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Opening up communications

By Julian Thomas and Peter van Vliet - posted Wednesday, 23 February 2005

With Senate Control from July 1, Prime Minister John Howard and Communications Minister Helen Coonan have an unprecedented opportunity to reshape our entire communications sector. As the Government embarks on these reforms, it remains to be seen whether consumer or producer interests will ultimately prevail. Will the Government’s reforms simply drive further industry consolidation or will they adopt a reform agenda that delivers greater competition and diversity?

The two key planks of the Government’s long frustrated reforms are relaxing our cross and foreign media ownership laws and securing the full sale of Telstra. As the Government prepares to implement these reforms it must explain how its changes will benefit the public interest rather than just industry. A better deal for the long-suffering Australian consumer must be at the centre of the new equation.

The prospect of change in the media sector is already producing a flurry of speculation over possible takeovers and acquisitions. However, simply easing ownership restrictions without other reforms will only benefit incumbent proprietors. It will further concentrate Australia’s already heavily concentrated media sector, to the detriment of both consumers and our democracy.


If the Government is serious about media reform, it should offset any further concentration in media ownership by allowing new players in. This can be done by granting a new and separately owned fourth commercial television licence. The Government should also unlock the potential of digital television by allowing unrestricted multichannelling. Reforms along these lines would deliver more choice and better services for television consumers.

Not surprisingly, the television networks claim Australians already have enough free-to-air television, and increased competition would undermine their viability and quality. But advertising revenues and profits in our commercial television sector continue to grow, while the quality of some of our current local content is already questionable.

In fact Australians have fewer television choices than those found in many parts of the developed world. The four million-plus residents of Sydney have just three commercial television services, plus the ABC, SBS and a small community channel. In a comparable US city such as Houston, Texas, there are seven commercial stations as well as six low power stations, and two educational stations. That’s fifteen free to air channels compared with six in two similarly sized cities.

The UK offers a third model: a digital free to air service called Freeview, offering 26 different channels, 2 interactive channels, and 20 audio channels. Freeview has driven BSkyB, Britain’s biggest pay TV provider, to offer a subscription-free package of 200 television and radio channels for just £150. The UK is a clear example of how more competition and less restrictive regulations allows for more and better services for the public.

In telecommunications, the same principles are at stake. The government is tantalisingly close to its cherished ambition of selling Telstra. But the government must have the courage to ensure Telstra doesn’t become a huge private monopoly slugging both consumers and businesses with over-priced, sub-standard products. The OECD is now the latest group calling for Telstra to get out of Foxtel. If the sale of Telstra proceeds, the government must at least enforce a strict internal separation to ensure that when it comes to its wholesale business, Telstra treats others as it does itself. It should also have the courage to force Telstra out of Foxtel.

If the Howard Government is serious about market driven reforms in communications it will recognise that markets consist of consumers as well as producers. Consumers are listening and watching with great interest. Let’s hope our voices are heard.

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About the Authors

Julian Thomas is Professor of Media and Communications at Swinburne University.

Peter van Vliet is a senior public servant.

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