Ruling across the Media

Abstract: This article discusses media policy, in the light of the current government review of cross-media rules. It argues that the cross-media rules have in fact already been abolished, but warns that this should not lead to an acceptance of the current monopolies in markets such as local newspapers. The article has been used as a policy submission, with the main trust contained in its last paragraph.

A. Monopolies in the Media.

Every dictator instinctively knows that absolute power comes not just from the barrel of a gun, but from control over communications. Whenever a coup d'etat is contemplated, the first targets are communication facilities such as broadcasting stations, newspapers and telephone exchanges. To control transport facilities such as roads, bridges, airports, railway stations and harbors seems of lesser importance. The occupation of parliament buildings is mere symbolic by comparison.

B. Australia's Law has not prevented Media Monopolies.

One way of measuring how much a country is under dictatorship is to look at the amount of governmental prescriptions and restrictions imposed on the media. In the case of Australia, only a very limited number of TV-stations is allowed to operate, a large part of which is owned and operated by the Government; this despite the fact that Australia, with its low-density population and no over-spill from neighboring countries, has relatively few radio spectrum congestion problems. Owners of the so-called commercial stations are virtually hand-picked by the Government through procedures such as limits on foreign ownership and cross-media ownership restrictions. The officially acclaimed goals of such rules are the preservation of diversity and competition in the media, but anyone who is a bit familiar with the situation knows that there are only three players of importance in Australia: Kerry Packer, Rupert Murdoch and the Government itself; together, they dominate telecommunications, print and broadcasting, associated areas such as sport and gambling, and more recently pay-TV and cable-TV; as an example, most cities have only one newspaper; the legal framework has failed in its stated objectives to the extent that it is an insult to the public's intelligence.

C. Another Media Review.

The above introduction reflects what has been said many times before in the magazine "Optionality". Predictably, the newly elected Government is once more reviewing the media, this time focusing on cross-media rules, in the light of objectives such as "plurality, diversity and competition in the provision of media services in Australia".

TV in Australia is controlled by different sets of rules. There are cross-media rules that forbid owners of, say, a newspaper to buy a TV-station in the same geographical area; there are foreign ownership restrictions for both TV and newspapers, administered by the Foreign Investment Review Board; for TV, there is furthermore a prescribed proportion of local content; advertisement is regulated; content is rated and restricted at hours that younger viewers are more likely to watch, etc, etc.

The current review asks whether these cross-media rules should be abolished. Many argue that all the above ownership rules are outdated and that competition, plurality and diversity in the media should be dealt with only by the Australian Competition and Consumer Commission (ACCC), perhaps complemented by government grants and subsidies for local artists, rather than by restrictive legislation.

Current ownership rules are indeed out of step with globalization and with new technology that allows content that previously could be carried only by a specific medium, to be offered using alternative media. Cable-TV, satellite and pay-TV are now competing for viewers that were previously hooked into the main networks. The Internet can offer email, voice telecommunications and sound, and even moving pictures. This has been discussed before in "Optionality" (see e.g. "Access Restricted", October 1994). But this is not the big argument; the Government seems keen to put the responsibility for competition in the media in the hands of the ACCC; since the acceptance of the Hilmer-review into competition policy, the ACCC has already been actively scrutinizing TV, cable-TV, satellite, pay-TV and telecommunications. Thus, regulatory responsibility has already shifted to the ACCC, making the abolition of ownership rules a mere technicality regarding competition policy.

D. The Width of Markets.


The big argument is whether the concept of "market" should be interpreted broadly, so that some local monopolies in, say, newspapers are acceptable under the Trade Practices Act, as long as the owner has no dominance in a wider market including new media such as pay-TV, satellite and cable-TV, and perhaps also telecommunications, Internet, etc. However, this can lead to seemingly small monopolies that can determine the fate of entire media. Dominance in a small market such as rugby league can determine the face of pay-TV and cable-TV, as discussed in the article The Evil Side of Sport. Thus, it makes sense that the ACCC be given more "bite", e.g. the power to order even small monopolies to be split up within a certain timeframe. This way, outdated media ownership rules can be safely abolished. Also, the multi-cultural society that Australia likes to be doesn't need local content rules or other rules favoring one specific culture. As shown in the appendix below, the culture that claims to be "Australian" has turned out to be alien. In the end, however, any competition policy is limited in bringing cultural change, as discussed in article Competition Policy's Limits. A vision that looks further will include Optionality.


Appendix: Imperial Relics in the Media.

Australia has long been ruled as a remote outpost of the British Colonial Empire; although this empire is now largely history, many imperial relics continue to act as if the Queen still rules in Australia. In fact, the Queen still is head of state in Australia. Conservative forces try desperately to preserve the status quo, even though most people agree that the Monarchy is an anachronism.

Imperial values are still entrenched in many sectors of society, in particular in the media, the "shapers and shakers of cultural values".

Books in Australia are controlled by a cartel of British publishers. This cartel has often been attacked by the Trade Practices Commission, now the Australian Competition and Consumer Commission (ACCC). As the ACCC argues, this cartel is a blatant violation of the Trade Practices Act that forbids such anti-competitive restriction of trade. Similarly, the ACCC has spoken out against the situation in music publishing in Australia. In both cases, politicians have not had the guts to end such practices.

As a result, publishers of music and books continue to rip off consumers by over-pricing, by providing bad quality service or by excluding specific items from the retail shelves.

In Australia, many have this old-fashioned mentality that Australia should be controlled by a handful of people who "know what is best for the people", as a legacy of the past when "superior culture" reached down on Australia from imperial offices in London. Until recently, news in Australia was dominated by Reuters (RTV) and World Television News (WTN). Kerry Packer has a long-standing stranglehold on WTN. From the beginning of TV in Australia (1965), RTV and its predecessor, Visnews, supplied TV-news to the other Australian networks. Only recently did the US agency Associated Press manage to offer its services to the TV networks and it promptly won over all networks except Kerry Packer's Nine Network, at prices that reportedly were approximately half those of RTV.

The Government has always been hypocritical regarding its foreign ownership restrictions in the media. Is the cartel that controls books in Australia OK, because it is British? People without Australian citizenship are prohibited from doing all kinds of things, but exemptions are made for many British subjects. Rupert Murdoch has become a US citizen, a move that symbolizes the cultural shift from British to US influence in culture. Most films and programs seen on TV in Australia are made in the US. Foreign ownership and content regulations are part of an alien and out-dated culture.






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