Fame Game Filling Our Need For Celebrities

Australian soccer is salivating over the more than 80,000 people who turned up to Sydney’s Telstra Stadium on Wednesday night and watched David Beckham do at least one of the things he is famous for – take a free kick.

But unfortunately for soccer, it wasn’t sport that brought such high numbers through the gates. Most people who attended were only interested in checking out the man who goes home to Posh Spice. One host of a corporate box reported that he had to explain to his guests that the person running around the field wearing yellow was the umpire.

The question of why we have such a fascination with celebrities is a well-rehearsed one. Fame, after all, has no inherent properties. Being famous doesn’t immediately make someone more virtuous or remarkable.

Similarly, it does not, as Bono seems to believe, impart to you any great insight into development economics or the most appropriate structure for giving economic loans to African nations. If your favourite political cause has a celebrity attached, it’s probably wrong. A busy media schedule leaves little room for even the best-intentioned celebrity to study the most humane way of keeping insects off the backsides of sheep.

But those who attended the Sydney exhibition match weren’t just there because they were fascinated by David Beckham (pictured below). After all, any thirst to discover as much as possible about the soccer star would surely be quelled by his series of autobiographies, David Beckham: My WorldDavid Beckham: My Side and David Beckham: Both Feet on the Ground. It is a testament to the cynical ingenuity of English publishing houses that one person could successfully market three auto-biographies, two of which were released a year apart.

Instead, the spectators were driven by a very human, but also a very peculiar, desire to see the celebrity in the flesh. For many of the spectators at the Sydney match, part of the attraction in attending the game was simply to share Beckham’s space in the world.

Certainly, on a practical level, there are some things that you can only discover by seeing somebody in real life, rather than on television. Those who have met John Howard are able to speak authoritatively about his height – the just-departed prime minister is hardly the munchkin depicted in hostile editorial cartoons.

But our desire to see and meet celebrities is more than a desire to assess their physical attributes up close. We have an almost primordial need to confirm that celebrities are, actually, real. Genuine human communication – even if it is one-sided and yelled from stadium seating – is our attempt at breaking down the barrier between celebrity and reality.

Even better when the celebrity is alerted to those attempts at communication – nothing amuses a heckler more than attention from their target.

Watching how someone carries themself, without the distorting effect of television, somehow gives far more insight into that celebrity’s personality. Everybody thinks they are pretty good at judging character.

Celebrities, many of whom are intelligent, are acutely aware of this curiously asymmetrical relationship. And eager to convert intangible fame into tangible cash, they exploit it. Successful celebrities “up-sell” their time to wealthier fans. For sports stars, a sponsorship deal is not just a colourful logo on a shirt, it is a commitment to meet the sponsoring firm’s clients when needed.

The same is true in many fields. Many firms sponsor ballet productions so their guests can mingle with performers. Ballet companies recognise that audiences like to break down the barrier between stage and stalls.

Nevertheless, at least dancers and soccer players have a day job. Paris Hilton is the archetypal celebrity thought to be famous for having done nothing. She might not be talented, but she sure is entertaining. Her life is a train wreck; a complex human drama conveniently serialised in newspaper headlines.

And Hilton’s business model is the same as Beckham’s – when the socialite was shipped down to Australia for the Melbourne Cup a few years ago, part of her job was to entertain cup sponsors. Celebrities who are famous just for being famous are also the most cunning manipulators of this disconnection between fame and reality.

The market for celebrities seems to work fairly well – there aren’t many opportunities for profit that the famous do not exploit. Our psychological need to humanise celebrities is a demand that is efficiently supplied.

No Umpire Needed In Sport Media

The AFL, with its of salary caps and draft restrictions, is one of the most regulated sports in the world. Unfortunately, the Australian media is just as regulated, and the regulations punish clubs, consumers and players.

Protectionism may no longer dominate as an economic ideology, but it lives on in the Australian Government’s approach to the media.

Invariably, from the artificial limitation on the number of television licences, to the banning of advertising on the ABC, to the digital transition debacle, each and every media regulation and reform proposal seems designed to protect incumbent free to air (FTA) broadcasters and penalise their competitors.

Anti-siphoning laws, which give FTA broadcasters first rights over a huge range of premium sporting content, are some of the most egregious examples of this protectionist approach.

FTA broadcasters are granted the privilege by government of not having to compete for broadcast rights in a fair and open market.

Like all protectionist rhetoric, advocates of the current system couch their arguments in the “public interest” and “protecting the consumer” terms. But preventing pay television from bidding for broadcast rights is not without cost.

A modern sporting competition is an extremely expensive affair, and, like any other business, its producers strive to appeal to demanding consumers.

To do so, the sports have evolved, not only in the manner in which they are played, but also through technological innovations that alter the experience for consumers.

Coaches utilise better communications and analysis tools to manage their teams.

Players utilise more powerful – and more expensive – medical advances to prevent injury and enhance performance.

And consumers utilise a variety of print, electronic and broadcast media to access statistics and interactivity to enjoy their game more.

But all this requires money. By restricting pay television from the market for broadcast rights, sporting codes are deprived of a potentially lucrative source of funds.

Competition is intense between the FTA broadcasters, but by banning alternative broadcasters, the final price that broadcast rights are sold at is likely to be lowered.

Anyone that doubts that this is a problem should identify any sporting code or club that wouldn’t be able to use the extra money. Many sports on the anti-siphoning list, like netball and the IndyCar series, do not command the enormous audiences that the big football codes do. Restricting the market for the broadcast of these sports punishes fans – it doesn’t protect them.

With the larger sports, problems are just as evident. The demise of the Fox Footy Channel, a casualty of the lopsided negotiations between FTA, pay television and the AFL, has been a loss for consumers. Die-hard fans are denied the opportunity to enjoy a channel dedicated to the sport to which they are devoted.

If the AFL had been able to negotiate with Foxtel directly, this may have not occurred.

As Justice Ron Sackville, judging a Federal Court case over AFL rights this month, stated: “The poor old AFL is denied the opportunity of a fair and competitive process to get the best price for its product . . .” He continued: “Now, that seems odd.”

Exempt from anti-siphoning restrictions, Football Federation Australia has been able to sign a deal with Foxtel to show all Socceroos, A-League and Asian matches. These rights were sold on mutually agreeable terms, and should help the code establish itself in the mainstream.

The anti-siphoning laws punish consumers and sporting codes, but the larger objection is philosophical, and one shared by the codes themselves.

Those who make a product, own it. The sporting codes should be able to determine to whom and under what condition those rights are sold.

The anti-siphoning laws confiscate the property rights of the producers of sport.

A better approach would be to treat content broadcast on television or radio neutrally. Governments should not be making a determination of the relative importance or merit of certain forms of entertainment. Doing so punishes the very consumers that these laws profess to protect.

The Government’s media reform bills have not tackled with any rigour the Government’s regressive approach to the media. Unfortunately, its penchant for protectionism does not appear to be abating.

Sports are supposed to be competitive, why can’t broadcasting be the same?

No Street Cred For Council Party Poopers

When the State Government offered councils a $6000 grant to develop street party kits last year, it was no surprise that they jumped at the opportunity. Not only is writing complicated protocol documents a major highlight of working for local government, but the Byzantine regulations that the kits were to help navigate were imposed by the councils themselves.

One part of government bribing another part of government to do what they should be doing anyway has become a staple of Australian politics. Why should councils miss out on all the fun?

The resulting street party kits are a grand monument to the bureaucracy and red tape that is impeding social and community life in Australia. These elaborate bundles of forms, rules and recommendations demonstrate clearly how the steady accumulation of seemingly trivial regulations can quickly become a restraint on community activity. The regulations aren’t those that apply to major festivals on the scale of last weekend’s Johnston Street Fiesta – they apply to small neighbourhood barbecues.

Certainly, many of the issues covered within the kits are, on the face of it, sensible. Washing hands before handling food probably isn’t a bad idea – it would be poor form to poison your neighbours while you were trying to get to know them.

But, as the City of Whitehorse demands, having to provide party volunteers with comprehensive food handling information in the form of written instructions is taking this a bit too far. Nobody wants a reputation in the street as the guy who loves to produce paperwork.

And don’t bother trying to sell any food or drink. Children’s lemonade stands are only possible if those children are able to fill out Community Amenity Local Law No. 1, Schedule 3 (Parts A and B) and Schedule 7.

The City of Stonnington’s 25-page safety plan appears to require the party organiser to assume responsibility for the safety of all guests – planning evacuation and ambulance routes, assembly areas and marshalling points, memorising emergency announcements, and strategically placing fire-fighting equipment around the party location.

Some rules are completely ridiculous. Stonnington requires party organisers to keep an incident kit close by at all times. This should contain a fluoro jacket, gaffer tape, torch, area map and sunscreen. They also require party organisers to nominate a communications liaison to negotiate potential clashes with local event venues, and to retain an electrician on call, just in case.

Street gatherings are not known for being rowdy. Nevertheless, the Moreland City Council insists that sound levels do not exceed 65 decibels. This exhilarating volume is just louder than a humming refrigerator and a little below a hair dryer. It is also above a quiet conversation. As a result, laughter, which surely ranks high on the list of attributes of a good party, is essentially prohibited within the People’s Republic of Moreland.

Presumably, the 65-decibel limit is also why many street party kits, when recommending that CDs are played at a street party, specifically nominate acoustic music. If you anticipate your street party may exceed the 65-decibel limit, you may be required to hire an independent acoustic engineer for the duration of the party to monitor your guests’ volume.

Councils and the Victorian Government recommend that a street party be held on the street itself. To do so, six weeks before the party is to occur, an application for road closure must be submitted to the local government. Forms demonstrating that the road closure has the support of more than 75% of the street’s residents must be submitted. A traffic management plan to be jointly prepared with a council traffic engineer must also be submitted, along with all the necessary fees and charges required to navigate the bureaucracy. This kind of ridiculous red tape is a major roadblock to community life.

The State Government-funded street party kits also raise another question – whose job is it to actually sit down and write them? The kits contain pages and pages of tips on how to have a good party. For instance, Whitehorse recommends that guests introduce themselves and recall the funniest thing they ever saw on the street. Developing topics for small talk is hardly a core role of government, and yet state taxes are being funnelled to council bureaucrats to do just that.

And the condescending advice that neighbours should share power tools and wave to each other when they pass on the street should make everybody wonder how stupid councils think their residents actually are.

Local governments enjoy dramatically less media scrutiny and voter interest than their state and federal counterparts. As a consequence, they are free to impose far more absurd rules than other levels of government. Local governments are adamant that they are trying to encourage street parties, but if they keep putting up these obstacles, they may not get invited to them.

Religious Right? Have A Little Faith In The Process

Christian voters can look forward to receiving special information packs about the election from the Australian Christian Lobby this week, which is bound to send yet another shudder through the inner-city left.

The bogeyman of the 2007 campaign is the idea that there is a growing religious right in Australia – an ambitious movement of social conservatives carrying the banner of Jesus, eager to take control of national politics. In God Under Howard, Marion Maddox described a Federal Liberal Party beholden to Christian groups in the same manner that the Republican Party in the United States is influenced by evangelicals. The disproportionate power held by Family First, the conspicuous musical enthusiasm of the Hillsong Church, and the revelations about the Exclusive Brethren all seem to support this view.

If this is the case, well, such is the nature of representative democracy. Theorists may declare that democracy reflects the voice of the people but it has always been susceptible to highly co-ordinated special interest groups. Organised groups with strong institutions and well-defined agendas do well in a democratic competition. But it is not at all clear that there is a religious right in Australia with the ambitions and influence ascribed to it.

The Prime Minister is fond of describing the Liberal Party as a fusion of two distinct philosophies – liberalism and conservatism. As a result, some in the ranks of the party are undoubtedly social conservatives motivated in part by religious sentiments.

But their policy influence is dramatically overstated. Eleven years of the Federal Liberal Party in government has hardly seen regression in ethical policy. We can criticise their reluctance to push for liberalisation in some areas, such as gay marriage, at least until recently. But the Government’s record demonstrates a regrettable attachment to the status quo, rather than a desire to return to the God-fearing moral codes of the Victorian era.

Neither does Family First match the description of a religious right. Its focus may be on gay marriage, internet pornography and reducing rates of abortion, but there is little material difference between Family First’s policies and the policies of the major parties.

And when we investigate the party’s platform further, it becomes obvious that on economic issues Family First is well to the left of the Labor Party on foreign ownership, privatisation, tax, workplace relations and free trade. Voters who believe that the ALP has gone soft on many key economic issues such as industrial relations would do well to have another look at Family First.

Similarly, most Christian groups are moderately left-leaning. Modern Christianity wields ambiguous and empty phrases such as social justice as easily as any Labor backbencher.

This is no surprise – the Bible provides little explicit support for free market capitalism.

The concept of a religious right appears to have been imported wholesale from the US, and uncomfortably shoe-horned into Australia’s public debate. Australia, as a country with a small and wealthy population, will always partly depend on imports. But not everything that is imported is easily integrated into the culture or embraced by consumers. Twinkies – the heart attack-inspiring rolls of cream and sponge cake – have never found a willing market in Australia despite being ubiquitous in the US. Rhetoric about the religious right is just as inappropriate in Australia as the Twinkie. The religious right, to the extent that it exists, is small and has little impact on public policy.

Why, then, the breathless hyperbole? Politics is mostly about opposition and demonisation. Perhaps the fantasy that the right wing of Australian politics is a cookie-cutter, sorry, biscuit-cutter duplicate of the hated US Republican Party helps build group solidarity on the secular left.

But isn’t there enough to enrage the left without awkwardly importing ideas from overseas? Surely rhetorical exaggeration and indignation is one area where it would be better to grow local.

Policy without Parliament: the growth of regulation in Australia

Introduction: Regulation is a political activity. It sets the framework for the market economy by defining the boundaries between private action and government action. It is, since the failure of overtly socialist models of political economy, the primary method by which the government relates to individuals and communities.

Regulations, and the regulatory agencies which administer them, cast an increasingly large shadow over the freedom to interact, both economically and socially, in Australia.

The first part of this IPA Backgrounder looks at the rapid growth in regulation-making, and the recent institutional changes in Australia’s regulatory agencies. It charts the consolidation and expansion of the three major economic regulators — the Australian Competition and Consumer Commission (ACCC), the Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investment Commission (ASIC)—and examines the theoretical justifications for constructing such ‘mega-regulators’.

The second part attempts to explain how these mega-regulators are themselves able to encourage their own growth. It looks at the internal pressures towards regulatory and institutional expansion, as well as the political pressures which the agencies themselves are able to exert upon directly elected politicians.

Available here.

While You Weren’t Looking, Freedom Went Up In Smoke

Are we freer today than we were half a century ago? That question is surprisingly hard to answer. The state control over the economy that characterised Australia in the 20th century is quickly being replaced with nanny state controls.

Barriers to trade have been mostly eliminated, and state monopolies eradicated. But accompanying that has been explosive growth in social and environmental regulations. There are now more pages of Commonwealth legislation introduced every year than were passed in the first 40 years of federation.

In our social lives, freedom has both advanced and retreated. For example, restrictions on the sale of alcohol have eased. But they have been replaced by nanny state measures such as smoking bans. In the future, cigar bars will be as distant a memory as the six o’clock swill.

Since smoking bans were enacted this year in Victoria and NSW, sales growth in pubs has dropped significantly. Hotel patronage may return to former levels – international experience seems to indicate that it will – but when smokers return to the pub, they will be less free than they were in October last year.

Unquestionably, advocates of individual liberty and personal responsibility have lost the battle on smoking. That’s not surprising – smoking is reviled by everybody who doesn’t enjoy it. In a liberal state, that disagreement would be sorted out by negotiation; before the bans, many restaurants and hotels already enforced non-smoking areas or disallowed it entirely. But in a nanny state, such negotiations are replaced by force of law.

Similar sentiments lie behind restrictions on poker machines. The gaming industry is a political football to be kicked around at every state election, while individuals who value their freedom to enjoy the pokies are ignored.

In a nanny state, the government morphs into an over-eager insurance company, assuming the role of risk-manager for its citizens. Any risky or unhealthy endeavour has to be eliminated – individuals cannot be trusted to assess the risks themselves.

The next target is food. Numerous proposals are on the table to tackle our expanding waistlines, including banning certain types of fats, banning junk food advertising, and even taxing fatty food.

Earlier this year, the Labor Party hinted that it was considering banning the use of licensed characters such as Shrek in junk- food advertising, should it win government. Last week, the Cancer Council of Australia came out in support of a general ban on junk food ads aimed at children.

However, there is little evidence that such bans work. Both Quebec and Sweden have tried them, but neither have seen any reduction in childhood obesity. There are twice as many overweight children in Sweden as there were 15 years ago, even though the Scandinavian country has had a ban on all advertising aimed at children since 1991.

Furthermore, politicians hurrying to make political capital out of medical problems such as obesity and lung cancer rarely think through the unintended consequences of their policies.

Swedish advertising bans have not reduced obesity, but they have had other results. Losing the revenue from the highest-paying advertising has reduced the quality and quantity of children’s television programs. Similarly, restricting the advertising market has raised the cost of toys in Sweden to 50 per cent above the average European level.

The Australian Government’s hard line on tobacco has had similar consequences. Smokeless tobacco products have been swept up as the nanny state tries to purge society of everything that meets its disapproval.

It is unfortunate that Australia lacks a strong intellectual history emphasising individual liberty and personal responsibility. Our “she’ll be right mate” attitude is easily swamped by our calls for government to intervene in personal decisions.

Laws are passed with little reference to how they will affect our freedom. As a result, individual liberty in Australia is slowly being eroded by neglect.

The Net Is Anarchy: Keep It That Way

The internet, long seen as a neutral realm free of government interference, is now hot political property. Not surprisingly, therefore, both the European Union and the United Nations are now trying to grab control of the internet. This has major consequences for business and for individuals.

Since 1998, a non-profit organisation named ICANN (Internet Corporation for Assigned Names and Numbers) has been responsible for managing and coordinating the internet’s domain names. ICANN ensures that what is typed in the address bar matches the site trying to be accessed. Such an organisation is necessary to ensure the stability and growth of the internet.

At the moment, the internet is an ungoverned, unregulated, anarchic medium – merely a mutual agreement between computer users all around the world to connect to each other in a certain way. Given this blank slate, business and innovation has thrived online. Business to business commerce has exploded over the past few years. In Australia, 31 per cent of businesses reported placing orders over the internet in 2004. This will grow as business uptake of broadband intensifies.

Until now, ICANN’s role has been merely to facilitate and smooth this explosion of internet activity.

The European Union, as well as a motley collection of less-than-democratic nations such as Iran, Cuba and China, are forcefully trying to replace ICANN with an as-yet-unspecified UN department. Such a proposal will be under consideration at the United Nations Working Group on Internet Governance meeting next month in Tunis.

Arguing that the internet is a global resource, the European Union insists that the private sector must share its responsibility of overseeing it with the UN.

By ceding this power over to governments, every aspect of the anarchic freedom that the internet represents is under threat. The UN wants to use the internet’s structure to pursue specific goals – to close the “digital divide” and to “harness the potential of information” for the world’s impoverished.

But the inequalities the UN claims it wants to overcome stem not from the internet itself, but from government policy. Syria has even advocated taxing domain names to subsidise an international universal service right.

No matter how hard the new UN body will try to reverse the “digital divide” by reallocating domain names and shifting the location of servers, the only way that internet uptake can be increased internationally is through action within the countries themselves.

That is, the same way any technological advance has filtered down to the poorer countries. By building stable institutions, maximising economic freedom, and ensuring prosperity, which creates consumer demand. No amount of political action by the UN can replace this process.

The defining characteristic of the internet is not intelligence or its capacity to fulfil specific aims, but its simplicity. It is a “dumb” medium, which is only structurally suited to transmitting data from one computer to another. It can’t conduct public policy.

Businesses and individuals have come to rely on the internet to carry out their personal and commercial interactions. UN control threatens this.

What this new bureaucracy would clearly be able to do is restrict and censor websites and addresses, as well as place heavy regulatory burdens on their authentication, maintenance and pricing structure. This is a prospect no doubt relished by European social democrats who would like to extend their national content and industry policies across national borders.

Consider the countries most actively pushing for the UN takeover. Leading the charge is Iran, with Saudi Arabia, China, Cuba and Venezuela hot on its heels. None of these nations is known for their promotion of political, economic or social freedoms. Iran bans more than 10,000 websites on charges of immorality, and jails journalists and bloggers who disagree with the ruling elite. The “Great Firewall of China” has a similar effect.

Should the internet be under the control of a network of regulators hammering out compromises about what is and isn’t proper online activity? Member states in the UN run the gamut from the totalitarian to the democratic. Any attempt to assert control will result in an approach contrary to the liberal democratic ideals that dominate online activity.

The internet needs the technicians of ICANN, not the policy committees of the UN.

Broadband: Another Telco Monopoly Would Be A Disaster

If the Expert Taskforce into broadband infrastructure was supposed to delay scrutiny of the government’s broadband policy until after the election, then it isn’t working.

The Taskforce was formed to evaluate proposals for broadband infrastructure roll-out, and assess the regulatory or legislative changes that that may require.

Debate over telecommunications regulation hardly needs its fire stoked. But, oddly, the loudest agitator over the last week has been the communications minister herself.

Helen Coonan has spent the last few days apologising for speculating that the taskforce could recommend the structural separation of Telstra.

And yesterday in the Australian Financial Review she raised the possibility that the government could help pay for a proposal that delivered fibre-optic broadband all the way to the home. This too was quickly retracted. The Minister, a spokesman claimed, was speaking “hypothetically”.

Conspicuously, one option which has been not withdrawn is the potential that the winning broadband proposal will be granted a monopoly over broadband infrastructure. Coonan periodically refers to this possibility in her public addresses and it goes unchallenged. But granting an infrastructure monopoly would stifle competition in the telecommunications industry far more than it is already.

While the Taskforce prepares to receive the first broadband proposals, almost any regulatory change is on the table. But the one thing that the taskforce cannot yield on is the most important and controversial – the requirement that any new network be open to access by competitors at a “non-discriminatory” rate. The taskforce’s job is to devise some regulatory conditions under which a firm would both build the fibre network and share it with competitors.

But it is this sort of mandatory access regulation that has drawn the telecommunications sector into its current regulatory quagmire. Access regulation encourages firms to piggyback on existing infrastructure, rather than competitively build infrastructure themselves.

And fibre-to-the-node will hardly be the last broadband infrastructure Australia ever needs. When the next upgrade inevitably appears on the horizon, mandatory access regulation will still be hampering investment.

Coonan let this cat out of the bag when she raised the possibility of government subsidies for a future, higher-speed network – a tacit admission that she does not believe that the telecommunications industry can manage and fund its own investment while the existing regulatory framework remains.

The Taskforce’s requirement that the new network be open for access by competitors merely demonstrates that the government has learnt little from the failures of telecommunications regulation. To appropriate the Minister’s artless phrase – whatever the Taskforce concludes in February next year, telecommunications regulation will still not be “future-proofed”.

Telco Industry’s ‘Red Tape’ Burden Unfair

The telecommunications industry has never been as politicised as it is in 2007.

As a result of the ongoing fight between the Federal Government and Telstra over broadband regulation, there are few of Telstra’s business decisions that aren’t immediately pounced upon by politicians trying to gather potential votes.

One new target in this seemingly eternal stoush is Telstra’s migration of its rural customers off its CDMA mobile telephone network, and onto the highly publicised Next G service.

Next G was launched in November 2005, and provides customers with a far superior service than the ageing CDMA network due to be switched off in January next year.

But doing so isn’t that simple.

Communications Minister Helen Coonan and the Attorney General Philip Ruddock have argued that Telstra should be prevented from making the switch until the Next G network provides at least the equivalent coverage of the existing CDMA network.

The Government has imposed an additional licence condition upon Telstra to that effect.

However, Telstra argues that that level of coverage will be achieved later this month and therefore the new licence condition is redundant.

With so many marginal seats in rural areas, that the Federal Government would be paying attention to a new mobile network in the bush is not surprising. But, by imposing a new condition on Telstra’s CDMA licence, it indicates a willingness to intervene opportunistically in the affairs of a private sector company for political gain.

The Government has preached at length about the need to cut ‘red tape’, but its continued regulation-making demonstrates that it is merely rhetoric.

The telecommunications industry has one of the highest regulatory burdens in the Australian economy. The pages of legislation governing the sector has grown from 1,600 ten years ago to over 10,000 today.

For Telstra, this constitutes nearly 500 regulatory reports to government agencies a year. The Australian Competition and Consumer Commission, which manages much of this regulation, has itself doubled in size since 1999.

Regulation diverts firms away from productive activity. And the telecommunications industry is awash with regulatory affairs managers, communications and policy directors, consultants and lobbyists.

There are few sectors of the economy that require more innovation and flexibility than the technology sector. But instead, the future of Australian telecommunications services is vested with governments and regulators, who operate at glacial speed.

When they do finally act, they frequently misunderstand the nature of what they are regulating, or act only to please political constituencies, or even act just to justify their own existence.

It is hard enough for the industry to keep up with Australian consumers’ insatiable demand for new technologies. So when it is deeply intertwined with politics and regulation, it is doubly unable keep up.

But taking a long-term view, this episode illustrates a major policy issue that the telecommunications sector has to grapple with.

The radio-frequency spectrum licences that are necessary to operate a mobile network like Next G or CDMA are ultimately controlled by regulators and the Government, not the firms which actually operate the networks.

This government control of spectrum licences leaves telecommunications firms susceptible to political manipulation. Spectrum management has, since its last major reform in 1992, been overhauled to allow for greater flexibility and ‘ownership’ of spectrum licences by firms.

As Senator Coonan has bluntly shown, these licences still have a long way to go until they can be free of arbitrary government intervention.

Governments need only to follow due process – Telstra alleges that the Communications Minister in this case has not – and they can alter the terms of those licences at their whim.

Licence holders are exposed to the political calculations of the government of the day.

Ideally, firms which held spectrum licences would be able to use those licences as they saw fit and make business decisions about how best to serve their customers.

But in an election year, and in an industry that is highly politicised and highly regulated, that ideal is still far away.

Film Classification Laws Out Of Sync With The 21st Century

With Tim Wilson

Recently a small St Kilda video store, Out Video, drew the attention of the federal Attorney-General’s Department for selling and renting imported titles that have not been classified in Australia. Bureaucrats may be doing their job, but by acting against a small niche video shop, they have inadvertently exposed critical flaws in our film classification laws.

Out Video markets films primarily directed at the gay and lesbian community. Many are produced overseas and never achieve general or selected release in Australia. And because of the prohibitively high cost of classification, they never get classified.

The A-G’s Department contacted Out Video because they were selling and renting out titles not given the all-clear by the Office of Film and Literature Classification (OFLC). As a result, Out Video says nearly half their stock will have to be shelved permanently.

This highlights two major flaws in Australia’s classification regime:

1. The regime has not adapted to a marketplace that allows media to be accessed through more than just domestic broadcasters and distributors. Consumers demand access to an increasingly wide selection of entertainment from overseas, and they can get it through the internet.

2. Our classification laws are not designed to accommodate small markets. Instead, the classification processes are optimised for large, general-release films. The system simply doesn’t lend itself to small-run films, and the law unfairly harms businesses trying to service niche markets.

The targeting of Out Video by the A-G’s Department should give it and the OFLC impetus to review the classification laws. With a vibrant and diverse international entertainment sector, these laws should not blanket-ban content. Such a policy makes a mockery of the liberal legal principle that all things should be legal unless there is a reason to make them illegal.

Many of the films these niche providers import have already been classified in the UK, US and Canada. So one possible solution is to recognise comparable classifications from other media-exporting countries.

But a preferable outcome would be the elimination of mandatory classification. If consumers demanded classification to guide their decisions, then distributors would have a commercial incentive to seek it.

Furthermore, classification need not be the preserve of government. Many private classification regimes exist to rate films on special criteria (the Christian community, for example, has pioneered many alternative rating systems). Under such a regime, films that failed to obtain any form of classification would be burdened with the trepidation of some consumers to buy or rent the product.

The removal from sale or rent of Out Video’s titles will do nothing to reduce their availability. All the “offending” titles are available from online stores outside the country. Australians can order them online and watch them at home, avoiding the scrutiny of the censors.

Furthermore, internet-aided piracy is now extremely common. By denying consumers legal access to small-run films, mandatory classification provides additional incentives for consumers to download illegal copies.

The sale of unclassified material is hardly uncommon. If government bureaucrats want to clamp down on unclassified videos, they should take a walk down Victoria Street or Sydney Road. Both are hives of foreign-language video stores that stock unclassified foreign-language films. In all likelihood the Government wouldn’t dare act in these cases: the electoral backlash would be considerable.

It is unlikely that homophobia played a part in the Government’s decision to enforce the law: it acted because it received a complaint. But if homophobia was the cause of that complaint, it would merely demonstrate how the classification laws can be manipulated.

Current film classification laws undermine access to films for different sections of the community. And businesses that are trying to meet a diverse market demand for unique niche content should not be punished for doing so.