$250m TV gift needs to be rechannelled

This week federal Communications Minister Stephen Conroy has been caught in a deluge of criticism from all quarters for his recent $250 million licence rebate to the commercial free-to-air broadcasters.

But while Opposition Leader Tony Abbott, with his accusations of bribes and nefarious dealings, likens the debacle to an episode of television's Underbelly, and the subscription TV industry knows there's Something in the Air and is asking the government to throw a little bit of Love My Way, it is the Australian taxpayers who are left in the dark as usual.

The whole basis on which the Rudd Government has provided this $250 million gift to an industry that continues to earn record profits is that the licence rebate "recognises the importance of the Australian content standard in ensuring TV audiences have strong levels of Australian programs". Essentially, the government argues that in these difficult digital times, the free-to-air networks need a helping hand to produce and screen Australian content.

But, of course, the $250 million is not tied to the free-to-air broadcasters actually doing anything extra to support the creation and delivery of Australian content.

There are no rules, no strings attached. We've been asked to simply take it on trust that this money will go to helping Australian viewers see Australian content.

When pushed on ABC News Radio, Conroy stated that the reason for this was that he was "not in a position to increase local content production".

"The US free trade agreement, which the previous government championed and supported and put into parliament, ensured that we can't increase the FTA local content rules," he said. "So we have to find ways to support Australia content and this is one of the ways."

While the Communications Minister is partly correct here, he does not provide the full picture.

The US free trade agreement did place a cap on the 55 per cent level of Australian content on the free-to-air broadcasters.

In fact, if we were to decrease it to, say, 50 per cent, we would not be able to increase it back to 55 per cent.

However, the minister has forgotten one important section of the US free trade agreement, the section that addresses the free-to-air multi-channels such as the Nine Network's Go! and Seven Network's 7Two.

This is rather surprising given his department, as we speak, is reviewing the application of local content rules to these additional channels.