructed with the impact carefully thought through). In general, we can observe a principle of limiting regulation, eliminating outdated regulation and using regulation to protect and promote competition. These have been recurrent themes of Australian public policy since the mid-1980s, and they are enshrined in the goals and principles of the National Reform Agenda, adopted in 2006. The pro-competitive agenda—particularly in highly commercial areas such as telecommunications—sees fair degrees of agreement across the political spectrum (eg, Frgas 2008). The 2011-12 Convergence Review (Australian Government Depart- ment of Broadband, Communications and the Digital Economy 2011) provides an excellent case study of a contemporary approach to policy and regulation,pouicy AND REGULATION | TT MEDIA AND COMMUNICATIONS POLICY IN AUSTRALIA “The next part of the chapter provides abrief overview of the principles and actual public policy-making practice in media and communications in Australia. The components of such policy consist of laws (around competition, ownership and control, defamation, copyright, contempr, sub judice, vilification, obscenity, blasphemy, sedition), regulations (for example, for Australian content on commercial broadcasting) and policies (of a political party or ofa government, which may be enacted into laws or regulations), Media and communications policy is the province of the relevant federal minister, supported by the associated bureaucracy. Section 51(v) of the Australian Constitu- tion gives the Commonwealth powers over ‘postal, telegraphic, telephonic and other like services’, which is interpreted as giving federal government responsibility over broadcast media and the internet. The relevant department is currently the Depart- ‘ment of Broadband, Communications and the Digital Economy (DBCDE), but it has been called many things in the past (which you may come actoss in your reading): Postmaster-Genetal (co 1972); Media (1972-75): Communications (1976-86); Trans- port and Communications (1987-93); Communications and the Arts (1994-96); and Communication, Information Technology and the Arts (1996-2007). This portfolio area leads the development of national policy, and implementation through laws and regulation (but should interact effectively with other portfolio areas). The name change to DBCDE has become progressively more relevant, particularly with the rollout of the National Broadband Network (NBN) and the government's Digital Economy Goals in. areas of access, health, education, employment and government services. In undertaking a policy approach to media and communication issues, you will also encounter different types of government action, Thete ate ‘carrots’ (incentives that encourage certain behaviours such as the production of children’s or other Australian, drama and documentary production) and ‘sticks’ (prohibitions on certain behaviour, such as tacial vilification). There is direct regulation (rules for minimum levels of Australian sgulation (in the form of industry codes, including those of print media, commercial television and radio, pay TV, advertising and community broadcasting). We have already encountered the notion of co-reguation (cooperation between the regulator and the regulated.) Deregulation refers to attempts to reduce the amount and costs of regulation by shifting away from ‘specialist’ to ‘generalist’ regulation, ‘The main principle we will follow here is the distinction between government action directed at ‘input’ (subsidisation of production) or ‘outpue’ (regulation to encourage and manage the distribution and exhibition of product) activity. The levels of output regulation are based on the perceived nature of the specific media, Traditionally, the ‘arts’ have been considered artisanal or non-industrial in nature,78 |_ THE MEDIA AND COMMUNICATIONS IN AUSTRALIA and have attracted a subsidy or input approach from government. The ‘media’ have been considered industrial in nature, and have attracted a regulatory or output approach. This latter approach varies along an axis ranging from a highly regulated broadcasting industry to the vircual open market (subject to generic laws of defama- tion, libel, obscenity, racial vilification and so on, based on community standards) in print, video and film distribution and exhibition, Print The print media (in the absence of an independent regulatory authority) are subject to general laws regarding trade practices, competition and monopoly, as well as the laws of defamation and contempt. The general provisions of the Trade Practices Act prohibit mergets that would result in one company being in a position to ‘dominate a market’. The Trade Practices Act is ‘general’ law, and typically does nor operate with precision and pertinence in the area of the media, As we shall see in the next section, print media ownership is highly concentrated, but it needs to be said chat there are powerful inhibitors to the operation of principled competition policy in Australia, given its small market, high barriers to entry because of infrastructure costs, and a rapid loss of the sector's profitability due to declining readership and loss of classified advertising revenue. ‘The only medium-specific form of regulation is through the Australian Press Council, a self-regulatory body established in 1976, The council is funded by press ptoprietors, and voluntary membership includes public representatives as well as representatives from the major publishers. Although freelance journalists sit on the council, the industry union, the Media, Entertainment and Arts Alliance (MEAA), is, not represented. The Press Council’s rulings in response to complaints about media practice have historically offered an example of feather-like, rather than even light touch, regulation. In 2012, following the release of an Independent Media Inquiry report that raised the prospect of a statutory regulatot for the industry in the light of heightened concerns about press performance, the Press Council's resource base and membership were substantially strengthened (see Box 5.1) Broadcasting Broadcasting is very different. Two principles have traditionally grounded higher levels of regulation in this sphere. Broadcasters use the airwaves (the electromagnetic or radio spectrum) to transmit to their audiences. The spectrum is a public resource, and its capacity to carry broadcasting signals is not unlimited, thus its ownership, leasing and licensing are regulated. Second, it has been held that the media of sound and image have greater power to influence their audiences by virtue of theit pervasivePOLICY AND REGULATION | 79) presence in contemporary society, and because they are consumed en bloc to a greater degree than media of ‘choice’ (like print, of film and video). Television is watched and. radio is listened to as generic technologies. Their consumption is said to be less by direct selection of specific, separable items than is the case with media that depend on. payment for the delivery of each service. This, of course, is why so much advertising is inserted into the ‘flow’ of television and radio programs. Structural regulation to underpin diversity (with three categories of broadcaster—commercial, community, and national or public) is also considered as a desirable policy outcome. The broadcasting system was established under the Broadcasting Act 1942, which defined service areas, determined the appropriate number of licensees within a service area and set out criteria for who could hold a broadcasting licence and for the conduct of those licensees. These provisions applied to the commercial sector and the commu- nity sector, though not co the public service (or national) broadcasters, the ABC and SBS, whose legislation is the Australian Broadcasting Corporation Act 1983 and the Special Broadcasting Service Act 1991. ‘The Broadcasting Services Act 1992, the legislation that currently governs this area of the media, marked a major philosophical as well as regulatory change in broad- casting policy, and replaced the old legislation—described by the chief regulator of the time, Peter Westaway, as ‘a poor, wretched animal, designed for reasons which are less and less relevant and made grotesque by years of patchwork amendment. Premised upon the idea of a transition from media scarcity to media abundance with the development of cable and other new technologies and services, it was intended to apply light-touch regulation in order to facilitate the entry of new competitors and technological developments. Ir also marked a move from over-arching regulation by government bodies towards a greater degree of self- and co-regulation, But that was a generation ago. Broadcasting regulation is due for another big shake-up, and its possible shape has been sketched by a wide-ranging Convergence Review, which we will consider at the end of the chapter. Film and video The film and video production, distribution and exhibition industries largely have followed the press model of regulation. There have been variousattempts to regulate the distribution and exhibition sectors of the industry in the form of quotas for Australian material, and even anti-trust style divestment recommendations in the early 1970s. However, it has remained a structurally unregulated market characterised by oligopoly and significant levels of foreign ownership in distribution, Rather than regulation, government intervention in film is characterised by subsidy and support along the lines of arts patronage. The major approach of government policy has been to subsidise the80 |THE MEDIA AND COMMUNICATIONS IN AUSTRALIA production, rather than intervene through structural regulation in the distribution or exhibition, of film in Australia (although there are also subsidies for alternative distri- bution and exhibition, including some support for new forms of exhibition such as digital cinema). The video industry is even less the object of regulatory intervention or ‘of government subvention than film. Classification and issues regarding the censorship of objectionable material constitute the main forms of regulation, although general competition regulation applies. As more and more film and video are consumed online, this sector is being caught up in issues of convergence of technologies. Arts The governance of the traditional arts is the purest form of input intervention. Consistent with its comparatively long history, this governance also exhibits a highly coordinated approach, with one major federal body, the Australia Council with the various state arts bodies (through the mechanism of the Cultural Ministers Council) to provide subsidies to a wide field of arts activities, which range from elie ‘flagship’ national companies in the areas of opera, ballet and theatre to community arts in far flung regions of the nation. Government has intervened also by providing tax incentives (one could argue with their extent and effectiveness) to encourage corporate support and by serting up the Australian Business Arts Foundation (ABAF), a body now folded into the Australia Council. ceracting, Internet and telecommunications By contrast, the internet, as a highly decentralised global network, has not been amenable to such nationally based policy approaches. Attempts by the Gillard Labor government, for example, to introduce compulsory filters for objectionable internet content were met with considerable industry and community concern, as they would catch much more than is intended and slow down broadband speeds. Ultimately, the proposed filter proved to be untenable and the idea was abandoned in 2012. Telecommunications has seen dramatic shifts in policy and regulatory arrange- ‘ments. Since the early 1990s, telecommunications policy has moved from a system based around a highly regulated public monopoly and universal provision of basic services fo a system based on much more open competition between multiple carriers, regu- lated generically by the Australian Competition and Consumer Commission (ACCC). Having said this, che market is still dominated by the major incumbent, Telstra, from which most of the other telecommunications providers have to purchase access to basic network infrastructure, Since 1997, chere has been no limit on new service providers, with strong growth particularly in the area of mobile telephony. There is competitive tendeting among carriers for provision of services that need subsidising because theyPOLICY AND REGULATION | BL may never be profitable, such as connections to rural and regional areas, pay phone services and services for those on low incomes or with disabilities, Such moves have been part of an international trend towards liberalising access to telecommunications markets, privatising former public monopoly telecommu- nications carriers, and implementing the principles of national competition policy Underpinning changing telecommunications policy is a move from conduct regulation, where restrictions on market entry constitute a condition for ensuring chat incum- bent providers meet social policy objectives, to structural regulation, where a more competitive environment is promoted as a condition for generating a more efficient and innovative industry that is more responsive to consumers and other end-users. Ic is incorrect to see this as deregulation, as competition has required a more active role for the general regulator, the ACCC, in the industry—particularly to ensure that competitive safeguards exist for new service providers in accessing the infrastructure of the incumbent providers such as Telstra. But the most dramatic shift occurred in 2009 with the announcement of the NBN-—the largest infrastructure project in Australian history. Catried out by a wholly owned state enterprise, NBN Co, using an estimated $36 billion of public money, this, provision of fast broadband infrastructure throughout the nation signifies a massive reintroduction of the state in the wake of the privatisation of Telstra. The broader significance of this policy, which has seen an eight-plus-year rollout planned and is partly implemented, is that NBN infrastructure will be the portal for very ambitious digital economy goals (). It is also, understandably, a very contentious policy that may be much modified with a change of government, BOX 5.1: MEDIA POLICY PLAYERS Government ‘© Australian Communications and Media Authority (ACMA) (): ACMA has a number of responsibilities in the media and communications environment. Its briefis to: = promote self-regulation and competition in the communications industry, while pro- tecting consumers and other users. — foster an environment in which electronic media respect community standards and respond to audience and user needs — manage access tothe radio-frequency spectrum, and. represent Australia's communications interests internationally. [ACMA i also responsible for monitoring online content, including internet and mobile82 |THE MEDIA AND COMMUNICATIONS IN AUSTRALIA phone content, and enforcing Australia's anti-spam laws. It also informs the community about intemet safety issues, particularly those relating to children ‘+ Australian Competition and Consumer Commission (ACCC) (): The TIO provides a free and independent alternative dispute-resolution scheme for small business and residential consumers with unresolved complaints about their telephone or internet ser vice in Australia. Established in 199% and provided for under a federal Act of Parliament, the TIO is operated by Telecommunications Industry Ombudsman Ltd and is independ. ent of industry, the government and consumer organisations, The TIO is governed by a Council and a Board of Directors, and is managed by an independent Ombudsman appointed by the board on the recommendation of council * Screen Australia (): Screen Australia is the key federal government direct funding body for the Australian screen production industry. Its func: tions are to support and promote the development of a highly creative, innovative and ‘commercially sustainable Australian screen production industry. Screen Australia sup- Borts the development, production, promotion and distribution of Australian screen content by = supporting production of a range of content ~_ supporting the growth of screen businesses = Supporting marketing and screen culture initiatives = developing high-quality scripts and proposals = facilitating innovation and audience-engaging online content, and = supporting Indigenous talent and distinctive stories. Screen Australia administers the Government's Producer Offset and International Co- ’broduction Program to increase the commercial sustainabllty of production in Australia, Industry self-regulation + Australian Press Council (APC) (): The ACP is a set: regulatory body ofthe Australian print media, Along with promoting standards ofmediaPOLICY AND REGULATION | 8B. practice, enabling community access to information of public interest and protecting press freedom, itis responsible for adjudicating on complaints about Australian news- papers, magazines and associated digital outlets. Prior to 2012, the APC had minimal powers of regulation, and was economically dependent on the subsidisation of volun- tary member organisations, which retained the option of withdrawing from the Council at any time, CChanges to the Australian Press Council following the 2012 release ofthe Independ- tent Media Inquiry substantially addressed key concerns ralsed about its independence and effectiveness. The ACP’s vulnerability to funding withdrawal has been greatly reduced, and APC members have agreed to specific funding commitments for the next three years. The council has also strengthened conditions regarding membership. ‘Members’ obligations to provide funding and comply with Councit processes will now became legally binding. Members will be required to give four years’ notice of with- drawal from the Council, and remain part ofthe Council throughout that period they also remain subject to the council's jurisdiction to adjudicate on complaints about their publications. Publishers’ obligations to comply with the Councit's complaints processes will become legally binding, including requirements to publish adjudications with due prominence, * Communications Alliance (): The Communications Alli- ance was formed to provide a unified voice forthe Australian communications industry, land offers a forum for the industry to make coherent and constructive contributions to policy development and debate. It presents a unified role on behalf of the industry and its members—particularly in areas of competition, innovation and industry devel- ‘opment. Its prime mission is to promote the growth of the Australian communi industry and the protection of consumer interests by fostering high standards of busi ness ethics and behaviour through industry self-governance. ‘= Advertising Standards Bureau (ASB) (): The ASB adminis ters a national system of advertising self-regulation through the Advertising Standards Board and the Advertising Claims Board, The self-regulation system recognises that advertisers share a common interest in promoting consumer confidence in, and respect for, general standards of advertising. The Board provides a free public service of com- plaintresolution in relation to ssues including the use of language ~_ the discriminatory portrayal of people = concern for children = portrayals of violence, sex, sexuality and nudity = health and safety, and = marketing of food and beverages to children, Industry associations + Internet industry Association (A) (cwmwwiia.netau>): The HA is Australias national internet industry organisation, Members include telecommunications carriers, content creators and publishers, web developers, e-commerce traders and solutions provid- ers, hardware vendors, systems integrators and ISPs. The IIA provides policy input to84 | THE MEDIA AND COMMUNICATIONS IN AUSTRALIA ‘government and advocacy on a range of business and regulatory net laws and initiatives within Australia Free TV Australia (): Free TV Australia began life as the Federation ‘of Commercial Television Stations (or FACTS) in 2960. Itrow represents al of Australia's commercial free-to-air television licensees, and is one ofthe few industry bodies in Aus: tralia to represent every organisation in its sector. Free TV Australia formulates advice and recommendations in relation to policy and regulatory issues, engineering and tech- nical issues, The content of free-to-air commercial television is regulated under the 2010 Com- mercial Television Industry Code of Practice, which was developed by Free TV Austral and registered with the Australian Communications and Media Authority (ACMA). The Commercial Television Code of Practice covers matters prescribed in section 123 of the Broadcasting Services Act and other matters relating to program content that are of con: certo the community, including program classifications, accuracy, faimess and respect for privacy in newis and current affairs, advertising time on television, placement of com- ‘mercials and programs promotions, and complaints handling. Australian Subscription Television and Radio Association (ASTRA) (): ASTRA\s the peak body representing the subscription television industry in Aus- tralia an regulatory and policy matters. ASTRA is responsible for the development of the codes of practice for the subscription television industry in consultation with the ACMA. ‘Community Broadcasting Association of Australia (CBA) (): The BAA is the national peak body for community radio stations. CBAA members include fully licensed stations as well as groups aspiring to hold a permanent broadcast licence. At present, the CBAA has over 270 member stations, which are actively broadcasting nationwide, The CBAA aims to promote the values of the community broadcasting sec: tor, advance the interests of the sector through policy leadership, advocacy and public ‘campaigns, and raise awareness and knowledge of the sector. Australian Mobile Telecommunications Association (AMTA) (): The [AMTA is the peak industry body representing Australia's mobile telecommunications industry, AMTA members include mobile Carriage Service Providers (CSPs), handset manufacturers, retail outlets, network equipment suppliers and other suppliers to the industry. AMTA aims to promote both the mobile telecommunications industry in Aus: tralia and its contribution to the Australian community. ues regarding inter- Other media policy players ‘Australian Association of National Advertisers (AANA) () Advertising Federation of Australia (AFA) () ‘Commercial Radio Australia () Public Relations Institute of Australia (PRIA) () Media Entertainment and Arts Alliance (MEAA) () ‘Australian Children's Television Foundation (ACTF) () Consumers’ Telecommunications Network (CTN) (cwnw.ctn.org.au>)PoLicy AND REGULATION | 85. SELECT POLICY ISSUES Open virtually any newspaper or news magazine, or go to any major online informa- tion service, and you will ind grist for the mill of media and communications policy. Policy issues often dominate the business press, and sometimes the news and opinion pages as well. As examples, we will consider the enduringly public and contentious issue of ownership and control policies, as well as a recent forward-thinking and wide-ranging review of convergence that may continue to have reverberations into the future. Ownership and control ‘Ownership and control are perennial issues in the media garden. This is unavoidable when Australia has one of the most oligopolistic media sectors in the world. Box 5.2 provides details of the effects of major relaxation of the ownership and control laws governing all established media in Australia in 2007, What is at stake in media ownership deregulation? The arguments in favour of relaxation of the rules include the need, in a small market like Australia, for increased private-sector investment in the burgeoning field of media and communi Foreign investment will find Australia an easier and more attractive proposition, and the huge ‘institutional’ investors (insurance and superannuation funds managers) inside the country will want to invest more if the companies become larger and more profitable through consolidation. The large companies regularly argue that they need to be bigger if they are to compete in a globalised world. Those who argue against change, or for more restrictive ownership and control rules, insist that Australia already has one of the most concentrated media sectors, and that further concentration would mean even less diversity of views in sensitive areas such as news, current affairs and opinion. They point to the way the diversity of outlets has been reduced as media companies deliver value to shareholders in advance of their public service obligations, and argue that this would only increase under relaxed rules. One of the highly contested issues between protagonists and antagonists in the ownership and control debate is the principle of diversity. Traditionally, it has been held that diversity of ownership leads to diversity of content and perspective. No one disagrees with the desirability of diversity of content and perspective, but the idea that it can only be guaranteed through diversity of ownership is coming under attack. The claim can be made that the proliferation of media content on the internet makes assertions of untoward control over perspective outdated and redundant. This is surely a major ever-statement of the internet as a reliable alternative source. A more rions.86 | THE MEDIA AND COMMUNICATIONS IN AUSTRALIA elegant economic theoretical argument is that a major player may be in a better posi- tion to seek to address several readerships or audiences through diversifying content and editorial into niche markets than several smaller players tending to compete in the middle ground, driven to maximise their audience. ‘The rules under which media ownership operates were last amended in 2007. Box 5.2 summarises the changes that have occurred since 2007, and the state of play as of late 2012. Look out for further changes, particularly as a result of recommendations from the 2011-12 Convergence Review BOX 5.2: MEDIA OWNERSHIP AND CONTROL 2007- ‘The Broadcasting Services Amendment (Media Ownership) Act 2006 brought in new media ‘ownership laws in 2007. The new laws remove broadcasting-specific restrictions on foreign investment in Australia's media sector. The media remain a ‘sensitive sector' under Foreign investment policy, meaning direct media investment must be approved by the Treasurer. The Previous law restricted foreign ownership of broadcasting licences, such as preventing a foreign person controlling a company interest greater than 15 per cent, or more than 20 per cent of directors of a commercial television licensee being foreign persons. New ctoss-media ownership restrictions apply to commercial television and radio broad- casters and major newspapers (called ‘regulated platforms’). They prohibit transactions eae ree gerne ine ate ean ina licence area or in an ‘unacceptable media dive nn ‘unacceptable media diversity suction i jdged by counting points besed onthe number of independent reg lated platforms and media groups operating ina licence area. The law prohibits transactions teadingto there being ewer than five points in metropolitan licence areas or fewer than four points in regional licence areas. ‘The dramatic and largely unanticipated impact of removing foreign ownership restrictions was a major refinancing of free-to-air television by private equity firms, effectively taking much of the network ownership offshore into private institutional ownership. At the same time, liberalisation ofthe cross-media rules allowed consolidation by existing players; the ‘ownership of print, radio and television has been concentrated into fewer hands. ‘The number of controllers of commercial radio went from 34 in 2007 to 32 in 2010, and the ‘number of controllers of commercial TV went from eight in 2007 to seven in 2010, despite the release of new! Television Two commercial free-to-air TV networks, Seven and Nine, sold 50 per cent of their media assets into private equity arrangements (first Nine with CVC Asia Pacific and then Seven with Kravis Kohlberg Roberts), using the cash from the sales to position themselves for expansion into other media and non-media assets.poticy AND REGULATION | 87 ‘Nine Entertainment Cos majority owned by CVC Asia Pacific Limited. Nine’s television assets include the Nine Network (Sydney, Melbourne, Brisbane and Darwin), GO!, GEM, eXtra, NBN (broadcasting to the Central Coast of New South Wales and Gold Coast in Queensland). Nine also holds assets in pay television through Sky News (a joint venture with Seven and British ‘Sky Broadcasting) and shares joint ownership of the online venture ninemsn (50 per cent) with Microsoft. The assets of Seven West Media—controlled by Kerry Stokes—include Channel 7 (Sydney, Melbourne, Adelaide, Brisbane, Perth and regional Queensland), 7Two, 7mate and TV4ME. Seven also holds assets in pay television through its stake in Consolidated Media Hold: ings, which owns 25 per cent of Foxtel and Fox Sports, and Sky News Australia (33 per cent stake). Seven West Media's interests extend to radio (Redwave Media); newspapers (The West Australian—the sole metropolitan daily not owned by News Limited or Fairfax) and various West Australian regional newspapers; and magazines (Pacific Magazines, which publishes Home Beautiful, Who and New Idea); and a 50 per cent stake in Yahoo!7 Australia's other commercial television network, the Ten Network, is a consolidated entity held by a variety of multinational banking, financial and investment services companies. High-profile board members include chairman Lachlan Murdoch and director Gina Rinehart; the Australian mining magnate was appointed to the board after purchasing a 10 per cent stake in the company in 2010, Ten's television assets are the Ten Network; ONE; ELEVENCo (co-owned 66.6/33.3 per cent with US broadcaster CBC), TVSN and WIN Corporation Newspapers. The cashed-up Seven Network initially bought 14.9 per cent of West Australian Newspapers. (WAN). This has since risen to about 22 per cent, well over the defined controlling position, of 15 per cent under the pre-2007 laws. The highest rating free-to-air TV network in Western ‘Australia now has indirect control ofthe highest circulation daily newspaper and the second ‘most popular online news site (). When share prices were stil buoyant, Fairfax initiated a pre-emptive defensive move, merg- ing with the Rural Press group bringing nine more newspapers and seven commercial radio licences under the control of Fairfax Media, This created Australia's highest net value media group. The deal was valued at around $9 billon (including $2. billion in debt). At the time of the merger, the group held more than 240 regional, rural and community publications, nine radio stations and the leading New Zealand internet site, TradeMe, as well as 20 agricultural titles in the United States. Since then, Fairfax has had to sell down substantial holdings to ‘manage its high debt levels. ‘As of 2012, Fairfax Media controls 21 per cent of the metropolitan daily news market via the Sydney Morning Herald, The Age, the Australian Financial Review, the Canberra Times and regional newspapers in important cities such as Newcastle and Wollongong. Fairfax holds other print media interests, including Business Review Weekly and Personal Inves- tor magazines. In addition to its print interests, Fairfax is involved in radio, holding various metropolitan and regional radio licences via its takeover of Southern Cross Radio. Farfax’s online interests include Fairfax Digital (Brisbane Times, WA Today). Fairfax newspapers88 | THE MEDIA AND COMMUNICATIONS IN AUSTRALIA also dominate in New Zealand, and the company’s interests in that country also extend to magazines, the digital newspaper portal and the online auction -, News Australia Holdings’ parent company, News Corporation controlled by the Murdoch Family—added to its existing dominance of the metropolitan, regional and commu newspaper markets (around 7o per cent of newspapers in Australia) by acquiring the Federal Publishing Company's magazine and community newspaper interests (thirteen community newspapers, two commuter papers, 25 magazines and six online properties). The competition policy regulator, the ACCC, approved the deal despite the unprecedented concentration, News controls 70 per cent of the metropolitan daily news market through masthead titles The Australian, the Daily Telegraph, the Herald Sun, the Courier-Mail, The Advertiser, The ‘Mercury and the Northern Teritory News, alongside addition regional papers including The Caims Post, the Gold Coast Bulletin, the Townsville Bulletin and the Geelong Advertise) News also publishes a stable of free suburban weekly community publications (NewsLocal, Quest, Leader, Messenger, Community Newspapers) and free daily metropolitan commuter newspapers (mX), Radio ‘Southern Cross Media Group (formerly Macquarie Media Group), a subsidiary of Macquarie Bank, the investment bank that specialises in Infrastructure projects, owns Australia’s larg- ‘est radio network. It tooka strategic 14.9 percent $170 million positioning stake in Southern Gross Broadcasting (a networked radio and TV operation). ‘Shortly after the Fairfax/Rural Press merger, a three-way deal involving Fairfax Media, Mac- quarie Media and Southern Cross Broadcasting was launched. This merger was the first ‘major cross-media transaction under the new rules, The Faitfax/Macquarie Media Group/ ‘Southern Cross deal was a complex deal requiring approval from both ACMA and the ACCC. Under the deal, Macquarie Media Group will then on-sell metropolitan radio stations to Fairfax Media Southern Cross Austereo was formed following the July 2011 merger of Southern Cross Media Group and Austereo Group. Its assets include 68 commercial radio stations across (mostly) regional Australia, including the Today FM network and the Triple Minetwork. Sources: Dwyer (2008); Harding (2010), The October 2012 buyout of Consolidated Media by News Corp offers an illustration of the ACCC, the competition regulator, in action. Prior to the buyout, Holdings owned just over 25 per cent of Consolidated Media, and sought clearance from the regulatot on the basis that it was actively considering a takeover bid for Consolidated. The bid was rejected because it would lead to the Seven Group owning substantial interests in both a major free-to-air network and the largest subscription Seven Grouppouicy ano recutation | 89 television company in Australia, The ACCC also had concerns about Seven Group holding a 50 per cent stake in Fox Sports, which may have given ican unfair advantage over other commercial networks in bidding for sports broadcast rights, Following the decision, Seven voted in favour of News Corp's takeover of Consolidated. This deal increased News Corp's share in Foxtel to SO per cent, and gave it full ownership of sports channel Fox Sports. Telstra continues to hold the other $0 per cent of Foxtel THE POLICY CHALLENGE OF CONVERGENCE ‘As suggested in the Introduction, convergence has also been a hardy perennial in the media policy garden. In 2011, an independent inquiry into convergence was commis- sioned in recognition that increased access to high-speed broadband networks, che digitisation of media products and services, convergent media platforms and services, the rise of user-created content (UCC) and the globalisation of media platforms, content and services have significantly altered the media landscape over the past few decades. In terms of policy and regulation, the key issue atising from convergence is the ‘manner in which it breaks the link between media content and delivery platforms. Convergence points cowards a shift from vertically integrated industry ‘silos’ (print, broadcast, telephony, etc.) and the associated need for sector-specific regulation to a series of horizontal layers of infrastructure, access devices, applications/content services and content itself, In an overview of Australian broadcasting and telecommunications regulations undertaken for the Convergence Review, ACMA (2011) identified 55 ‘broken concepts’ in current legislation, including the concept of influence’ in broadcasting, the concept ofa ‘program’ in broadcasting and the distinction between a ‘content service provider and a ‘carriage service provider’ in relation to the internet. The Convergence Review concluded thar not only were policies on new media required, but a new approach to media policy With a broadly deregulatory thrust, the Convergence Review identified three enduring areas that justified ongoing regulation of media and communications: media ownership; media content standards across all platforms; and the production and distribution of Australian and local content (Convergence Review 2012: vii). In determining ‘who’ or ‘what’ should be regulated in a converged media environment, the review proposed a regulatory framework based on size and scope, departing from the tradition of regulating around particular delivery platforms. Significane ‘overall was also needed. media enterprises—defined as ‘content service enterprises’ (CSE)—that had control over ‘professional content’ (television- and radio-like services, newspaper content,80) | THE MEDIA AND COMMUNICATIONS IN AUSTRALIA etc) would be subject co regulation once they had reached a certain threshold. This approach would replace the curtent system of Australian content quotas that commercial broadcasting has to meet. As of 2013, the current Labor government has only succeeded in implementing a tiny fraction of the Convergence Review's recommendations, and it remains to be seen whether another government will be able to deal effectively with the now well-identified challenges of convergence. One thing is sure, though: the industry, technological and social changes that give rise to the expectation of policy response will continue to increase. CONCLUSION ‘This chapter has shown that the policy approach is an integral element of media and communications studies. It connects your academic studies directly to matters of public interest and social concerns about the media—whether ‘progressive’ oF ‘conservative’—and gives you a window into many practical applications of media and communications studies. Bur, by its very nature, the field is constantly changing— what might have worked only some years ago in regulation or policy may not work now or in the near fucure. So getting to grips with media and communications policy requires you to stay alert to the changing landscape while being prepared to consult policy papers, and even regulatory and legislative documentation. Buc all this welter of information won't mean much if you haven’t really tried ro understand where policy sits within the debates about power, change, representation and identi lenge y form views about how media and communications in Australia can be changed for the better, and how you might contribute to making those changes. that undergird our discipline. Perhaps most interestingly, though, it may 11 t0. ACKNOWLEDGEMENTS ‘Thanks to Adam Swift and Christina Spurgeon for helpful suggestions. FURTHER READING An alternative perspective on approaches in Australian policy studies is found in Pearce (2000), ‘Perspectives of Australian broadcasting policy’. Errington and Mira- sliotta (2012), Media e& Politics: An Introduction outlines the effect that Australia’s liberal democratic tradition has on the operation and structure of the media, and in turn the effect of the media on politics. Freedman (2008), The Politics of Media PolicyPOLICY AND REGULATION | 81 is an approach to US and UK media policy that structures its argument around the historical shift from ‘pluralism’ to ‘neo-liberalism’; it provides a useful background reference. Lunt and Livingstone (2012), Media Regulation: Governance and the Interests of Citizens and Consumers examines how global media regulation affects the relations between government, the media and communications marker, civil society, citizens and consumers. Extended policy approaches to Australian media and communications include Barr (2000), newmedia.com.au, Given (2003), Turning Off the Television: Broadcasting’s Uncertain Future and Kenyon (2007), TV Futures: Digital Television Policy in Australia The challenge of the policy approach for cultural and media theory is covered in Cunningham (1992), Framing Culture. Sandra Braman’s extensive work on public interest communications policy advocacy in the United States in Communication Researchers and Policy-making (2003) and Change of State (2006) provides an excellent comparison with Australia. The websites of the policy players are always worth checking for up-to-date information and valuable perspectives, as is the leading journal Media International Australia (),