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Public missing out, again

By John Quiggin - posted Monday, 20 March 2006

If we needed further evidence of the undesirability of a government having control of the Senate, the media policy announced by Communications Minister Helen Coonan is a perfect example. Although it takes the form of a discussion paper, there is little doubt that the main proposals will pass into law.

The policy is a cosy deal between the government and the media monopolies that have been created through the grant of television and radio licences, and through the half-public, half-private chimera that is Telstra.

The interests of the Australian public in diversity, choice and competition have been disregarded.


Such a deal could never have been pushed through an opposition-controlled senate. This is not because Labor is more devoted to consumer interests than the coalition. Rather, it is always in the interests of opposition parties to block a deal that is bound to secure favourable media treatment for the government.

Looking at the proposal in detail reveals that the big win for the industry is the removal of restrictions on cross-media ownership and on foreign ownership. Not surprisingly, there is an industry consensus in favour of these changes, which can only increase the value of existing media assets.

Another big win for the monopolists is the removal of the threat of a fourth free-to-air television network. Under the existing rules, the Australian Communications and Media Authority could have allowed such a network to begin operating in 2007. The government plans to take over this power, but not to exercise it.

Consultations with the incumbents have revealed, unsurprisingly, that there is no need for any more competition in the free-to-air market.

The authoritarian plan to force consumers to abandon analog TV and video equipment, or pay for expensive converters, remains. It has long been evident that the planned date of 2008 could not possibly be met without inciting a mass revolt. But rather than reconsider the issue, Coonan has just deferred the problem until 2010 and promised a digital action plan to enforce the change.

Such compulsion would not be needed if digital providers were allowed to offer services consumers actually wanted, instead of a bigger, brighter version of the status quo. The deferral of the analog phase-out has been accompanied by an extension of prohibitions on multichannelling, requirements for high-definition TV broadcasting and so on.


It is dismaying to think about all the options that are being foreclosed here. We could have dozens of channels, limited only by the availability of content to fill them (a limitation that is becoming steadily less severe as the digital revolution reduces the costs of creating video).

There are all sorts of possibilities for niche services, most of which will never see the light of day. Instead, we are being offered the same half-a-dozen options we've had for a decade or so: three commercial, free-to-air networks, two public broadcasters and Foxtel, with some grudging extensions for datacasting.

There is still time to change all this. Rather than continuing on the command-and-control path for another five to ten years, the government could announce that spectrum will progressively be freed from control and allocated to whatever use the market finds most valuable. The practice of giving it away to favoured monopolists should be replaced by an auction similar to that used for other parts to the telecommunications spectrum.

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First published in the Australian Financial Review on March 16, 2006.

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About the Author

Professor John Quiggin is an Australian Research Council Professorial Fellow based at the University of Queensland and the Australian National University.

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