It’s About More Than Just Phone Hacking … Unfortunately

If you want to know what actually happened in the British phone hacking scandal, you won’t find it in the Leveson inquiry report released last Thursday.

The report comprises almost 2,000 pages; it’s spread across four volumes and has 59 separate chapters. It has a lot of stuff about media history and ethics and philosophy; a lot of hand-wringing about press “culture” and personal friendships between Fleet Street and Westminster.

But not a lot about who committed what crime and when.

For instance, the fact that Rebekah Brooks and Andy Coulson (both ex-News of the World editors) are in court this week facing charges of corrupt payments to public officials does not inform the report.

Nor the fact that at least three public officials have been arrested for misconduct in a public office – that is, corruption.

Lord Justice Leveson is recommending statutory regulation of the press before his inquiry has gotten to the bottom of the phone hacking scandal.

Even by the woolly standards of judge-led policy advocacy, this is pretty stark. Especially considering his proposals would be a reversal of the four-century-old victory of free press over state power.

The Leveson inquiry’s terms of reference are split in two. Part 1 looks at the “culture, practices, and ethics of the press”. Part 2 investigates the specific allegations of unlawful conduct and corrupt payments between press and police.

This is the real issue, as I argued in July last year. Criminal acts are a bad thing and should be punished. But criminal acts with the assistance of police are much, much more disconcerting. Thursday’s report is Part 1. Part 2 hasn’t even started yet.

Operation Elveden – the Metropolitan Police Department’s investigation into corruption in the police force – is ongoing. Leveson writes that he doesn’t want to step on its toes. Repeatedly throughout the report, witnesses suggest serious things. For instance, unnamed senior officers are “rumoured to be corrupt”, but the story ends there, “for fear of undermining what could be an ongoing investigation”.

Still, the first report reveals a litany of errors, misjudgements and bureaucratic backside-covering that allowed the scandal to build before it exploded in 2011.

Between 2001 and 2003, the Devon and Cornwall Police discovered a ring of retired and serving police officers selling information from police databases to private investigators. The investigators were then selling that information to various clients, some of whom were journalists.

Such privacy breaches are not unusual. Over the last decade, more than 200 Metropolitan police officers and civilian administrators have been disciplined for wrongfully accessing the Police National Database. The current commissioner described this to the Leveson inquiry as a “chronic problem”.

But when the Devon and Cornwall Police cases went to court, the judges let the accused go with conditional discharges. They didn’t even get fined.

When the story surfaced again in 2006 (this time the Royal family was claiming its private phone messages were being listened to) memory of the pathetic sentences given to the earlier cases meant the London police were reluctant to aggressively push their investigations. It just wasn’t worth the effort. That, and Britain was at the height of the anti-terrorism campaign. In the wake of the London bombings, chasing privacy prosecutions was less a priority than hunting violent Islamists.

Still, one reporter – News of the World’s “one rogue reporter” – was prosecuted. As part of its investigations, the police found a huge list of potential victims, but it failed to notify them.
Three years later, the Guardian and the New York Times published allegations of widespread phone hacking. This time, the police stonewalled. The issue had already been dealt with. To admit that there was more to the case was to admit that they were wrong to draw a line under the rogue reporter in 2006.

The Milly Dowler story erupted in July 2011. The police had been in possession of seized documents with her name – and Hugh Grant’s name – since the first investigations in 2003.

I’ve dwelled on this timeline because it is the closest the Leveson report gets to an exploration of the specific failures that led to the phone hacking scandal.

It’s all well and good to wax lyrical about ethics and press culture. But if we want to link problem to solution – a basic requirement in the development of good public policy – we have to know what actually caused the events we’re concerned about.

And too much of the Leveson report is divorced from the phone hacking itself. You can understand why David Cameron offered Leveson such a wide brief – he was embarrassed about his relationship to the now disgraced Andy Coulson. But the distance between scandal detail and regulatory proposals undermines the point of the whole inquiry.

To be fair, Leveson’s effort is far better than Australia’s Finkelstein inquiry. Here, Justice Ray Finkelstein wasn’t even given a scandal to work with – he had to construct a justification for press regulation out of thin air. Where Britain had the Milly Dowler case, Australia had the vibe of the thing.

So it is not insignificant that the Finkelstein and Leveson recommendations were so similar: statutory regulation of the press disguised as “self-regulation”. In the UK this is apparently the solution to widespread criminality. In Australia it is apparently a solution to … well, what exactly? The strongest case Finkelstein could come up with was that newspapers gave an unbalanced presentation of climate science.

But there’s a vocal group of people who want a new regulator backed by government, so that’s what gets recommended. Is there anybody who didn’t think Leveson or Finkelstein would call for new regulation? The only suspense has been for the details.

Last week David Cameron rejected those details – he would not cross the Rubicon into press regulation. Hopefully, Julia Gillard and Stephen Conroy will do the same.

Stay tuned for the red underpants theory of bad TV

Occasionally, usually by accident (sometimes if they think nobody is listening) politicians say what they really believe.

“I have unfettered legal power,” Communications Minister Stephen Conroy told an obscure conference in New York in September. “If I say to everyone in this room, ‘If you want to bid in our spectrum auction you’d better wear red underpants on your head’, I’ve got some news for you. You’ll be wearing them on your head.”

Conroy was clearly having a bit of fun. But he’s right. He has complete, arbitrary and absolute control over who broadcasts on the airwaves and the circumstances in which they broadcast, and that control has been disastrous for television consumers.

Let’s call this the ”red underpants” theory of why Australian TV is so bad. Australia seems to have completely missed the great television renaissance. In the US and Britain, audiences are being treated to some of the most brilliant high-quality television the world has ever seen – think of everything from Mad Men to Breaking Bad to The Thick of It.

But Australian commercial TV is languishing. The networks are producing nothing comparable to what’s being made overseas. Their biggest problem is how quickly they can show foreign programs before everybody downloads them. This week Channel Ten announced both a full-year loss and voluntary redundancies. Channel Nine is buried in debt and flirting with receivership.

It’s easy to feel sympathy for those whose livelihoods are threatened. It’s hard to feel sympathy for the networks. The television broadcasting industry is probably Australia’s last, greatest vestige of crony capitalism.

Mr Conroy’s unfettered red underpants power – and that of the communications ministers who’ve gone before him – has been used to protect broadcasters from competition, lock out new technologies and entrench tired business models.

Basic economics tells us that when you deliberately limit competition you lower quality. Basic politics tells us when governments and corporations get into bed, consumers lose.

Broadcasting was a protected industry from day one. In 1905 the Commonwealth government took absolute control over the airwaves with the Wireless Telegraphy Act. The government had delayed passing the legislation for a few years. It was worried that the new wireless technology would be a competitive threat to the existing telegraph cable companies.

From then on, anybody who wanted to broadcast had to apply to the government for permission.

Throughout the 20th century, politicians forged close relationships with media moguls. Each scratched the other’s back. Politicians who played ball were treated kindly by the broadcasters. In return, governments kept away competition and protected advertising revenue. As one broadcasting regulator said in the 1970s, all decisions about the airwaves were ”very substantially influenced by political considerations”.

The number of radio and television stations has been strictly limited. It is extraordinary that in 2012 we still do not have a fourth television network.

New technologies were deliberately held back. The US had FM radio in the 1940s. There were experiments with FM transmission in Australia in 1947. But AM broadcasters didn’t want the competition. The government only licensed FM stations in 1974.

The delayed introduction of pay television was just as scandalous. There were several proposals to offer Australians pay TV services in the 1970s, but it wasn’t until the early 1990s the government relented. Even then it banned pay-TV advertising for the first few years – just to keep existing free-to-air broadcasters happy. Free-to-air television is still protected by laws that give it first dibs on the best sporting content. Don’t imagine this is done for the public’s benefit.

When the government finally got around to introducing digital television – a technology that allows the broadcast of dozens more channels on the same limited spectrum – the spectrum was offered exclusively to the three existing commercial networks. This is effectively a gift of hundreds of millions of dollars to a broadcasting cartel.

In 1959, Nobel Prize winning economist Ronald Coase proposed a way to get politics out of the airwaves. Treat radio spectrum like property, he argued, and let broadcasters use and trade their property as they see fit.

Because a government with unfettered power to force people to wear underpants on their head also has unfettered power to make deals with its media mates against the interests of the public.

Media Diversity Fears Are Absurd And Obsolete

The twin themes of the media debate – new regulation and creative destruction – coexist awkwardly.

Communications Minister Stephen Conroy told Channel Ten’s Meet the Press recently that his government’s proposed public interest test for media acquisitions was not aimed at Gina Rinehart’s investment in Fairfax. In fact, the mining magnate would pass the new test.

This revelation will disappoint many of his colleagues. But thank goodness. The Gillard Government is, happily, not so brazen as to write a new law to stop one particular critic from investing in the media. Doing so would be the essence of arbitrary government, and would be clearly in response to Gina Rinehart’s political views.

Not all media reform is a threat to free speech. But motives do matter. The Government’s hostility to News Limited damned the Finkelstein inquiry. Any new ownership regulation inspired by one specific proprietor would also be dodgy. Some in the government have suggested media purchases could be conditional on signing up to a charter of journalistic independence – which just happens to be the matter of dispute between Gina Rinehart and the Fairfax board. A coincidence, I’m sure.

So if the Labor government is backing away from such obviously political media laws, that’s good.

Yet Conroy’s defence on Meet the Press still struck a weird note. He argued that any suggestion the test was aimed at a specific person was false because the ALP has been campaigning for a public interest test for a long time.

That’s true. When the Howard government directed the Productivity Commission to look into media regulation in 1999, the Beazley opposition talked at length about public interest guidelines for ownership.

But that was a long time ago. Compare then and now. We had a very, very different media market in 1999. Google had only eight employees. Its news aggregation service was still three years away. And in the compressed history of the internet, Google is relatively old. MySpace didn’t launch until 2003. Most of what we think of as ‘new media’ didn’t exist. Facebook didn’t exist. YouTube didn’t exist. It wasn’t until mid-2000 that Apple starting thinking about music. The first iPod arrived in late 2001.

And when the Beazley-led opposition was first promoting a public interest test, Fairfax shares were trading at a price nearly 10 times greater than today. Indeed, the turn of the millennium seemed like a great time to get into newspapers.

In politics, consistency is usually admirable. Yet there is consistency and there is stubbornness. It’s bizarre hearing Conroy strike the exact same notes as Beazley did a dozen years ago. Everything has changed. Apparently the ideal policy has not.

For both Conroy and Beazley, the goal of extra media ownership restrictions would be to protect a diverse range of opinions and voices. But it is exactly the enormous choice of opinions and voices on the internet which is uprooting the media landscape.

Put it this way: budding moguls would not be able to buy press assets so easily if the newspaper business hadn’t been undercut by the very diversity Conroy claims is at risk. This is a weird recursive loop. Surely we do not believe the extraordinary growth of voices online is reducing the diversity of voices overall.

Yet that seems to be the logic behind the current push for a public interest test.

Policy proposals have use-by dates. Something that is arguable in one decade can be silly in the next. Press proprietors have never been less powerful than they are today. Newspapers and broadcasters do not have the monopoly on information they enjoyed in the past.

That Conroy’s views on this are about 10 years out of date shouldn’t be a surprise. Australia’s communications ministers are notorious for fighting the last war. They have a track record of either accidentally delaying or actively resisting the implications of technology. With motives good and bad, our ministers have held back the introduction of new radio stations, new television stations, pay television, and FM radio.

The Gillard Government’s Convergence Review was supposed to be a break with the past. Yet even it got caught up trying to impose anachronistic laws on new technologies. Local content requirements are one example of regulations which do not make sense in the internet age; ownership limits are another.

So the major policy outcome of the apparently forward-thinking Convergence and Finkelstein inquiries could be tackling obsolete fears of media moguls.

It is absurd to think that just as the newspaper industry is going through a once-in-a-century upheaval, the Government is devising ways to limit investment in the press. But in media regulation, absurd is not unusual.

Should Governments Protect Independent Journalism?

We already subsidise journalism heavily. The ABC’s budget for 2011-12 was $995 million. SBS got $223 million in the same period. And Parliament has specifically nominated the vast bulk of this money to “inform, educate and entertain audiences”.

So it’s peculiar that when media theorists devise clever schemes to subsidise journalism in order to protect democracy – such as publicly funded newspapers, or tax-deductibility for the print media – they rarely mention the money we give SBS and the ABC for that purpose.

Perhaps some people believe we should increase those broadcasters’ budgets. That’s a legitimate debate. Let’s all draw lines and argue it out. But pretending we do not already spend an enormous amount of the public’s money to inform the public is simply dishonest.

Our media debate is very provincial. Fairfax is at a crossroads. News Ltd is too, although that company is reluctant to admit it. Here, the US is about two to three years ahead of us. Their experience suggests the print media will shrink dramatically in the next few years. But it also tells us good journalism is good journalism, whether produced on paper or online.

I hope our two print giants develop new business models that suit the times. Certainly many others will. The online media in the US is vibrant and plentiful. Australian readers and writers have good reason to be optimistic, at least about the medium-term future.

If they want to be taken seriously, advocates of subsidies have to answer some basic questions. How many media outlets does healthy democracy require? We might assume more is better than fewer. But as the past year has demonstrated, many people believe some newspapers and radio stations should be run out of town. Several media critics suggest tabloids and talkback radio are hurting democracy . So just calling for “more journalism” is not much of a guide for policy-making.

Maybe the government should subsidise only “worthy” journalism, if there was a way to define such a thing. The business of the press has always been intimately connected with delivering something people want to read or watch. Right now, the case for even more journalism subsidies is little more than a thought bubble.

The Farce That Is The Leveson Inquiry

On October 7, 2009, News International chief Rebekah Brooks sent opposition leader David Cameron a text message:

I am so rooting for you tomorrow not just as a proud friend but because professionally we’re definitely in this together!

The “tomorrow” in question was the final day of that year’s Conservative Party conference. Cameron would not have been surprised by Brooks’s words. James Murdoch had told him the Sun newspaper would abandon Labour because the Conservatives would be better economic managers. During the Labour conference a week earlier the paper declared “Labour’s lost it”. So while Brooks put it in an unsophisticated way, she was right: professionally they were now “in this together”.

The uncovering of this bare little text message was the fruit of Cameron’s five hours of testimony to the Leveson inquiry into the phone-hacking scandal last week.

The message has been reported in headlines around the world, from the Huffington Post to the Calcutta Telegraph. It is, according to the Daily Mail, “explosive”, “cringe worthy”, “astonishing” and “incredibly embarrassing”.

But embarrassing for who, exactly? Cameron was the one giving testimony, not Brooks. It’s hard to see why an opposition leader securing the support of a media proprietor for an upcoming election should be cringe worthy. That is his job – to gather support where he can.

The Leveson inquiry started in November with Hugh Grant and the parents of the murdered school girl Milly Dowler. Back then, its themes were criminality and police corruption. It was surrounded by arrests and resignations and Scotland Yard. All serious stuff.

But six months later, what was a serious inquiry has devolved into a strange sort of puritanism. Participants are being judged against ethical rules unheard of before Leveson convened. For a newspaper to back a political party is apparently a breach of these novel rules. And friendship between politician and proprietor is outrageous.

The phone-hacking affair no longer has anything to do with phone-hacking. It’s trying to make scandals out of the basic practices of representative democracy.

Politicians cultivate relationships with journalists. They have to, if they want to achieve their political and policy goals. That might seem distasteful. We all share a romantic ideal about the fourth estate being implacably at odds with the first estate. But let’s not be too delicate. Democracy is about coalition-building. Journalists and editors are stakeholders. A politician that does not make friends in the media will not be a very successful politician.

But we also shouldn’t pretend Cameron’s fortunes were solely in the capricious hands of media moguls. Yes, only Brooks’s side of the SMS conversation has been released. But its clear impression is of a proprietor sucking up to an opposition leader – not, as those who imagine Rupert Murdoch has an iron-grip on politics expect, an opposition leader coming cap in hand to a proprietor.

So an ambitious Cameron convinced the Sun to editorialise in favour of his party in 2009. It’s questionable how big a coup this really was. Does anyone genuinely think Gordon Brown could have held on if he’d only had the Sun’s support? Labour had been in power for 12 years. Brown was astonishingly unpopular. And the British economy had collapsed. Tabloids have always chased popular sentiment more than they’ve led it.

In Australia, the Finkelstein Inquiry into media regulation flirted with deeper questions about the functioning of democracy. But, ultimately, Ray Finkelstein had a limited brief. His final report charged towards a single, digestible proposal for a new regulatory body. He steered clear of uncomfortable philosophical questions.

By contrast, the Leveson Inquiry lacks Finkelstein’s modesty. Lord Justice Leveson’s team has now grilled four Prime Ministers and nearly 20 cabinet ministers. They’ve interrogated them about press strategy and public relations, the use of anonymity and favouritism, leaks and friendships.

It’s Cameron’s fault. The phone-hacking was the scandal. But Cameron was embarrassed by having hired Andy Coulson, a former News of the World editor. So he gave Leveson virtually unlimited terms of reference. One of his tasks is to make recommendations concerning “the future conduct of relations between politicians and the press”, which would seem to encompass every aspect of political and government communication.

Future historians will no doubt appreciate Leveson’s forensic accounting of who had lunch with who. But it seems more designed to appeal to the coterie of media critics sure that democracy is on the slide.

There’s an absurdity that the Finkelstein and Leveson inquiries share. They both held court on the nature of democratic politics, and they were both conducted by a senior judge whose touted virtue is that they are independent and unaccountable – that is, completely undemocratic.

That Brooks’s artless text message is now seen as a scandal illustrates how farcical the Leveson circus has become.

Convergence Review Is Clever, Subtle … And Worrying

One pregnant sentence in the Convergence Review says, “It is important to note that the current Australian Press Council regime where members can opt out or reduce funding is not an acceptable situation.”

When the review’s draft terms of reference were released in 2010, nobody expected proposals to regulate ‘fairness’ in newspapers would form a core part of the review’s final report.

And that sentence’s claim – that voluntary press regulation is unacceptable, and regulation is necessary – undercuts the review’s repeated assertions that its “underlying approach [is] in favour of deregulation”.

The Convergence Review’s final report was released on Monday. Its task was to develop a framework whereby all media communications is regulated equally, regardless of whether it is distributed by radio, television, or the internet.

So it’s disappointing that the review got caught up in the swirling currents of vitriol between Rupert Murdoch’s newspapers and the Gillard Government.

The Convergence Review has proposed a new, mandatory agency to regulate “standards” in news journalism and commentary. In this, it offers a watered-down version of the proposals made by Ray Finkelstein in the Independent Media Inquiry earlier this year.

But Finkelstein Lite is also Finkelstein Possible.

Unlike Finkelstein’s proposal, this new body would not be a statutory authority, but “industry-led”. It would be funded by a mixture of private and government money. It would be analogous to the Australian Press Council, but no newspaper or broadcaster would be able to quit the new agency if they didn’t like the way they were being regulated – by law, membership would be compulsory.

And unlike the Finkelstein report’s proposal, it wouldn’t have an absurdly large jurisdiction. It wouldn’t catch those websites that had just 41 hits a day, or those tiny street magazines, or those email newsletters. Just the really big guys – Fairfax, News Limited, Ten, Foxtel, etc.

Indeed, the Convergence Review is a very clever document.

It avoids being too clear about what “sanctions” the industry-led regulator would have in its tool kit. And it is ambiguous as to how the regulator would enforce its sanctions. A short sentence buried in the report’s appendix suggests that enforcement would be “contractual” rather than legislative. This odd distinction raises many more questions than it answers.

But nowhere is the cleverness of the Convergence Review clearer than in a diagram which visually represents the media outlets that would fall under the jurisdiction of another new regulator – the “super-regulator” – which is to replace the Australian Communications and Media Authority. (The diagram is on page 12, for those playing along.)

Media organisations will have to meet certain revenue and audience thresholds to qualify. Those thresholds just happen to include all major newspapers and broadcasters, and they just happen to exclude all online media.

The thresholds have been drawn to make sure that Telstra, Apple and Google just fall just below them, and smaller broadcasters like Macquarie Radio Network and Grant Broadcasters pop just above. How convenient.

To be fair, this is thankfully a long way from the expansive plans of an interim convergence report released in December, which would have included everything except “emerging services, start-up businesses and individuals”.

But it’s pretty clear why the thresholds have been drawn so precisely. First: nobody wants to wake up to the headline “Gillard government’s plan to regulate the internet”. Second, and more critically: the Convergence Review doesn’t seem to have quite figured how converged regulation could actually work.

By deliberately excluding even the biggest websites, all the Convergence Review does is kick the ball down the court, and hope the super-regulator will take responsibility later.

It’s a neat way to avoid seriously rethinking the justification for old, legacy media regulations. And, given the Convergence Review’s focus on political feasibility above all else, it helpfully avoids upsetting the status quo too much.

Take for instance the Australian content requirements currently imposed on broadcasters. Sure, it would be tough to ween the culture industry off those long-standing subsidies. But it will be even tougher to shoehorn those requirements into the online world.

The best the Convergence Review can do is offer future online media outlets that provide “professional television-like drama, documentary or children’s content” an option to be taxed to support a “converged content production fund”.

Right now this is all hypothetical, because the Convergence Review draws its thresholds just above Telstra, Apple, and Google. Good decision. Another unhappy headline would be “Gillard Government to introduce internet tax”. But that is the practical upshot of its proposals … just not yet.

For the Government, the Convergence Review has the advantage of being possible to implement. It’s Conroy-ready.

But like Finkelstein’s proposal, the Convergence Review recommends a substantial intrusion into the free press.

Yes, not every little blog will be wrapped up in its regulatory arms. But it would still impose a regulatory body on newspapers, with some unspecified coercive powers, overseeing what is printed.

Don’t be deceived by the claim that the standards body would “industry-led”: it would be a compulsory regulator administering compulsory regulation. There is a world of difference between that and the currently voluntary Australian Press Council.

The authors of the Convergence Review have gone to a lot of effort to make their report subtle, not-too-obvious, politically feasible, and to avoid obviously upsetting the status quo.
But that shouldn’t be any comfort for those of us who still value freedom of the press.

Newspapers Tangled In Politics… That’s Yesterday’s News

Every generation thinks the world they are presented with is unique.

Reflecting on the 1819 parliamentary session, the British conservative Henry Bankes regretted that the government had not done more to “restrain and correct the licentiousness and abuse of the press”. Newspapers are “a tremendous engine in the hands of mischievous men,” Bankes wrote.

Bankes’ complaint was old hat even then. There’s not much new in media criticism. When Ray Finkelstein argued the press fosters “inequality, abuse of power, intellectual squalor, avid interest in scandal, an insatiable appetite for entertainment and other debasements and distortions”, he may not have realised how tired a note he was striking.

The great champion of press freedom, Thomas Jefferson, lamented that nothing in a newspaper could be believed. With obvious disappointment, Jefferson wrote “the man who never looks into a newspaper is better informed than he who reads them”. Journalists had welcomed “prostitution to falsehood”.

John Stuart Mill described the London press as “the vilest and most degrading of all trades”. Edmund Burke considered newspapers as a “grand instrument of the subversion of order, of morals, of religion and… of human society itself”.

We could go on. For as long as there has been media there have been complaints that it is biased, unbalanced, unfair, immoral, reckless, unethical, excessively powerful, and untrustworthy. An unhappy Samuel Johnson said too many journalists of his day were political partisans “without a wish for truth or thought of decency”.

So – for instance – it is hard to understand Robert Manne’s claim that in recent years The Australian has “transcended the traditional newspaper role” and become an “active player in both federal and state politics”. Newspapers have always been tangled up in politics. There is no traditional, non-political role for them to transcend.

Manne wrote in his Quarterly Essay that The Australian is a “remorselessly campaigning paper”. Is this description supposed to be damning?

One of the world’s greatest media moguls, William Randolph Hearst, claimed his newspapers “control the nation”. His New York Journal didn’t just report, it participated. It distributed welfare and disaster relief. It launched public interest lawsuits. It even broke someone out of a Cuban prison – “the greatest journalistic coup of this age,” according to the Journal.

Popular mythology reflects Hearst’s self-aggrandisement by crediting his papers with amazing political power as well. But the reality does not reflect the legend. It suits everyone to talk up the power of the media. Proprietors trade on the illusion of clout, and politicians want excuses for their own impotence. Hearst later made a series of failed political runs. Clearly he thought public office a desirable promotion.

Across the Atlantic, the mid-century press baron Lord Beaverbrook famously said he ran the Daily Express “merely for the purposes of making propaganda and with no other motive”.

Beaverbrook was being playful. The occasion for those words was his interrogation by the 1947 Royal Commission on the Press. That Commission had an eerily similar origin to our recent Independent Inquiry. The post-war Labour party was frustrated with press hostility. Labour had won the 1945 election by a landslide. But most papers in that election had editorialised in favour of the Tories. For Labour politicians egged on by the journalists’ union, this was proof the papers and their owners were dangerously out of touch.

Any semblance of historical awareness should lead us to focus our attention not on the repetitive, unchanging complaints about how venal the press is, but on what is genuinely new.
And that is the extraordinary wealth of new information, new sources, and new outlets available to media consumers in 2012; our access to the global press online, social media and ‘citizen’ journalism, the opening up of the journalistic processes, and, even, the democratisation of media criticism.

While the complaints about journalism made today are virtually indistinguishable from those made by Henry Bankes in 1819, the environment in which the media operates is totally different.
The Finkelstein Inquiry was given two tasks. The first was to look how the internet challenges newspaper business models. The second was to look at press standards and quality. One of Finkelstein’s biggest failures was not coherently joining the two tasks together – what the second task meant in light of the first.

Finkelstein’s proposed News Media Council is strikingly similar to the 1947 Royal Commission’s recommendation that British newspapers be governed by a General Council of the Press. (The Royal Commission’s threat of statutory regulation led the industry to form the UK Press Council.)

It’s as if nothing has changed in the meantime.

The Duke of Wellington defeated Napoleon and made it to the office of prime minister – few were more respected and influential than Wellington – but he privately complained to his family that Britain’s real rulers were “the Gentlemen of the Press”.

It is a professional pastime of politicians to complain about newspaper influence and the grubbiness of journalism. We do not have to treat their whining as novel. And we must not believe it is anything more than the traditional antagonism between government and press.

Regulating From A Distance: Finkelstein, Politics, Power

The structure of the News Media Council proposed by Ray Finkelstein is complicated.

The council would consist of a chair and 20 other members. Half of those members are to be drawn from the public. The other half would come from the industry, but they cannot be managers or shareholders. The chair should (of course) be a judge or an “eminent” lawyer.

The council would be appointed, not by parliament, but by a separate, independent body comprised of three senior academics, the Commonwealth Ombudsman, and the Commonwealth Solicitor-General. The three academics would be chosen by a board of university vice-chancellors from across the country.

So that’s one independent body, appointed by another independent body, most of whom will be appointed by a third independent body.

This elaborate composition is supposed to demonstrate maximum impartiality and objectivity.

After all, it would not do to have any whiff of politics near something as sensitive media regulation. The risk of impropriety – or just the impression of impropriety – would be too great.

This allows Finkelstein to write in his report that, beyond its funding and powers, “government should have no role”. It’s a curious claim.

Do not imagine, as his language implies and some have since suggested, that his proposals are just industry self-regulation with a little bite. Finkelstein describes his scheme “enforced self-regulation” – a term drawn from the regulatory theory literature but one which is virtually meaningless.

An independent regulatory agency is the Government. Sure, the News Media Council wouldn’t directly answer to Julia Gillard. It wouldn’t be democratic. But it would have coercive powers, would be funded by compulsory taxation, and its journalistic codes of conduct would be mandatory. This is the very definition of ‘government’. Any limit on free speech it imposed would be a limit on free speech imposed by the state.

The idea behind independent regulatory agencies is simple, and superficially attractive: to get the politics out of policy and compliance. Rather than having politicians oversee the decisions made by regulators – with all the risks of corruption and political manipulation that would create – the agencies are separated from the rest of the government. They are delegated their powers by parliament, but they are not responsible to parliament.

Independent regulatory agencies are relatively new to Australia and Europe. There were virtually no such bodies in the 1960s. Governments of the early and mid-20th century were vast public utilities, owning industries and enforcing cartels.

The untold story of the “neo-liberal” reforms of the last few decades is how privatisation and trade deregulation was matched by an extraordinary explosion of new regulation. And to enforce this huge corpus of new law and regulation, state power was spun off into dozens of independent bodies. The responsibility for regulation was moved out of ministries and into agencies.

Along every measure government has grown. Government has expanded its reach and ambition and brought more activities into its web.

At the same time government has become less democratic. That is a feature, not a bug. Those who call for regulatory independence worry parliamentary representatives could interfere in technocratic decision-making.

It’s a reasonable concern. Politicians are driven by politics. They have political motives, political aims, and use political tactics. They are the last people you’d want in charge of regulation.

Yet we seem reluctant to over think the implications of this change. Certainly, there are other undemocratic parts of government – the courts and the police are the most obvious. But regulatory agencies are one of the fastest growing areas of government power.

And these agencies make government policy. Parliament provides the general legislative framework within which those agencies operate, but leaves them to refine their goals. The regulators are free to pursue their own agendas and set their own direction. In a very real sense, they shape (within the limits of parliament’s legislation) the law of the land.

Outside the democratic spotlight, the independent agencies are highly susceptible to regulatory capture – that phenomenon where special interests manipulate the regulatory process to favour their own interests, rather than the interests of the public.

In Finkelstein’s proposal, the News Media Council itself would write the code by which the media is governed. This would avoid the taint of partisan politics, which is good, but would at the same time have the limits of democratic debate circumscribed by a committee appointed by university vice-chancellors.

It is well to imagine regulations which might, if perfectly and uniformly enforced, change things for the better.

But the choice which modern advocates of greater regulation offer is unappealing: give power to politicians, and risk the corruption and politicisation of public policy, or give power to independent regulators, and allow unelected and unaccountable bureaucrats to govern economy and society.

The Greeks have been rightly upset that their government has been replaced, virtually wholesale, with European technocrats.

As independent regulatory agencies blossom, we might start thinking about what it means for democratic control to be eroded as government expands.

Convergence Review: Complete, Spectacular Failure

The Convergence Review “has assembled what could be a workable model for regulating the converged media environment,” said Greens Senator Scott Ludlam last week.

Really? The review’s interim report, released on Thursday, is a lot of things but “workable” isn’t one of them.

The Convergence Review’s purpose is to reshape communications and media law in light of the rapid technological changes over the last decade.

And if its interim report is anything to go by, the review has completely, spectacularly failed.

Just take one of the most prominent examples of its entirely unworkable suggestions. The report recommends imposing minimum Australian content requirements on all “Content Service Enterprises” that provide audio-visual services. Those Content Service Enterprises include websites.

The extent of regulatory intervention to do so would be extraordinary. The effort to distinguish Australian websites from international websites would be significant. The incentives to avoid these new regulations would be enormous.

Certainly, the Interim Report says “emerging services, start-up businesses and individuals should not be captured by unnecessary requirements and obligations”.

Yet that one-sentence caveat begs more questions than it answers. Who draws the line between an “emerging service” and an established one, and according to what principle? And why, exactly, is it that start-ups and individuals should be excluded? What theory of media regulation distinguishes between old and new companies, between companies run by one person and companies run by two, between companies doing innovative things and those which are not?

So that caveat, rather than suggesting the Convergence Review has thoughtfully engaged with the complexities of its task, reveals it has been unable to devise a coherent model of communications regulation which makes sense in an online world.

This failure is a particular disappointment because the Convergence Review was supposed to be the real game. Yes, it is just one of a bunch of reviews into media law. But only the deliberately naïve think the Independent Media Inquiry is anything but a political attack on hostile newspapers, and the National Classification Scheme Review is too constrained by its limited brief to recommend any serious reform.

The Convergence Review, by contrast, had scope and ambition. Scope: it was to look at all media from broadcast television to blogs to newspapers. Ambition: it was to take the communications revolution seriously and construct a regulatory framework which could last 20 years.

And it asked the right question. Now that you can listen to the radio on your computer, browse the internet on your TV, and read newspapers on your phone, why should the law treat each service and each technology differently? Forget whether News Limited gave the stimulus package a fair go, or whether Rob Oakeshott is being quoted accurately. This is the most important media policy question right now.

In The Drum in September I argued media convergence necessarily implies deregulation.

It is impossible to impose on the internet the same complex, technocratic, micromanaging regulations which have governed Australian broadcasters.

And even if it were possible, it would not be desirable. Any limit or imposition on what an organisation can publish or broadcast is a restriction on freedom of speech. In Crikey last week, Bernard Keane wrote the Convergence Review “represents the most far-reaching proposals for internet regulation since the Howard government banned online gambling” – much more substantial and threatening than the internet filter ever was.

It follows that if we are to have a new framework regulating all services consistently, broadcasting regulations should be lowered, not internet regulations raised.

Yet such genuine reform would require challenging the obsolete content regulations which have built up over the last half-century. The idea “Australian voices” need to be protected and subsidised is anachronistic – since the rise of home video, television networks or regulators stopped being able to dictate what media content we watch. More than ever our media consumption is about choice. If Australians want Australian content they will seek it out. If they don’t, they won’t.

The Convergence Review goes boldly in the other direction. Drawing on a “wide range of views”, the report concludes there “is an ongoing need for government intervention to support the production and distribution of Australian content”. This claim makes it impossible for the review to meet its brief.

Not to say they haven’t tried. One option for Content Service Enterprises, if they can’t produce Australian content themselves, is to support “a converged content production fund”. In practice, that seems to be a tax on websites to fund Australian television production companies.

Not quite the radical, principled rethink about media regulation we were hoping from the Convergence Review.

But a sad reminder of how hard it will be for regulators and legislators to ever come to grips with the communications revolution.

Opening statement to the Independent Inquiry into Media and Media Regulation

I have serious concerns about the political circumstances under which this Inquiry was formed. The relationship between the government, the Greens and News Limited is unrelentingly hostile, as we all know, and the Inquiry is clearly and explicitly the result of that hostility.

Nevertheless, obviously questioning the political purpose of the Inquiry is within the terms of reference and I would like to speak to those, but I think that the circumstances under which the Inquiry was formed do actually provide an implicit guide for the Inquiry itself. The Inquiry needs to avoid any suggestion that the result of those circumstances is an increased regulatory burden on the opponents of the government.

I am also concerned because the Inquiry, in my view, seems to be asking some of the wrong questions and travelling down some of the wrong paths. Never before have consumers had more access to more media. Never before have citizens had such an opportunity to create their own media, and never before have the business models that sustain the press been under such intense and escalating strain. The walls that separate journalists from consumer, blogger from publisher, commenter and broadcaster online are completely breaking down. It is my strong view the implication of these trends implies that regulation of the press should be, if anything, reduced. Certainly I will go further and suggest that many of the concepts which have been raised and may be raised in the future by this Inquiry might be seen as anachronistic within the next decade.

I don’t speak from a journalism perspective, but from a political economy and political philosophy perspective. Many of the suggestions that have been raised so far by some submissions and some commentators in the press I find extremely objectionable when we consider the high importance that the liberal democracies place on freedom of speech.

It is my view that journalists, commentators, bloggers, people yelling on street corners and even media moguls should have their freedom of speech protected equally. Thank you.