Australian Press Council submission to the Department of Communications, Information Technology and the Arts in response to its discussion paper, Meeting the Digital Challenge, on media reform options

19 April 2006

Executive Summary

The Australian Press Council is of the view that the limitations on cross-media ownership in the Broadcasting Services Act should be removed. However, the Press Council has a number of concerns about the specific proposals put forward in the government's discussion paper, Meeting the Digital Challenge.

The Press Council is of the view that the regulation of ownership of Australia's media should be by the Australian Competition and Consumer Commission under the Trade Practices Act, subject to a media-specific public interest test. That test should place a high value on the need for media diversity and the significance of local content.

Overview

The Australian Press Council is grateful for being given the opportunity to comment on Commonwealth government proposals for the reform of the Australian media, specifically addressing the proposals to reform the existing regulations of media ownership.

The Council agrees that reform of the foreign ownership and cross-media ownership regulations is necessary but foresees considerable and continuing problems if the proposals in the discussion paper on media reform options are adopted.

It agrees that foreign takeovers and acquisitions in the media should be subject to Government's Foreign Investment Policy (FIP) under the Foreign Acquisitions and Takeovers Act (FATA) as are all other such acquisitions. However, it would like to see a media-specific proviso: that those administering the Act have regard for Australian content in the media as an issue of key importance in any such takeover or acquisition.

On the question of cross-media rules, it submits that the Government's proposals are ill considered. It believes that the regulation of the media as a whole, including the print media, has no place in legislation enacted to deal solely with the electronic media. The inclusion in the Broadcasting Services Act of regulations that restrict ownership in the print media and that give powers to the Australian Media and Communications Authority (ACMA) to have some supervision of print media newsrooms is inimical to the traditional freedom of the Australian press to be free of government supervision and control.

In the Council's view, the proper ownership regulator should be the Australian Competition and Consumer Commission (ACCC) under the Trade Practices Act, supplemented if necessary by a media-specific public interest test, developed in consultation with relevant stakeholders, and by changes that ensure the news media is regarded as a single market for the purposes of mergers and acquisitions. It is the Council's view that judgments on substantial lessening of competition should be made on the basis of impact, circulation and penetration, considering the news media as a single market. If the ACCC were not required to do this, the application of its competition test will not restrict cross media acquisitions.

Public right to information through a free press

The Press Council's interest stems from its Objects:

The objects of the Australian Press Council are to promote freedom of speech through responsible and independent print media, and adherence to high journalistic and editorial standards, by:
...

3. Keeping under review, and where appropriate, challenging political, legislative, commercial or other developments which may adversely affect the dissemination of information of public interest, and may consequently threaten the public's right to know;

The Australian press has long been characterised by freedom from government regulation and by the provision of full, fair and diverse information to the public about matters of public interest and concern. As in comparable democracies, there are multiple points of view and interest groups to be kept informed. No single newspaper or news agency can report all perspectives or tell the whole story.

For the effective functioning of Australian democracy, there must be sufficient and sufficiently diverse sources of news and comment to ensure that members of the public are always promptly and well enough informed to make their own judgments about governance, regulation, sport, entertainment or other matters. No law or amendment to a law should restrict these fundamental citizenship rights.

Access by all Australians to full, truthful, unbiased information about world and domestic events, and to a pluralist range of opinions and commentary about those matters from an Australian perspective, is the key issue to be considered in determining government policy on media ownership.

Freedom of the press simply means its capacity (and its duty) to inform the public on matters of public interest and concern. The Press Council preserves established press freedoms by ensuring that the print media remain capable of serving the public free of any form of government regulation or licensing.

The Press Council helps maintain high journalistic standards by, among other things, resolving, mediating and adjudicating complaints made by readers about material published in newspapers and magazines.

It is against the background of its responsibilities that the Press Council raises the following concerns with aspects of the Government's proposals.

1. The Trade Practices Act is the appropriate framework for competition regulation

The Broadcasting Services Act (BSA) is not the appropriate legislation for governance of competition. All other industries are subject to the mergers and acquisitions provisions of the Trade Practices Act (TPA). The Council can see no valid argument to suggest that the media industry requires separate regulation of ownership across the media.

If thought necessary, the Government should amend the TPA to enable the ACCC to take up the role of regulator of competition for the media as it does for other industries.

The Productivity Commission, in its report on Broadcasting, recommended that the cross-media rules, currently in the BSA, be removed and replaced by the implementation of a media-specific public interest test on proposed media mergers and acquisitions to be administered by the ACCC under the TPA. Suitable amendments to the TPA are possible, as noted by the Productivity Commission, and by the implementation of such a test in the UK. This would be by far the simplest and most direct way of implementing any desire by the Government to simplify the current cross-media regulation system while maintaining some oversight of mergers and acquisitions to ensure that they do not lead to a substantial lessening of competition. If required, the Council is happy to assist the ACCC in the development of such a test in the same way that it has helped the Attorney-General's Department develop the media exemption in the Privacy Act and aided Treasury and ASIC to develop appropriate regulations under the Financial Services Reform legislation.

Rather than adopt the simple approach of removing regulation of cross-media ownership from the BSA, however, the proposals seek to make amendments to the Act that do not remove the cross-media ownership restrictions but impose a bureaucratic regime to be administered by the electronic media regulator. The Press Council believes that the ACCC is capable of developing a workable test to apply to media mergers and acquisitions.

2. Government regulation of the press is incompatible with a free society

The inclusion of proposals giving ACMA supervision over the limits on numbers of commercial media groups in a given market and, presumably, over the 'public disclosure' provisions of the proposed regime, as well as 'enhanced' 'enforcement powers' in areas that would involve the print media, as well as the electronic, is to introduce the first insidious steps of government control over the press in its journalism role. As any government authority over print media editorial processes must be resisted, it is unacceptable for the ACMA (or any other arm of government) to have such power.

Giving a government-appointed authority the proposed power over the press, even though limited, will nevertheless be an historic departure, the first ominous step toward government press control in this country. It will be an historic breach of democratic rights. Once print media independence from government is compromised, however innocently that first step is portrayed, there will exist the strong possibility of additional amendments, further limiting and managing the press.

The Press Council objects in principle to the imposition of a government-appointed and controlled authority over any aspect of print media editorial processes (through the 'public disclosure' provisions, as well as other likely aspects of the complex and ambiguous cross-media regime). The Council's objection is not based on the current composition of the ACMA or any evident partisanship within that body, but on the principle of independence of the print media from government regulation and control.

3. Foreign ownership

In contrast to the bureaucratic, and somewhat ambiguous, regime to be established for cross-media transactions within Australia, the proposals for change in the regulation of foreign ownership in the media are straightforward and supported by the Press Council, with one proviso. The Government's proposal in this area is to remove the foreign ownership restrictions from the BSA and leave the determination of all such transactions to the FATA, subject to a media-specific test under the "sensitive sector" provisions.

The Press Council, as noted above, believes that an analogous regime could be implemented for mergers and acquisitions within the Australian print media, subject to the provisions of the TPA.

The Council would prefer to see a further media-specific test for those administering the FATA: it would like them to have regard for Australian content in the media as an issue of key importance in any such takeover or acquisition. The retention of a local voice in the reporting of national and international affairs is essential to the maintenance of a functioning liberal democracy. This helps ensure that members of the public are always promptly and well enough informed to make their own judgments on questions such as governance.

Conclusion

The Press Council's position is that the proper ownership regulator is the ACCC using existing legislation, supplemented by a media-specific public interest test and by changes that ensure that the media is regarded as a single market for the purposes of mergers and acquisitions. Similarly it believes that the proper regulator of foreign takeover proposals is the Foreign Investment Policy under the FATA, with similar media-specific provisos to those suggested for other media mergers and acquisitions.

The Australian Press Council does not oppose in principle changes to cross media ownership laws, but believes that the proposals in the discussion paper are not the right ones. Instead of repealing cross-media restrictions, they add another level of bureaucracy and introduce government regulation into the editorial processes of the print media, a development that is to be deplored.

Recommendations

With these issues in mind the Australian Press Council makes a number of recommendations for the regulation of media ownership in Australia.

1. The limitations on cross-media ownership in the Broadcasting Services Act should be removed.
    
2. The regulation of ownership of Australia's media should be by the Australian Competition and Consumer Commission under the Trade Practices Act, subject to a media-specific public interest test. The Council is of the view that the Australian Communications and Media Authority should not be involved in making decisions upon the ownership and control, or the editorial policies, of print media organisations.
    
3. Foreign ownership of Australian media organizations should be permitted, subject to the Foreign Acquisitions and Takeovers Act, and the proviso that Australian content in the media is a key issue in such acquisitions.
    
4. Any public interest test must give consideration to the need for diversity and plurality in any media market.
    
5. A significant criterion for any public interest test should be the importance of local content.
    
6. The news media should be regarded as a single market for the purposes of mergers and acquisitions.

see also
Council's position on cross-media ownership generally

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Freedom of the Press overview

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