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National Affairs

Convergence: only one part of the media problem

7 April 2011

What does the government really want from its review of media policy, asks Julian Thomas


Federal communications minister Stephen Conroy. Kim Davies/Flickr

Federal communications minister Stephen Conroy. Kim Davies/Flickr

AUSTRALIA’s media is changing. The old order of television, print and radio remains important and familiar, but what is exciting is the emergence of a new world of social and mobile media. So the government’s decision to hold a public review of media policy in 2011 is a timely and welcome opportunity for a wide debate. After years of piecemeal change, there are issues with the old order that clearly need attention: ownership and audience reach rules; content regulation in its various manifestations; and spectrum allocation, to take a few examples. Previous governments have struggled with these issues, and disruptive new technologies may now upset longstanding policies. There are also interesting new problems, such as piracy and privacy, and new platforms, including high-speed broadband and mobile.

The review will consider media policy through the lens of “convergence” – the idea that fast-moving digital technologies are making the old distinctions between broadcasting and telecommunications less important and policy-making more complex. The convergence idea is not new – in Australian media history terms, it is scarcely more novel than FM radio in Australia, having floated around media policy and industry circles for at least two decades. But it reminds us that the kinds of content we are used to finding on television and radio are no longer services provided only by broadcasters. If audiovisual news and entertainment are readily accessible from all kinds of sources through the internet, what is the point of sticking with our complicated media rules, where policy outcomes depend on a regulatory connection between a particular mode of communication (for example, transmissions using certain parts of the spectrum) and a certain kind of material (for example, children’s TV)? A connection that began as an engineering contingency seems to have evolved into a regulatory convenience (or, now, a lack of convenience).

Convergence is a useful idea if it is taken to mean that the territory is unstable. What was once the delimited and relatively manageable zone of media policy is now a more diverse, less easily defined field of public information networks. But focusing on convergence is risky. In the first place, the review’s terms of reference seem rather narrower than a wide-ranging inquiry would need. Then there is the problem that convergence is useful for thinking about some media issues but less so for others. It’s not good at grasping radical, disruptive change, and at the other end of the spectrum it can obscure more deep-seated, persistent problems.

The convergence theme does, however, help us with a certain kind of problem – we can call them alignment problems. Alignment problems occur where new technologies, new services and new business models mean that the scope of policy no longer corresponds with its object. These are the sands slowly shifting around the established industries. Media ownership rules are an obvious example of an alignment problem, and it is good to see that they are an area flagged for attention in this review. The existing laws in this case are intended to help secure diversity, but they apply only to free-to-air broadcasting, simply because those media seemed to be the most important when the current legislation was drawn up in the early 1990s. Pay TV, mobile and online media have emerged since then, and fall outside the restrictions.

In the absence of reform, it is not surprising that some of the newer forms of media have been captured in large part by existing media and communications businesses, with firms like News, Telstra, the Seven Network, and Consolidated Media in prominent roles in pay TV. The internet, meanwhile, has long been the great hope for diversity and plurality, but it is a mixed story: among the more popular Australian media-related websites, Google, Twitter and Facebook are all giants based in the United States, BigPond is a Telstra business, is owned by News Ltd, and ninemsn is a joint venture between Nine Entertainment and Microsoft. Most mainstream Australian media sites lag behind the big user-generated content websites – YouTube, Wikipedia, and the blogging domains Blogger and Wordpress – which span social media. All of the user-generated sites, plainly, carry large amounts of local content; how much, we don’t know. The past few years have been a tale of the extraordinary rise of this kind of media, both in raw numbers and in relation to the old mainstream. Even so, there is clearly a strong case for a broader framework for regulating ownership across these old and new sectors, and what is required is some kind of public-interest test, or system of ownership or control thresholds, in addition to the competition law that already applies.

The review’s background paper acknowledges the need to bring the ownership laws up to date. We do need reform here, but these deficiencies in law and policy are not in any sense new. The regulatory lacuna of pay TV has been obvious to everyone since at least 1995, when Foxtel, the now dominant pay TV provider, commenced broadcasting. In fact, Foxtel’s ownership structure goes back eighteen years, to the 1993 formation of the PMT consortium by News, PBL and Telstra. In the case of the internet, Telstra established BigPond in 1996; what was then PBL established ecorp and then ninemsn in 1997. The need for reform of the law in this area has been obvious for well over a decade – these are old problems, and it is probably better to acknowledge that than to suggest that they are new.

Genuinely new questions arise over broadband. The National Broadband Network, or high-speed broadband more generically, is clearly the next major new element that will shape the future Australian communications system. It could be a problem that the review appears to be precluded from dealing directly with most telecommunications matters, especially those relating to the NBN and the future universal telecommunications service.

Clearly bringing the NBN into this process would complicate matters enormously. But many people think the NBN will become very important for the delivery of television, although broadband policy-making has concentrated on the business, health and education services it will offer. It will certainly carry many television-like services, from video-on-demand (along the lines of current sites like, to TV catch-up services, including international ones such as the BBC’s subscription-based version of its popular iPlayer. The NBN also has great potential to deliver “regular” TV. It will reach many areas that will never have cable television and, in many urban and rural neighborhoods, it may well offer people a better TV service than they will ever have with digital or analogue over-the-air signals – but presumably not a “free” one.

Convergence is not so helpful when it comes to those less predictable policy problems that are created by disruptive, far-reaching change. The dislocation of carriage and content, for instance, seems centrifugal, a proliferation of services leading to fragmented audiences and advertising; the review notes the proliferation of catch-up TV websites, like ninemsn’s Fixplay, for example. These do raise questions about some aspects of broadcasting policy. But services such as these are by no means as disruptive to the TV industry as streaming video sites like YouTube, possibly the most successful media site globally. YouTube emerged as a primarily user-generated service, from what we call the informal media economy, which receives little attention from government policy-makers. The sector is unregulated, untaxed, and unlicensed, and without doubt this is one reason why it is also an extraordinarily dynamic, market-driven, internationally oriented sector.

The problem with concentrating on the alignment problems is that the review can easily turn into an exercise in incrementally redistributing regulatory burdens or privileges from one industry sector to another. The public submissions posted so far promote predictable arguments along those very lines. It would be more productive to consider instead where innovation is really occurring in Australian media, whether it is in internet television, social media or mobile services. It’s not that these areas necessarily require support or intervention, but at the least we don’t want them to be adversely affected by any new rules. If there is to be a revised regulatory model, the most important thing is not to harm the minnows. Sweeping filtering or anti-piracy rules could easily have that effect.

Finally, the review also needs to engage with those issues that are neither alignment problems nor disruption problems. These are the systemic problems that predate all these changes, but persist despite them, because industries like television broadcasting are very good at adapting to new circumstances. An example of a persistent problem is competition. The review’s terms of reference say that Australian media should operate within an “appropriately competitive market.” This is plainly not a review driven by competition policy, but what are appropriate levels of competition, how would we know, and who should be in a position to decide? The review team is also asked to consider “the impact of policy settings on industry and government revenue.” This approach reflects a longstanding policy bias, but one that should be very contentious. Which industries are we supposed to be worrying about here? A more rigorous approach would be to at least balance public revenue questions against the long-term interests of media consumers. And to articulate the government’s objectives more clearly in the first place. •

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