The ABC, ‘Independent’ to a Fault

With Sinclair Davidson

It is appalling that a sitting government should have to complain that the ABC is repeating Labor lies as facts. The ABC itself should be ashamed to have received such a complaint. Yet that is precisely why the Labor Party supported the establishment of the ABC – to provide a forum for pro-ALP news and opinion. This points to questioning the precise meaning of what is meant by the ABC being “independent”.

The Charter describes the ABC as an “independent national broadcasting service”, and it is that independence which forms many arguments in favour of public broadcasting. But this notion of independence needs deeper examination. The ABC is a state-owned broadcaster, which is dependent on triennial funding arrangements drawn from the Commonwealth budget, which is set by the political discretion of the government of the day.

ABC supporters refer to the ABC’s independence in two senses. First, it has editorial independence from the government, insofar as it is a statutory agency that is self-managing and separated from the normal chains of political accountability. Second, it is independent of the interests of advertisers and private sector media moguls, providing the “independent information” that the commercial media might not.

Public broadcasting has always been defined against the evils of private broadcasting, and the theme of an independent bulwark against the commercial media (the moguls and monopolists) has been integral right from the start. In the early years it was claimed that a purely private media market would be simultaneously disorderly and monopolistic. In the debate over the 1932 bill, the Labor member for Kalgoorlie, Albert Green, warned of the “chains of newspapers … obtaining such a stranglehold over the eastern part of the Victoria, and disseminating its propaganda through the stations that it controls”. The private monopolisation of radio – “one of the most revolutionary additions to the pool of human resources” – was constantly invoked by Labor members throughout the early debates. This concern, they felt, was more than just theoretical. The 1931 election loss showed, they felt, that the private media was systematically biased against the Labor Party, and a public broadcaster would be able to right that wrong.

Control of the wireless was the high ground of the political contest. In New South Wales a few years earlier the Lang government had sought to establish a state government radio that would resist what Labor saw as the Nationalist Party-dominated private media. As Albert Green, the most forthright of the Labor members on this point in the 1932 debate, put it:

Some B class stations are controlled by newspaper combines, which use them to broadcast only one political opinion. I had hoped that the air would be free to all, and that at election time every party would be given an opportunity to express its opinions over the air. Unfortunately that has not been our experience. Certain newspaper combines are endeavouring to obtain a monopoly of B class stations, and I sound the note of warning that sooner or later some government will have to tackle the very difficult, but necessary task of dealing with the problem of metropolitan B class stations. Nothing short of a complete national scheme will do.

In this sense, independence was understood by the Labor Party as being pro-Labor – or, at least, not anti-Labor. The 1942 inquiry into wireless reiterated this concern, arguing that public broadcasting was needed “to prevent the service from being used for improper purposes”.

Similar concerns drove the introduction of television. The overwrought claims about the social and psychological power of television only intensified the concerns about the new technology’s political importance. The public position of the Labor Party and the ACTU emphasised the cultural good that public broadcasting television could bring, rather than its role countering political bias. But there is no doubt that politics was front of mind when the labour movement considered the significance of television.

A public disagreement between Arthur Calwell and H.V. Evatt as to whether Labor would nationalise the commercial television stations if they were returned to government pivoted on their different impressions of how sympathetic the ABC was to the Labor Party. Calwell, who had been Minister for Information during the Second World War, had a hostile relationship to the commercial press. He believed that Keith Murdoch, who controlled the Melbourne Herald and several other papers across the country, was “a fifth columnist”, “megalomanic”, and his network of papers “a law unto itself” and “Public Enemy No. 1 of the liberties of the Australian people”. Murdoch’s pernicious influence could not be let onto television. Evatt felt that if the hybrid system was maintained, at least the Labor Party would be able to buy a commercial station to air its views. For its part, the conservative parties were just as aware of the political significance of television, arguing in response to the Chifley government’s proposal to establish a monopoly broadcaster that Labor was “merely another milestone on the socialised road to serfdom”.

The modern ABC’s independence is often declared but in practice is hard to pin down. Unlike the BBC, the ABC was not established under a royal charter, and the 1948 move away from licence fees to funding through budget appropriations brought it more into the political window.

Yet how independent could the ABC be? Compared to private and non-government organisations, the fortune of any state authority is going to be closely tied to the government of the day. Public broadcasters have their budgets set by the same governments which they purport to keep a check on. Commercial broadcasters might be dependent on the goodwill of advertisers, but the fact that there are many potential advertisers is a protection against excessive advertiser influence. A public broadcaster has only one funder, and it is a funder whose interests are driven by political rather than commercial incentives.

Nor are commercial broadcasters required to constantly justify their activities to professional politicians. Public broadcasters are regularly brought in front of parliamentary committees to answer for editorial decisions, from the trivial to the significant. The Senate estimates committee procedure requires statutory agencies to present themselves in front of a committee of Senators three times a year. At her first Senate estimates hearing in May 2016, Michelle Guthrie was interrogated about the cancellation of livestock market reports on ABC regional stations, the ABC Fact Check program, how unionised the ABC’s workforce was, whether the ABC was too Sydney-centric, how many people it sent to the Cannes film festival and how long they were out of the office, and how much the ABC spent on a custom typeface to use across its brands. This sort of scrutiny is, of course, entirely appropriate for a state instrumentality. But the notion that independence is the ABC’s unique value as a media outlet is difficult to sustain.

It is not obvious that independence from a democratically elected government is desirable. The ABC is a state-owned organisation, and like any state-owned organisation it derives its legitimacy from its relationship to the democratic expression of voter preferences. Public broadcasters join a large number of other regulatory and bureaucratic agencies that have been deliberately separated from the normal lines of democratic accountability: rather than being the “arm of the minister”, in the classical Westminster bureaucracy formulation, they are protected from political interference and given independence. In an open market, private media organisations are subordinate to consumers and advertisers. In government, politicians and bureaucracies are subordinate to voters. Independent statutory agencies are, by intention, subordinate to neither. Even at their most benign, they are highly susceptible to capture by their employees and management.

Indeed, staff capture has been a longstanding concern of critics of public broadcasters. As Michael Warby writes, “‘Independence’ from government interference … comes to mean effective independence from whatever tenuous public controls over the ABC exist in practice—it amounts to independence from the direct legal owner”. One of the consequences of staff capture, of course, is political bias. The historical context shows that this political slant is a deliberate feature of public broadcasting, not a bug.

Not our ABC

With Sinclair Davidson

The Australian Broadcasting Corporation is a $1.04 billion piece of public policy and we treat it as exactly that: a government intervention into the market for news, entertainment and communications. Policy interventions are financially costly. Policy interventions are also costly in a non-monetary sense. They can have unintended or counterproductive consequences. They can crowd out non-government activity, stifle entrepreneurship or technological innovation, distort the marketplace, systemically favour particular political interests and ideologies, and create fiefdoms of unaccountable bureaucrats.

The ABC was established in a moment of history significantly unlike our own, facing a cultural and political environment greatly different to our own, with technological and economic challenges completely opposite to those we now face. Over the course of eight decades the ABC has embedded itself in the Australian political system and public consciousness. But the original rationales for the ABC have long since expired. Technology has made the concerns of Australian policy makers in the 1930s – or even the 1990s, when the ABC was last subjected to a major review – redundant or anachronistic. Economic justifications for a state-owned media broadcaster simply do not fit the modern media landscape.

The arguments for public broadcasting in the twenty-first century are simply not compelling. It is certainly the case that the ABC has bound within it an enormous amount of cultural capital as a consequence of its eighty years of pre-eminence in the Australian media industry. But that should not be confused with either a claim that a publicly-funded broadcaster was necessary to build that cultural capital or that Australian culture would suffer in a world where the ABC had been reformed or privatised.

The ABC is an Australian ‘icon’ in the same sense that the Commonwealth Bank was an icon before its privatisation, and in the same anachronistic sense that Qantas, the ‘national carrier’, is imagined to be an essential part of the Australian psyche. We can celebrate the achievements of the ABC, its cultural significance, and its role in Australian history. But that should not prevent us from looking sceptically – as we should with all costly government interventions into the economy and society – at whether the ABC remains good public policy. Does it have a good reason to exist, now?

That question invites us to speculate as to the rationale for the ABC. The ABC itself denies that it is a market failure broadcaster, while the notion of it being independent is difficult to pin down. Independent of whom? It is publicly funded and its management are required to appear before parliament and answer questions posed by politicians. True, the ABC is independent of the demands of commercial reality, but it is not independent of its political paymaster. Of course that undermines the argument that the ABC is a bulwark of democracy. A free press may well be a necessary condition of democracy but that does not necessarily imply that the government should subsidise the press. To the contrary, many non-democratic nations have maintained very high levels of government ownership and subsidy in the media. A further argument undermining the ABC’s claim relates to the large and obvious political bias in its reporting and news coverage. A 2013 survey revealed that ABC journalists are almost five times more likely to be Greens voters than the average voter and twice more likely to vote Greens than the average journalist.

Other arguments for the ABC include quality programming, Australian content, and rural subsidy. What constitutes ‘quality’, however, is a value judgement. Australian content and rural subsidy can be provided for much less than $1 billion per annum. That is the challenge; the ABC is a massive government program with no clear objectives and no clear accountability.

Few Australians would realise that the ABC charter does not include the word ‘fair’ nor does it include the word ‘balanced’. The charter is at best only a loose guide to what the ABC does. Nor is it any constraint on ABC operations. While the charter is spelled out in legislation, section 6(4) explicitly states that ‘Nothing in this section shall be taken to impose on the Corporation a duty that is enforceable by proceedings in a court.’ Additionally, there is nothing in the charter that could be described as an enforcement mechanism, nor any penalties detailed for potential breaches. The charter is in law – insofar as it exists on the statute books – but it is not law that the ABC has to abide by.

What should be done about the ABC? It is certainly the case that doing nothing and muddling through is very much underrated as a government policy. Yet lower-cost alternative public policies are available and clear savings can be made. One possibility would be to refine the charter. In the first instance, the ABC could be redesignated to be a market-failure broadcaster. Alternatively, it could be required to be self-funding, i.e. commercialised. Here the ABC could be required to finance its activities through advertising revenue and then pay dividends to the government. A further option would be to reform the governance of the ABC.

Then there is privatisation. The ABC could be sold off to a single bidder or consortium. Or it could be listed on the stock exchange. Our preferred option would be for shares in the ABC to be given away, either to all Australians or to existing and previous staff. The staff are the best people to realise the value of the ABC – and they would pay for their shares over time through the capital gains tax as they sold their shares.

In this sense the privatisation of the ABC would proceed much like higher education is currently funded. ABC employees would receive their shares at zero-price and only pay for them when they disposed of the shares and only then if the shares had increased in value. The proceeds of the privatisation would be realised over time and would not constitute a ‘sugar-hit’ to the budget. Nor can the privatisation be characterised as a stunt to balance the Budget in the short term. Rather, it is a program to establish a newly-private ABC on a firm footing, vesting it with a cohort of new owners who have the most interest in making it a commercial success.

ABC is about partisanship not diversity

With Sinclair Davidson

The difference between the ABC and Fairfax and News Ltd is that the ABC is a $1 billion government program that provides media services to Australians. Fairfax and News Ltd are private entities that do so at their own expense and hope to earn a profit. Those small details were missing from Laura Tingle’s defence of the ABC published in Weekend AFR.

As such we can expect somewhat different behaviour from the national broadcaster than from the private sector. Indeed, holding the public sector to a different standard is commonplace in our society. The ABC, very often, wants to have it both ways. For example, paying its employees market rates of pay when they don’t have to compete in marketplace for income.

But some criticism of the ABC is unfair. Of course the ABC would send journalists to cover the recent royal wedding. As every other serious media organisation did. That, however, should not detract from the mounting criticism that is being levelled at the ABC.

For all its protestations of “independence” the ABC as a large and generously funded government program can and should be scrutinised by government, the Opposition, and ultimately the taxpayers who pay for it. Having embedded itself into the Australian psyche and culture the ABC has managed to avoid serious scrutiny for a long time. The ABC – like all government programs – should be an election issue at every election.

To justify its existence the ABC and its supporters posit a range of mostly overlapping rationales. We hear a lot about independence, quality and diversity. Less about being a market-failure broadcaster. Rural subsidy also appears to play a role in justifying the ABC’s existence – although it seems to be very Sydney-centric for a rural audience. It was the diversity argument that Laura Tingle emphasised at the weekend.

>But it isn’t quite clear what is meant by the term “diversity”. The idea that media markets might lack diversity has its origins in a famous spatial economic model by the mathematical economist Harold Hotelling. In his model, firms, in a market with a small number of firms and not competing on price, would offer near identical products. Hotelling believed this explained the “excessive sameness” in capitalist markets. That is an interesting model but it does not explain the creation of public broadcasters in Australia and the UK.

To the contrary, public broadcasting in the UK was introduced explicitly to reduce diversity – the perceived cacophony and anarchy of radio broadcasting seen in the United States. The ABC was designed to follow the BBC model (albeit with a small commercial sector alongside). To argue that the ABC provides diversity where the private sector does not is entirely incorrect. What the ABC does is provide those very same services without having to attract an audience.

A generous interpretation of that feature is that there are some media services that should be provided that the private sector won’t provide. But it is difficult to imagine what those services might be. In any event, the ABC explicitly denies that it is a market-failure provider.

What the ABC does provide in excess, however, is partisanship. Any media organisation should be ashamed to be told that it is reporting political falsehoods as facts. Yet Mitch Fifield – the Minister for Communication and (very) nominally responsible for the ABC, did just that. No doubt he’ll be told something about consistency with “editorial standards”.

Those would be the same editorial standards that saw Emma Alberici publish Labor talking points on company tax cuts as if they were uncontroversial facts. The same editorial standards that saw two News Ltd journalists compared to a mass murderer just last week. Yet we are supposed to be fed up with News Ltd antics.

Let’s be blunt here: the ABC burns through $1 billion of taxpayers’ money every year. Not shareholder money, not a mogul’s money. Taxpayer money. The ABC is a not a blog run on a shoestring, or out of someone’s basement. To argue that being left-partisan is simply to compensate for right-partisanship in the commercial sector is to disfranchise all those coalition voters who pay for the ABC. Australians do not expect their government agencies – even nominally independent agencies – to exclude other Australians without excellent reason.

Against Public Broadcasting: Why we should privatise the ABC and how to do it

With Sinclair Davidson. Connor Court Publishing, 2018

The Australian Broadcasting Corporation is a media colossus with a reputation for integrity and quality. It is also a billion-dollar government program that lacks any coherent justification for its existence. Chris Berg and Sinclair Davidson provide a highly readable account of how and why the ABC has come to be in this position. This is the first serious analysis of the rationale for the ABC and its existence in decades.

When the ABC was founded in the 1930s the problem was a scarcity of media. Now that we live in a world of media plenty, it is hard to see why the government is still subsidising a media empire. This book provides an outline of how policymakers can dispose of the ABC, while at the same time preserving its value and realising that value for the benefit of taxpayers.

Available from Connor Court Publishing

Only A Flesh Wound

With Sinclair Davidson

Howls of outrage from the ABC and its fans on social media over the most mild of cuts to the broadcaster’s budget ignore the fact of an institution that has drifted far away from its charter’s demands for objectivity.

Judging by the howls of outrage echoing through twitter it seems that the Turnbull government has destroyed our democracy, if not Australian civilisation itself. But no. The Turnbull government has frozen ABC operational funding for three years. That translates to a ‘funding cut’ of some $83 million.

Not $83 million per year, mind you. Over three years.

Not quite a rounding error, but hardly a crisis.

The ABC only has itself to blame. In the pre-budget period it went well out of its way to annoy the government. The prime minister – a former communications minister – is something of a fan. Yet the ABC chose to publish a highly opinionated and factually challenged analysis by the ABC’s Chief Economics Correspondent of the government’s centrepiece economic policy. Then there was the small matter of pooh-poohing the current communications ministers’ complaint about a conservative politician being pointlessly abused in a comedy skit.

These hostilities have not come cheap.

There may well be a market for ‘edgy’ humour, but the ABC’s efforts tend to boorishness. Reproducing flawed ALP and Greens talking points on company tax cuts as being ‘independent’ and ‘trust worthy’ is arguably a greater problem. These are not minor lapses in editorial policy – the ABC is politically biased and incapable of self-regulation.

Rather than viewing the ABC as a ‘trusted’ news source we should recognise it as being a political actor in its own right. Not just any sort of political actor. Journalists, as David Marr has suggested, are usually ‘vaguely soft-left’ and sceptical of authority.

The ABC, however, is not so vague and not so soft. A 2013 survey of journalists revealed that 41.3% of ABC journalists intended to vote Greens at the 2013 election. That compares with 19.8% of journalists at both Fairfax and News and just 8.7% of the electorate.

ABC journalists are well to the left of journalists in general, and nearly five times more likely to vote Greens than the general public.

To be fair – there is nothing wrong with voting Greens or being left-wing. Journalists are citizens too. But the ABC claims to be a bulwark of our democracy. While nearly 80% of Australians claim to believe that the ABC is balanced and even-handed there is a huge drop off in actual audience numbers. There are three to four times as many Australians who claim to trust the ABC than who actually watch the ABC. Sure 86% of Australians value to ABCs service to the community, but that probably reflects its status as an emergency broadcaster.

Generally there is no reason why political opinion should cloud professional performance. Coalition voting journalists are a minority even at News. Yet none of the mechanisms that crowd out personal preference operate at the ABC. It does not have to please advertisers, it does not have to earn a profit, nor does it not have to explain itself to controlling shareholders.

To claim that the ABC Charter constrains it is laughable. The Charter is written in legislation but it is not law. It doesn’t require anyone to do anything, it contains no penalties for non-compliance, and it has no enforcement mechanism. If only the Tax Act worked on the same principles.

The ABC pleases itself; in practice that means it pleases its staff. To the extent that many ABC journalists are professional in their activities that is a personal preference and not institutional discipline.

Unsurprisingly the ABC does as it pleases and largely it gets away with doing as it pleases.

Being stripped of a mere $83 million over three years is a very mild rebuke from an otherwise indulgent government. Yet the ABC seems to have chucked a temper tantrum in response. Threats to bully the government into restoring funding indexation should be resisted.

Rather than simply restore indexation after three years the Turnbull government should be looking at innovative market solutions to commercialise and professionalise the ABC. Expecting value for money from the ABC is not an attack on its independence but rather a minimum expectation of any government program that costs the taxpayer $1 billion per annum.

Opening statement to Select Committee on the Future of Public Interest Journalism

A free press underpinned by laws and norms that respect freedom of speech is one of the foundations of liberal democracy. The fact that freedom of speech in the press has an important role in our democracy does not mean that parliament should take it upon itself to support journalism, whether it is publicly interested journalism or not. The question of how to fund journalism is a question for entrepreneurs, not the parliament. The reason I argue this is that government is not an uninterested participant in the public debate. Governments have an interest in favouring journalists and media outlets which are sympathetic to their world views and attacking those they do not. We saw how perversely this dynamic could play out during the media reform debate in 2011 and 2013, and of course we see it in our regular debates about the ABC. Further government involvement in the press would mean that governments have more leverage over the press.

With this in mind, I would like to briefly address two issues that have been raised in debate over public interest journalism so far. Right now, the government directly provisions journalism through the ABC and it has been suggested that this provision be increased, but, as Professor Sinclair Davidson at RMIT and I will argue in a forthcoming book, the ABC is not an independent media organisation.

CHAIR: What’s the name of the book?

Dr Berg: It’s at the moment called ‘Against public broadcasting’, but we haven’t actually finalised the title.

Senator XENOPHON: Senator Dastyari is good at book titles.

Dr Berg: We’ll open that up for recommendations, of course, as we would. The ABC is the only media outlet dependent entirely on the government for its operating expenses, it’s the only media outlet regularly dragged in front of parliamentary committees to answer for minor programming decisions and the ABC is regularly accused of bias by the Left and the Right. This bureaucratic one billion-dollar government owned television and radio network is not the ideal vehicle for the sort of journalism that would suit our digital age.

The second issue that I’d like to raise is the proposal to give public interest journalism outlets deductible gift recipient status. This has much to recommend it, in my view. DGR status would be available to media outlets professing any political slant. DGR status would encourage media firms to self-fund, to be accountable to their supporters and readers, and it would not constitute a direct call on public revenue. One concern with this model, however, is that it would require an authority to decide which media outlets are legitimate public interest journalism outlets and which are illegitimate ones. Poorly designed, this could easily transform into a de facto licensing body through which the government may be able to exert some influence over the press. If the committee recommends this sort of reform, it should think very clearly about how that would be done. There are concrete things the parliament could do to help journalism in the digital age. For instance, the government should review limits on the freedom of speech. You probably don’t want me to talk any further about 18C of the Racial Discrimination Act, but I would draw the committee’s attention to the heavy burden of defamation laws and our lack of fair-use exception for copyrights. I welcome the Senate review announced into the law of contempt.

More generally, media outlets will benefit from regulatory reform that reduces the burden of red tape on the Australian economy. The policies which help firms thrive in the general economy would be the same policies that help media firms and, ultimately, help public interest journalism thrive.

Submission to the Senate Select Committee on the Future of Public Interest Journalism

Introduction: It is widely agreed that a free and independent press is an essential part of a democratic order. This submission addresses itself to the implications of the words free and independent. Government intervention in the market for journalism risks undermining the reason we value publicly interested journalism in the first place – its role in providing a check on government and as a third-party watchdog on possible abuses of political, regulatory and fiscal power. When it comes to the profession of journalism and the industrial structure of the media, government is not a disinterested player. Even granting this parliament’s best intentions, government intervention in the media opens up the risk of government interference with the media from future parliaments.

Available in PDF here.

Opening statement to Commonwealth Environment and Communications Legislation Committee inquiry into the Broadcasting Legislation Amendment (Media Reform) Bill 2016

The 75 per cent audience reach rule and the two-out-of-three rule are historical anachronisms that should be abolished. They are nonsensical in an age of media plenty rather than scarcity. However, this discussion ought to spur more radical and forward-looking reform. For the last decade we have discussed in more or less theoretical terms the coming technological revolution in media production and consumption. With streaming services like Netflix, Stan and Presto, news sites like Guardian Australian, the Huffington Post Australia and so forth, as well as the shift in media consumption across to social media, which is arguably more important, these predictions have come to fruition; yet ownership restrictions, with their focus on legacy media organisations, assume a world of scarcity where consumers are forced to rely on content produced by just a few outlets. It is important to note, of course, that historically much of the scarcity in the Australian media landscape has been deliberately engineered to protect large media firms from competition, so claims that we have had to protect Australians from monopolists in the broadcast media with ownership controls have always been somewhat disingenuous.

I would like to make a few points, however, about media diversity in this light. The relationship between ownership diversity and content diversity is non-linear. Parliament might act on one without necessarily changing anything about the other. Given the plentiful media choice we enjoy today, there is a more fundamental conceptual issue, however, that the Senate ought to grapple with when it considers questions of ownership and diversity—that is, the distinction between diversity of availability and diversity of choice. There ought to be no disagreement that a plurality of voices is available to Australian media consumers. There is a near-infinite range of news and views distributed via the internet—and, again, the effect of social media should be front of mind here—but it is often claimed that, despite this choice, many Australians still only listen to a few radio stations, read a few newspapers and watch a small slice of mainstream television, uninterested in the amazing media things going on around them. If this is the real problem consuming parliament’s attention then senators should realise that they are adopting an approach which is fundamentally paternalistic, asserting that despite the best efforts of entrepreneurs and independent producers Australians are still watching the wrong things and policy is needed to change that.

I would like to make two final observations: first, it is not the responsibility of the Australian government, nor Australian taxpayers, to find new business models to support legacy media; second, any consideration of regulatory changes should be assessed in the context of the media landscape as a whole, including some consideration of the policy purposes of the more than $1 billion we spend on the ABC. These reforms before parliament are, in our view, very welcome, but the hard work of reforming Australian media regulation to adjust to this new world, which would include things like structural changes to spectrum allocation, the elimination of red tape like antisiphoning laws and content standards, unfortunately has not begun.

Turnbull’s Weak Media Reform Plans Aren’t Fit For The Modern Age

One of the pleasant things about being prime minister, I suppose, would be pursuing your own little hobby horses. Especially when those hobby horses had been cruelly stymied by your predecessor.

And so the Turnbull Government looks to be pushing ahead with the reforms to media ownership and control that had been quashed – or at least shelved – by Tony Abbott when Malcolm Turnbull was communications minister.

Now the communications minister is Mitch Fifield and the Government is talking about a media reform package being announced this month. Perhaps even this week.

Yet it is striking how limited the reforms being publicly discussed actually are.

The Government has floated eliminating the reach rule (which prevents firms from owning commercial television licenses that cover more than 75 per cent of the population), eliminating the two-out-of-three rule (which prevents a firm from owning more than two of a commercial television licence, a radio licence and a newspaper in the same area) and abolishing television broadcast licence fees.

Each of these reforms could have been done by any government in the last 20 or 30 years.

In his recently published diaries, Peter Reith records a Howard cabinet debate about eliminating cross-media ownership rules all the way back in April 1997. (An unhappy Reith, who wanted more comprehensive liberalisation, complains “we are busily contemplating a highly interventionist approach”.)

The media landscape is completely different in 2015. Here’s what the ABC’s page looked like then. Just 13 per cent of Australian households had home internet access in 1998.

Anyway, we all know how much technology has changed over the last decade. But even in a much shorter time-span the media environment has changed dramatically.

The last time I wrote about the prospects for media ownership reform was in March 2014, when Turnbull first floated the idea of regulatory reform. Since then our viewing choices have expanded to the streaming services Stan, Netflix and Presto. We’ve seen the launch of Buzzfeed Australia, Daily Mail Online Australia, and Huffington Post Australia.

Even the way we conceptualise media has shifted. A larger and larger number of media consumers use Facebook as their primary news source. Wikipedia’s page on “binge watching” was only created in September 2013.

All those technological and social changes materially affect the old arguments for media regulation. Populist fearmongering about press barons and broadcast moguls might have been effective in the 20th century, but only fantasists claim the media is monopolised today.

Nothing prevents media consumers voting with their feet. Nothing prevents consumers migrating rapidly onto new services and shifting their allegiance to more interesting news organisations. Consumers do not lack for choice.

These transformative changes make the Turnbull Government’s proposed reforms look embarrassingly modest. Even the Greens support the elimination of the reach rule. The two-out-of-three rule is absurdly anachronistic. There’s something comic about a regulation in 2015 that conceives of the media as divided between print, radio and television.

As to the elimination of television licence fees, this is more fraught. The Government apparently believes broadcast licences are effectively worth zero, and that charging for the use of a valueless asset is unfair.

It’s certainly true that electromagnetic spectrum rights are worth less than they were. But they’re not worth nothing. It’s a big leap from “traditional broadcasting is no longer special” to “traditional broadcasting is worthless”.

Anyway, if the Government really believes that, then where’s the proposal for a fourth free-to-air commercial television network? Or a fifth? The incumbent broadcasters, no longer benefiting from the valuably scarce spectrum, would have no cause to complain.

One “high level spokesman” was quoted in The Australian yesterday saying that “if the Government believes one law needs to go, then they all need to go”. Indeed. The technological changes that make some media reform possible also allow for more dramatic media reform.

For instance, anti-siphoning laws, which regulate the broadcast of sporting events, should be eliminated. The spectrum should be privatised, not licensed at no charge. Local content requirements – those archaic remnants of cultural protectionism – should be removed.

Each of these existing regulatory constructs assume a media world where content is scarce, where production and distribution is expensive, and where consumers are locked into free-to-air broadcasting.

Not a world where we browse Twitter on our iPads while Netflix plays on that screen in our lounge room that we still call a television but is really a computer monitor.

Parliament always lags behind technological and social change. But the Turnbull Government wants to be all about innovation. Boldness, not timidity, in media reform would be a good place to start.

Media Regulation: A Critique of Finkelstein and Tiffen

With Sinclair Davidson

Abstract: In this paper we provide a critique of the Finkelstein and Tiffen argument for increased regulation of the press. By failing to incorporate recent advances in the economics of regulation into their argument they fail to provide a coherent and rigorous foundation for their position. This leads them to overlook more obvious policy solutions to the problems they perceive in regulating the press. The Finkelstein and Tiffen paper also neglects to incorporate the political context underlying press regulation in general, and the Finkelstein Inquiry in particular. By underplaying the importance of both the economics of regulation and the politics of press regulation the Finkelstein and Tiffen paper misdiagnoses the problem under consideration and leads to inappropriate policy advice.

Working paper available at SSRN.