Australian Competition and Consumer Commission chairman Rod Sims has backed a push for media reform, criticising current legislation as outdated and possibly protectionist.
Mr Sims made the observations in a speech to an RBB Economics conference yesterday, as Communication Minister Mitch Fifield drafts options to present to federal cabinet, possibly before Christmas.
He said the reach rule, which prevents a TV network from broadcasting to more than 75 per cent of the population, potentially limited competition and efficient investment in the industry.
Mr Sims also believes the two-out-three rule is outdated. This rule prohibits a person or company from controlling more than two out of three media platforms, in commercial radio, television, or newspaper.
Due to the diversity of news sources today, and emerging technology, this law was obsolete, he said.
“Indeed, we need to ask whether the two-out- of-three rule is preventing the efficient delivery of content over multiple platforms, and should be reviewed to see whether it is still relevant for the preservation of diversity.” – Rod Sims, chairman of the Australian Competition and Consumer Commission
“This rule was introduced before the emergence of the internet. Now people can read overseas newspapers as easily as they can local ones, and they can stream or otherwise gain access to endless content.
“Regulation that relies on particular platforms will always run the risk of being obsolete as technology and consumer preferences change.
“Indeed, we need to ask whether the two-out- of-three rule is preventing the efficient delivery of content over multiple platforms, and should be reviewed to see whether it is still relevant for the preservation of diversity.
“Conversely, such a rule, may give some firms the impression that they can be protected from technological change.
“Surely laws that restrict acquisitions need clear justification. Changing technology may have made the initial justification for the two-out-of-three rule, from 30 years ago, redundant.”
Mr Sims said the ACCC’s interest in media law was triggered by the bid by pay-TV broadcaster Foxtel to purchase a 15 per cent stake in Ten Network Holdings, a transaction to which the regulator gave the green light.
“The reach rule is potentially limiting competition and efficient investment in the industry,” he said.
“With regard to the recent Foxtel-Ten transactions, it could be observed that the reach rule may have limited the ability of existing shareholders of free-to-air networks and other broadcasters from investing, or increasing their investments, in Ten,” he said.
However, he believed an anti-siphoning regime sports broadcasting should be retained for sports broadcasting, a step that would have significant repercussions for Foxtel, a joint venture between News Corp Australia and Telstra.
“While there are serious questions to be asked about the two-out-of-three and the 75 per cent reach rules, we believe that, also for competition reasons, some form of anti-siphoning regime continues to be required,” he said.
“We believe this to be the case because Australia has, in essence, a near monopoly pay TV provider in Foxtel.
“The concern is that, without the anti-siphoning regime, Foxtel could acquire exclusively all premium sport and reduce competition in the television viewing market.”
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