The Weekend Australian, October 23-24 1999 - lead story
by Michael Gilchrist and Finola Burke
Foreign ownership restrictions on media should be dropped, and cross-media ownership rules made redundant by welcoming foreign companies and new free-to-air TV stations according to a major review delivered to the Federal government yesterday.
In its sweeping review of broadcasting laws, the Productivity Commission also criticised the Federal Government's plans to introduce high definition television as a mistake that would cost consumers and the industry dearly.
"Digital technology has opened up possibilities for new and improved broadcasting services that we could have only dreamed of years ago," inquiry chief Richard Snape said yesterday.
But the Commission said digital TV must be affordable if Australia were to reap the benefits of digital technology.
It said most consumers would not be able to afford HDTV sets, which would cost at least Au$8,000, and the government should instead ensure that broadcasters transmit in a standard definition TV format.
The recommendations were immediately rejected by HDTV supporters but they also sparked a rift between the commercial television networks.
Kerry Stokes' Seven network broke ranks from the Federation of Australian Commercial Television Stations to applaud the report and disassociate itself from the industry stance.
The Federal Government reacted coolly to the draft report, refusing to comment on whether it found any of the recommendations attractive, but rejecting the call to allow new entrants to improve media diversity.
Although the commission's review was triggered by Treasurer Peter Costello, the government is not compelled to act on the recommendations.
Communications Minister Richard Alston has commissioned nine departmental reviews into various aspects of digital broadcasting that are more likely to influence Cabinet's decisions when it meets next month to set the digital regime in place.
Digital broadcasting begins in Australia on January 1, 2001, but HDTV has been criticised as a "gold plated" standard that will use too much of the digital spectrum at the expense of new services and competitors.
The Productivity Commission said the spectrum should be used to benefit the community by encouraging new media entrants and improving media diversity.
But the commission recommended against dropping cross-media rules.
"After the regulations, which prevent entry into broadcasting, are removed; and after the spectrum becomes available; and after a special public interest clause on media has been inserted into the Trade Practices Act; after only these three conditions have been satisfied. The cross-media rules would be removed," Professor Snape said.
But the report said foreign ownership restrictions on media, which prevent foreign owners from owning more than 25% of a newspaper and 15% of a television station, should be dropped immediately.
The commission said the rules were "obsolete" and that the concerns that local culture should be protected would be addressed by new rules on local content.