Robert Menzies despised television and stated privately that he hoped it would not be introduced during his government. Does Communications Minister Helen Coonan have a similar attitude towards the next radical media change?
Given the opportunity to robustly liberalise the regulatory environment that the Australian media has been subject to for over a century, the government has declined to act.
There are big entrenched media companies which have made large investment decisions based on the current framework, and the political reality is that genuine deregulation would have to be a slow and careful process. But instead of attempting to unwind our Byzantine media regulations, at whatever pace, the government’s media reforms do nothing more than add more rope.
For instance, the proposed auction of two additional swathes of spectrum should have been greeted with enthusiasm. Entrepreneurial companies which had won these new licences could have used them to deliver whatever services they perceived to be in demand.
Instead, the government has chosen to dictate to potential users the terms and conditions of their licences, terms and conditions which will not apply to existing users of broadcast spectrum. This “command and control” approach to economic management has been discredited in both theory and practise. It’s ill-suited to managing a limited and static array of services, and it’s doubly unsuited to manage the fast paced and high-risk communications and media industry.
It does, however, allow the government to claim credit, as the Communications Minister did this week, for any potential new services delivered within their strict framework. What Coonan fails to mention is the services that the government will not allow us to receive. To this end the government has invented two terms, “narrowcasting” and “datacasting”, defined not by what they can do, but what they cannot.
One of the channels to be auctioned is allowed to broadcast free-to-air, but not replicate traditional TV services. Why not?
The government is not a suitable body to predict the possibilities of and the demand for newer forms of media. Only a market unhindered by restriction is capable of doing so with any success.
Similar objections can be raised to the government’s proposal to replace one elaborate formula for media ownership restriction within a market with another elaborate formula. While touted as a grand liberalisation of ownership regulations, they are in fact, little more than minor adjustments. For advocates of genuine deregulation throughout the economy, this should be a disappointment.
Many critics of the reform proposals hinge their arguments upon the potential lessening of diversity that could be the result of consolidation within the industry.
It is absurd to argue that media diversity will decline without stringent checks on the ownership of broadcast media outlets. In no era in history has this been less true. While the internet has been justifiably praised in bringing alternative viewpoints and independent media outlets to the home, rapid technological improvements in seemingly mature industries like printing have increased in the last few decades the volume of magazines, newspapers and printed material manyfold.
Anybody who doubts that minority or niche voices will not get heard after genuine media reforms should consult the vast ethnic press, made possible by dramatically lower print production costs.
In fact, mergers between media organisations could have tangible benefits. A fully vertically integrated corporation, able to command world-wide news gathering and content production, may be able to produce a far better and diverse range of services.
The massive competitive pressure exerted upon existing media companies from the proliferating new media compels dramatic change, even in such seemingly dominant organisations as News Ltd. Rupert Murdoch’s recent acquisition of the social networking website MySpace is a case in point.
These gains are not guaranteed, however. The US market, after a rush of media consolidation in the 1990s as companies rushed to prepare for the digital era, has been beset by a series of failures and divestitures. AOL Time Warner has been shedding assets now that the financial gains expected from its highly publicised merger have not appeared. Viacom, Disney, Clear Channel, Knight-Ridder and many others have downsized or spun off companies in the last few years.
But these companies need the freedom to experiment, and fail, with new business models.
New media organisations are popular and influential, and will become more so. Governments of all stripes across the world are struggling to predict its significance. That is understandable – nobody has any inkling of how these changes will pan out.
But instead of indulging itself in public consultations and submission processes, commissioning reports and carefully releasing sections of the spectrum with highly prescriptive regulations, the government would be far better to leave the future of the Australian media up to the market.
There is no convincing reason why entrepreneurs, allowed to experiment with new technologies and business models, cannot amply deliver the services that Australian consumers demand now and into the future.