3V and Merlin Integrated Media
Submission to
the Productivity Commission Broadcasting Inquiry,

May 1999.

Part 8

New Media and Its Benefits

8.1 For our company "new media" can be defined as "information, education and entertainment media digitally generated, manipulated, stored, transmitted or distributed to the public".

8.2 This means that "new" media is not a subset of the "old" media, but rather, new media has absorbed the old media almost entirely, with the only exception being the paper-based and analogue video or film distribution of media. The remaining not-yet-fully-digital media of paper, film and video are undergoing rapid digitalisation, potentially leaving only some paper-based distribution, and some users of older media, in the non-digital domain in 5 years time. As such we have suggested changes to the relevant Acts to cover this new conceptualisation of media and the changed circumstances of the broadcasting, media and communications industries.

8.3 We are concerned that new media and particularly the internet are being used as the reason for a relaxation of media controls. While we would agree that ownership - provided content regulation remains - is not an issue, in our opinion controls over the maximum "reach" or audience for one related company, that is cross-media regulation, must be strengthened. This is because simple access to the internet is not sufficient to engage in genuine and reasonable competition with larger, stronger companies operating on the internet.

8.4 This is because the internet is analogous to the television industry model only in terms of the competitive advantage that large companies have over smaller ones as regards marketing, equipment and finance raising. As such, the internet cannot be truly considered a new media model in this case as these older "laws" of the broadcasting and media market also hold for the new market of the internet justifying government intervention and regulation to achieve genuine competition between large and small companies.

8.5 Therefore, just as new independent broadcast players are excluded from access to cable delivery platforms because of the artificially-raised cost of access or a falsely induced "scarcity" of channels, so are new independent media players denied equitable access to an economically viable distribution platform on the internet, hampered by lack of financial backing and marketing strength.

8.6 A healthy media and information economy requires many players, large and small, competing in a fair and reasonable manner to best deliver the benefits such an economy can offer and we feel that only appropriate regulation can protect this diversity against market failure.

8.7 To achieve a healthy media and information economy we recommend:
8.7.1 that legislation ensure access for new and smaller independent media companies and relevant non-profit media organisations to all domains of media distribution through the reservation of a limited number of FTA and cable channels and/or bandwidth (see Tier Zero in Appendices); and
8.7.2 that legislation ensure continued support for production funding bodies that assist new and smaller independent media companies and relevant non-profit media organisations because of the significant cultural and economic benefits they afford the Australian community.

8.8 We also recommend that the idea of a "communications commons" in all domains of the new media be enshrined in the objectives of the Act. This is the best and most efficient way to ensure access and equity in all domains of media. Such a strategy would provide media domains and accessible distribution systems complementary to those provided by large-scale commercial enterprises, and would further benefit those larger companies with an output of skilled producers, innovative programming, and a media and technology literate audience comfortable with new technologies, thereby growing the potential market for media services. This mandated space in all domains of communications would include FTA, cable, the internet and any new future media or delivery system (see Tier Zeroin Appendices).

8.9 For FTA services, we recommend that the national Sixth Channel be used for distributing the program material of members of the CBAA, and that commercial interests be prevented from accessing this channel. This will ensure diversity in the domain of FTA broadcasting.

8.10 However, given the problems experienced to date by community FTA stations, we would recommend that only formally accredited members of the CBAA who conform to strict CBAA non-profit guidelines be allowed to hold licenses.

8.11 For cable, we recommend, as we have to the Duopoly, Telecommunications and related Inquiries, that a multi-tiered system of access, similar to that operating in the US, be mandated on all cable and other media distribution systems in the form of:

a) a Basic Tier delivered free ("Tier Zero") carrying non-profit independent community and education channels, parliamentary broadcasting, a program guide, "samples" of pay programming to attract customers to pay services, and, ideally, retransmitted FTA channels;
b) a Premium Tier delivering pay services and carrying program material currently available;
c) additional Premium Tiers carrying pay-per-view and other similar pay programs of a high-value and high-cost nature.

8.12 For the internet, and particularly because the changing nature of internet delivery will not deliver services to all Australians if left to "market forces", we recommend that a small percentage of bandwidth be set aside for community, cultural and educational non-profit (CCEN) use. The government's recent intervention to ensure supply of a minimum necessary bandwidth to regional Australia is similar to this strategy and is to be commended.

8.13 However, simply ensuring ISDN or similar connection to all Australians does not legislatively underpin the regulation of likely future cost increases that may see this service increase significantly in cost in the next few years, effectively denying access to the internet to many Australians. Telstra is notorious for such cost increases but it is likely that competing services will follow the same basic pattern, particularly for service supply in regional areas.

8.14 To ensure that regional Australia and socio-economically disadvantaged groups have access to the same quality of service that urban Australia enjoys regardless of the state of the economy or Australian industry, we recommend that this access be enshrined in legislation, ideally as part of a legislatively-mandated "communications common" or public lifeline in all forms of media. For further background on the idea of the communications common see Tier Zero in the Appendices.

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