Commonwealth of Australia Explanatory Memoranda

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BROADCASTING SERVICES AMENDMENT (MEDIA OWNERSHIP) BILL 2006

                          2004-2005-2006


 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA


                              SENATE




          BROADCASTING SERVICES AMENDMENT
             (MEDIA OWNERSHIP) BILL 2006


     SUPPLEMENTARY EXPLANATORY MEMORANDUM


Amendments and New Clauses to be Moved on Behalf of the Government
                    (Sheet Number QS391)




      (Circulated by authority of Senator the Hon. Helen Coonan,
  Minister for Communications, Information Technology and the Arts)
              GOVERNMENT AMENDMENTS TO THE
             BROADCASTING SERVICES AMENDMENT
                (MEDIA OWNERSHIP) BILL 2006


                                     OUTLINE

The Bill implements the Government's longstanding commitment to reform
Australia's outdated media ownership laws while protecting the public interest in a
diverse and vibrant media sector.

Foreign ownership

The Bill will remove broadcasting-specific restrictions on foreign investment in
Australia's media sector.

Cross-media ownership

The Bill will permit cross-media mergers in radio licence areas where sufficient
diversity of media groups remains following the merger. At least five separate media
groups will be required to remain after any merger activity in mainland State capitals,
and four groups in licence areas elsewhere, including regional areas. Any media
merger, including one that is not a cross-media merger, will not be permitted if it
would reduce the number of media groups in a licence area below the minimum level.

To ensure compliance with the minimum number of separate media groups rule, the
Australian Communications and Media Authority (the ACMA) will maintain a
Register of Controlled Media Groups identifying the ownership and control of media
groups in each licence area. A person who undertakes a transaction that breaches the
BSA will be guilty of an offence, and may be ordered by the ACMA to divest licences
or newspapers to return to compliance with the Act.

Public disclosure of cross-held entities

The Bill will establish a requirement for public disclosure when a media outlet reports
on the activities of a cross-held entity.

Regional protections

The Bill requires that all mergers involving commercial radio, commercial television
and Associated Newspapers within a regional radio licence area will be required to
obtain a clearance from the ACCC prior to transacting.

The ACMA will be required to impose licence conditions on commercial television
licensees in regional Queensland, NSW, Victoria and Tasmania from 1 January 2008
to provide minimum levels of content on matters of local significance. Licence
conditions were put in place by the ABA in 2003 in those markets following an
investigation undertaken in response to the closure of local news services. A
                                           2

requirement for licence conditions will also be extended to Tasmanian licensees.

The Bill establishes local content licence conditions and Local Content Plans for
regional radio licensees. These are intended to provide protection for local content on
radio in regional areas. They will apply where control over a commercial radio
licence is transferred or becomes part of a merged media group. These requirements
may also be imposed if the format of a commercial radio service is narrowed or the
Minister directs the ACMA to consider imposing them. These conditions will
establish minimum standards for local news and weather bulletins, local community
service announcements, emergency warnings and minimum service standards for
other types of local content, if specified by the Minister by legislative instrument.
Licensees subject to these conditions will be required to maintain existing higher
services, and maintain existing levels of local presence.

Licensees will be required to demonstrate in a Local Content Plan (LCP) how they
will meet the local content licence conditions and what resources they will have in
place to meet the requirements.

Government Amendments

An unintended consequence of the definition of regional licence areas in the Bill was
the inclusion of the Western Suburbs Sydney RA1 licence area in the category of
regional licence areas. This licence area incorporates much of the Sydney
metropolitan area and serves the Sydney community, and its inclusion as a regional
licence area is inconsistent with the policy intention of the Bill.

The amendment will define the Western Suburbs Sydney RA1 licence area as a
metropolitan licence area for the purposes of the Bill. That area will therefore be a
metropolitan area for the purposes of the cross-media amendments made by the Bill,
and will not be covered by the regional protection measures in the Bill. This ensures
that licensees in a licence area that predominantly serves metropolitan Sydney and
which is identified entirely with the western Sydney community are not, for the
purposes of the protection of media diversity and local content, regulated as regional
licensees.


                             FINANCIAL IMPACT

The amendments are not expected to have any significant impact on Commonwealth
expenditure or revenue.
                                           3


            NOTES ON AMENDMENTS ON SHEET QS391

Amendment (1)

Amendment (1) replaces the definition of "metropolitan licence area" in new section
61AA of the Broadcasting Services Act 1992 (the BSA).

The new definition includes the Western Suburbs Sydney RA1 licence area. That
area does not contain the Sydney GPO, so would not otherwise be a metropolitan
licence area for the purposes of new Division 5A of Part 5 of the BSA (inserted by
item 8 of Schedule 1 to the Bill). Division 5A replaces the BSA cross-media rules
with a prohibition on mergers and acquisitions that reduce the number of
independently controlled media operations below 5 (in metropolitan licence areas) or
4 (in all other licence areas - defined as regional licence areas).

The amendment means that the Western Suburbs Sydney RA1 licence area will be a
"metropolitan licence area" for the purposes of Division 5A. This reflects the fact
that the Western Sydney licence predominantly serves the western suburbs of the city
of Sydney, and that the licensee operating in Western Sydney is significantly different
in its programming and intended audience from the regional radio licensees to which
Division 5A is intended to apply.

Amendment (2)

New Division 5C of Part 5 of the BSA, inserted by item 7 of Schedule 2 to the Bill,
introduces minimum local news and information requirements for regional
commercial radio licensees.

Amendment (2) makes the same amendment to the definition of "metropolitan licence
area" in new section 61CA of the BSA as Amendment (1) makes to new section
61AA.

The effect of Amendment (2) is that the Western Suburbs Sydney RA1 licence area
will not be subject to the requirements in Division 5C. This reflects the fact that the
Western Sydney licence predominantly serves the western suburbs of the city of
Sydney, and that the licensee operating in Western Sydney is significantly different in
its programming and intended audience from the regional radio licensees to which
Division 5C is intended to apply.