A test, but in whose interest?

Running a public interest test is notoriously difficult. If an independent regulator runs the test, it will have two options. Either it spends a year consulting with stakeholders to determine what is the public interest or the meaning of “public interest” will be tightly defined in the enabling legislation.

This in turn leads to more issues. Part of the reason for the Convergence Review recommending the establishment of a new independent regulator is that the members of the review did not consider that the Australian Communications and Media Authority (ACMA) is independent enough.

The Convergence Review wanted to see a new regulator with a different culture and the skills required to balance public interest needs with fast-paced mergers and acquisitions activity.

This detail seems to have been lost.

Instead, the public interest test appears to have taken a life of its own either as a “Get Gina” test or a “fit and proper person” test. If a Minister conducts a public interest test, then there will be a tension between public interest and policy interest. Politicians of all hues believe that their policies are in the public interest.

“The ACCC is very strong at running any form of economic test. It is not suited to running a test in a sector regulated by social policy”

Unless there is bipartisan agreement, then the policy interest and the public interest are unlikely to coincide. Further, the public interest is likely to change with governments – hardly the regulatory certainty that is required to remain in the media business (broadly defined) and particularly troublesome for the newspaper and magazine sector. As was demonstrated in the case of Alan Bond, Australia has never had a functioning “fit and proper person” test.

The other kite being flown is to give the public interest test to the Australian Competition and Consumer Commission. The ACCC, my former employer, is very strong at running any form of economic test. It is not suited to running a test in a sector regulated by social policy rather than economic and competition imperatives. It might take on such a task if it also has a process for determining the public interest or if the term is defined in legislation – but these are the two options for a new regulator.

Australia has a long history of non-intervention in ownership and control of the media from a political perspective. There have been policies to promote diversity of ownership and control and some attempts at the promotion of pluralism.

Menzies preferred newspaper proprietors to run commercial television when it was introduced and Keating declared that a person could be a “prince of print” or a “queen of screen” – but not both. However, editorial control has remained with the editors.

Some media companies, such as Fairfax, have adopted board policies to ensure that proprietors do not exert editorial influence. In others, this type of policy would never be applied as the proprietors have taken a financial interest in the company purely for the purpose of editorial influence.

Rushing a public interest test as an alternative to a Leveson like inquiry or to “Get someone” is likely to lead to unintended consequences. Political intervention into editorial control must be rejected with every effort available.

Dr Rob Nicholls is regulatory advisor at Webb Henderson and the former general manager of Communications at the Australian Competition and Consumer Commission

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