No guts, no vision: the politics of media diversity in Australia

On the industry side, the losers will be the startups and content developers who dreamed of unparalleled opportunities for pioneering developments, and those who saw the possibility of broadening the diversity of media control and delivery in Australia. We were about to become a test bed for the development of datacasting technologies for export into countries like India and China which, like Australia, have poor communications infrastructure in their remote areas. That opportunity will now probably be lost.

The patently artificial constraints on the type of content that can be datacast would emasculate the commercial case for investment in the new medium. Potential competitors to free-to-air broadcasters now have no incentive to invest in either broadband content development for, or delivery via, spectrum. We have already seen all the main prospective datacasters abandon their planned trials. Theirs is a rational response to an irrational policy.

It gets worse. Not only can't you deliver most genres of video content over spectrum, but the government has signalled the possibility of a ban on audio and video streaming over the traditional Internet. You don't have a review by the ABA on whether this might breach the spirit of the new law unless you want to leave open the opportunity of banning it. How the government would ever implement this is hard to fathom, but the damage that could be done by even trying should be enough to worry every ISP in Australia and anyone else with aspirations to deliver broadband content over non-spectral media.

The breadth and intended effect of these policies are indefensible, even on the basis of preserving the government's decision to not issue any further television licenses. The measures are a hugely disproportionate imposition on the emerging media compared to the risk to the incumbents' businesses.

The Federal Opposition is not blameless in this debate, having supported the general thrust of the government's legislation in 1998 which gave the FTAs free use of spectrum for eight years, while everyone else had to pay.

If Labor were serious about reversing the damage of this bad policy, why would they come out with two options in their proposed amendments, a hard option and a soft option? The political strategy is pretty transparent if you think about it. If they were truly committed to reform, they would nail their flag to the competition mast and argue for radical changes to reverse or at least severely limit the damage. Then they would argue like hell for those reforms. But instead we see an each-way bet that says in effect, well if the hard option is too much for parliament to swallow, here is a soft option that tinkers around the edges, looks good but leaves the worst aspects of the regime intact. The heat then moves off the ALP to the Democrats who hold the casting vote in the Senate. If the Democrats back the hard option, they bear the brunt of the wrath of the FTAs. If they back the soft option, Labor says "don't blame us, they were the ones who squibbed".

The Democrats must support Labor's "Option A" amendments if they are serious about salvaging the nascent datacasting industry. We may need to help them along a little here. For Natasha Stott-Despoja, a self-confessed political advocate for the Internet community, and Vicki Bourne, the champion of competition of the airwaves, this is the moment of truth. The Internet industry in Australia calls upon you to do what you know is right, not what is politically expedient. After all, as Democrats, that is your charter.

If this legislation is passed without major surgery, the Internet industry in Australia will be retarded and the skill-base and investment will have yet another reason to move offshore. Content developers will soon be packing their bags for the US, and who can blame them?

Though in truth, the best thing to really do with this legislation is to throw it out entirely. It has become so complex and full of compromises that its workability will be a real issue. Industry players in other leading information economies are not encumbered by the artificial barriers to entry we see here. Whichever way you look at it, the legislation really just represents more impediments to competition, content development, investment and innovation.

We are still very concerned about the government's proposed ABA review of whether Internet-delivered streamed media might constitute broadcasting. The Labor amendments did not rule this review out. The consequences of such a finding would be highly destructive to both investment in content development and investment in broadband infrastructure. Why build the pipes if you need a broadcasting licence to deliver streamed audio and video over it? There is no need to extend the datacasting review to cover Internet content unless you want to extend by stealth the broadcasters' monopoly.

In the online world we talk about old economy companies being "Amazoned" by new startups who can innovate, free of the legacy of offline investments. This principle operates on a national level too. We are not suggesting that there is no value to traditional television services, but the incumbent television broadcasters have had a pretty good run for the past 44 years. The introduction of television in the 50s did not destroy radio - they are complementary and serve different needs. So too will be datacasting and other forms of Internet content delivery.

This legislation tries to artificially limit technological convergence by regulatory means. This is not in the long-term national interest and will ultimately prove futile as everything moves to the Internet.

If this legislation passes largely intact, digital spectrum that belongs to all Australians will have been squandered, its value slashed, its potential hobbled. This will be the biggest sellout in the history of the Net in this country. It need not be this way – but it will take some enlightened and courageous intervention over the next few days to avoid the wreckage that otherwise lies ahead.