Terms of Reference, the Convergence Review

Submission to the Department of Broadband, Communications and the Digital Economy

Prepared by Lynn Gailey
January 28, 2011

The Music Council comments on the draft terms of reference. The Council gives broad support but notes that four other reviews with bearing on the Convergence Review are underway, as well as number of international trade negotiations. It notes also the relevance of Australian content regulations, a matter of special interest to the Australian music industry. The government has signed to the UNESCO Convention for the Protection and Promotion of the Diversity of Cultural Expressions which also implies a number of obligations for Australian culture. The intersections of all of these concerns should be addressed in the Convergence Review.

A pdf of the submission is downloadable at the end of the item.

The submission:

Convergence Review Secretariat
Department of Broadband, Communications and the Digital Economy
GPO Box 2154
Canberra ACT 2601
January 28, 2011

By email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Dear Sirs,

Re: The Convergence Review

The Music Council of Australia appreciates the opportunity to comment on the draft terms of reference for the Convergence Review released by the Department of Broadband, Communications and the Digital Economy (the Department).

The Music Council welcomes the draft terms of reference and supports the direction taken by the Department. The comments made below are made within the framework of broad support and are made with a view to ensuring the Convergence Review Committee (Committee) is able to examine all issues that impact upon the Government’s capacity to support Australia’s creative industries within the parameters of the Government’s cultural policy.

The Music Council is aware that the Convergence Review is being undertaken at a time when other reviews that will have a bearing on the Convergence Review are underway.

In 2010, the Department released the discussion paper Content and Access: The future of program standards and captioning requirements on digital television multi-channels and called for comment from the public. The outcome of the Department’s deliberations has not as yet been released. Also in 2010, the Department conducted The National Review of Government Investment into the Indigenous Broadcasting and Media Sector, a review that included consideration of "the impact of media convergence on the Indigenous broadcasting and media sector; the carriage of Indigenous broadcasting and media on new digital platforms, including terrestrial services, broadband enabled platforms and the new Government-funded satellite service". The outcome of this review has also yet to be released. At the end of 2010, the Australian Communications and Media Authority (ACMA) sought comment on its Discussion Paper Spectrum reallocation in the 700MHz digital dividend band. The House of Representatives Standing Committee on Infrastructure and Communications is conducting an Inquiry into the role and potential of the National Broadband Network. Finally, the Convergence Review is being conducted against a background of trade agreement negotiations, both bilateral and plurilateral, which are likely to raise issues that will affect how the Government is able to give effect to its cultural policy in a rapidly converging media environment. All have relevance to the terms of reference for the Convergence Review. Managing the intersections between these various reviews, inquiries, calls for comment and trade negotiations will be important if optimal results are to be achieved. It is to be hoped that when the final terms of reference for the Convergence Review are released and the timetable for the Review clarified they will afford a way forward that is cognisant of these other reviews, inquiries and negotiations.

Currently, mandated quotas apply to free to air commercial television broadcasters set out in the Australian Content Standard in the Broadcasting Services Act 1992 and monitored by ACMA. The public broadcasters have content obligations specified in the legislation under which they operate and expenditure quotas currently apply to subscription television in respect of predominantly drama channels. In respect of commercial radio broadcasting, quotas are not mandated but contained within a Code of Practice, the application of which has recently been waived for three years for digital only radio channels.

The Music Council notes that in the preamble to the draft terms of reference the Committee shall have regard to the Broadcasting Services Act 1992, the Radiocommunications Act 1992 and the Telecommunications Act 1997 as they relate to the regulation of content. However, the Music Council recommends that the Committee be given the power to consider the full breadth of measures that currently impose obligations or could be used to impose obligations in respect of Australian Content be they contained in legislation, regulation or codes of practice and guidelines. While overall content obligations apply to commercial free-to-air radio and television broadcasters, special recognition is given to areas of market failure – drama, children’s programs, documentaries and television advertising. In a rapidly converging media landscape, consideration must also be given, in the case of radio, to whether current quotas are adequately supporting the diversity of Australian music and, in respect of television, whether additional program types are likely to encounter market failure including, by way of example, news and current affairs, comedy, lifestyle and ‘light entertainment’ programs.

The Music Council notes Clause 5(a) which requires the Committee to take into account ‘the development and maintenance of a diverse, efficient and effective communications and media market that operates within an appropriately competitive environment and in the best interest of the Australian public’. That Australians expect to be able to access free-to-air broadcasting services – free at the point of consumption – may well be implicit in the terms of reference but consideration could be given to making that expectation explicit. Obviously, such services come at a cost but that cost is an indirect one – programming funded by government subsidy in the case of the national public broadcasters and from advertising in the case of commercial broadcasters. However, at the time of consumption it is received free to all those with a receiver and electricity. Subscription television has been available to Australians since the mid 1990s. Nonetheless, with a take-up rate of 34 per cent, it is clear that the majority of Australians continue to expect access to broadcasting that is free at the point of consumption and this expectation that access to reasonable levels of Australian content is likely to continue unabated. It will likely matter little to audiences whether they listen to music programs on their radio, view the nightly news, Dancing with the Stars and Underbelly on their television set, as is broadly the case at present, or access programs of their choice on their computer or other distribution platform. This expectation will, of course, pose considerable policy challenges but the Music Council considers it to be a matter of crucial concern to the Australian public.

The Music Council notes Clause 5(b) which requires the Committee to take into account "the appropriate regulatory and legislative settings to ensure the ongoing production and distribution of Australian media content that reflects and contributes to the development of national and cultural identity". To that end, the Music Council suggests that the terms of reference enable the Committee to look at the funding landscape in which the broadcast sector exists. As alluded to above, certain program types are already subject to market failure. While the production of all Australian television content is underpinned by the Australian Content Standard that requires 55 per cent of all programming on commercial free-to-air television between 6am and midnight to be Australian, some program types are subject to such market failure that subquotas are required – for drama and documentaries. However, sub-quotas alone are insufficient and these program types are also supported by subsidy. To that end, consideration need necessarily be given to how programs considered important "to the development of national and cultural identity" are financed. The Music Council considers that the Committee should have the capacity to look at the raft of existing support mechanisms that contribute to the current content creation industry, including that provided federally by way of direct and indirect subsidy as well as at state and territory level, as well as being free to consider other measures that could be introduced to underpin what will be a growing demand for content over coming years. It will be important for the Committee to consider the interdependencies that exist across the cultural sector. By way of example, composers and musicians typically derive income from more than one part of the cultural sector, be it from live performances, recordings leading to the production of CDs, composing and recording music for television commercials or television series and so on.

As indicated above, the Music Council recommends the terms of reference allow the Committee to consider the impact of Australia’s international agreements on the future of its audiovisual industry.

Excluding the audiovisual and cultural industries from trade agreements has had bipartisan support from the time the General Agreement on Trade and Tariffs (GATT) was negotiated. This remained the case as evidenced by the Australia’s Intervention at the CTS Special Session in the General Agreement on Trade and Services (GATS) in Geneva in July 2001:

Australia has long recognised the essential role of creative artists and cultural organisations in reflecting the intrinsic values and characteristics of our society, and is committed to sustaining our cultural policy objectives within the context of multilateral trade agreements.

While Australia inadvertently offended this principle in negotiations for the Closer Economic Relations (CER) agreement with New Zealand, it was only with the Australia United States Free Trade Agreement (AUSFTA) that Australia negotiated a position compromising this principle. However, that principle thus far has been respected in subsequent bilateral, regional, plurilateral and multilateral trade agreements, be they concluded, under negotiation or on-going with Australia making no concessions in this regard in positive list agreements and negotiating comprehensive exclusions in negative list agreements.

This position is consistent with the provisions of the UNESCO Convention for the Protection and Promotion of the Diversity of Cultural Expressions to which Australia is now a signatory. One of the key objectives of the Convention is articulated in Article 1(h):

to reaffirm the sovereign rights of States to maintain, adopt, and implement policies and measures that they deem appropriate for the protection and promotion of their diversity of cultural expressions on their territory.

In other words, cultural policy is domestic policy and the right to maintain decision-making capacity in this regard is crucial to the fostering of a healthy content sector. Failing to take account of international agreements has in the cases of the CER and the AUSFTA, had unfortunate consequences. In the case of the former, Australia must now consider New Zealand programs Australian for the purposes of the Australian Content Standard and, in the case of the latter, Australia has forfeited its capacity to appropriately control domestic cultural policy by compromising its ability to support its cultural industries as technologies develop and new delivery platforms emerge, granting the United States the rights of consultation and with regard to content quotas on existing broadcasting services agreeing to quota caps.

For these reasons, the Music Council urges consideration of Australia’s current and potential obligations in international agreements and covenants be incorporated within the terms of reference.

Finally, the Music Council welcomes this long overdue review and looks forward to participating further.

Yours faithfully,

Dr Richard Letts AM
Executive Director

The original submission