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Let's get serious - it's still too easy to sidestep radio standards

By Derek Wilding - posted Wednesday, 7 July 2004

The decision by the Director of Public Prosecutions to not prosecute Radio 2UE for breaches of the commercial radio standards by John Laws presents another twist in the evolving "cash for comment" saga.

Five years after the first commercial radio inquiry, the latest investigations have taken broadcasting standards to the centre of political debate in Australia. The investigations into 2UE, 2GB, Telstra and NRMA have seen another "behind the pot plant" scoop for Media Watch, the emergence of John Laws as a star witness on The 7.30 Report, comments from the Prime Minister on his association with Alan Jones, and even the resignation of the Australian Broadcasting Authority chairman, Professor David Flint.

The latest development emphasises the dead end of broadcasting regulation. According to the broadcasting authority, the DPP is of the view that the burden of proof is too high to establish that 2UE acted with the required level of criminal intention.


Once the remedy of a prosecution is knocked out, the ABA is left with few options. Correctly, it has decided that revocation of 2UE's licence would be an extreme and inappropriate remedy. Its other option is to impose a further licence condition. But a breach of a licence condition may simply involve referral to the DPP and a repeat of the regulatory failure presented in the current case.

The irony is that the 2UE case showed that the broadcasting standards do work well in some cases. It also indicated that the ABA is prepared to act where it finds breaches of those standards. The two recent investigations into commercial arrangements found that both Laws and Jones were personally involved in securing these deals. In the case of Laws, the benefits flowed directly to him. This resulted in the arrangements qualifying as a "commercial agreement" within the meaning of the ABA's disclosure standard.

The fact that Laws did not make the required disclosure statements meant that the radio station breached the standards. Accordingly, the ABA referred the matter to the DPP for prosecution.

This result shows that the standards are effective in relation to the limited set of issues they set out to regulate. In this respect, despite claims made against the ABA about delays and disinterest, the authority took an important regulatory step in seeking to enforce its rules.

These good intentions were under question following release of the report into 2GB in April this year. The ABA found that the 2GB agreement was made with the radio station and the money flowed to the station, not to the presenter. This meant that there was no "commercial agreement" in place. Accordingly, Jones was not required to disclose the arrangement when he engaged in editorial discussion of issues involving Telstra.

The ABA did find that there was an "arguable case" that 2GB (not Jones) would need to announce that the station's sponsors include Telstra, but there is no requirement for Jones to make any qualifying statements at the time he is promoting that sponsor.


The 2GB arrangement is a clever one. In the commercial radio inquiry, Jones was found to have breached the commercial radio codes of practice on a number of occasions. His conduct when at 2UE, as well as that of Laws, led to the implementation of the commercial radio standards.

In 2002 his new employers at 2GB sidestepped the regulations while his old employers waded deep into the marsh of broadcasting standards. Now it seems 2UE has made it to the other side, safe from prosecution.

The whole episode demonstrates what the ABA has been saying quietly since the first cash-for-comment inquiry: its powers are too restricted. A regulator responsible for powerful and influential owners of broadcasting services needs effective remedies that target conduct that is widely regarded as against the public interest.

New powers - nominated by the ABA after the commercial radio inquiry but not taken up by the government - would act as real disincentives against further breaches. These include the administrative remedies of short-term advertising bans, obligations to run on-air corrections, and new civil penalties that bypass some of the difficulties presented by criminal prosecutions.

These are powers that parliament needs to invest in the ABA. But the authority also has work to do. The ABA needs to amend its disclosure standard to cover arrangements between radio stations and sponsors, rather than just arrangements between presenters and their sponsors. The ABA stands accused of being a tame regulator, too close to the industry it monitors.

Without these changes, regulation of broadcasting standards may continue to be seen as serving commercial interests rather than the public interest.

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This article was first published in The Sydney Morning Herald on 30 June 2004.

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About the Author

Dr Derek Wilding is director of the Communications Law Centre in NSW, a research centre of UNSW and affiliated with Victoria University.

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