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Bosland, J --- "Regulating for Local Content in the Digital Audiovisual Environment" [2007] UMelbLRS 3

Last Updated: 12 June 2008

Melbourne Law School
Research Series

[2007] UMelbLRS 3

Regulating for Local Content in the Digital Audiovisual Environment –

a View from Australia

Jason Bosland

(2007) 18(3) Entertainment Law Review 103

Regulating for local content in the digital audiovisual environment – a view from Australia

JASON BOSLAND[∗]

I INTRODUCTION

The regulation of broadcasting has always been based on a desire to achieve certain social and cultural goals. One of the fundamental cultural and, indeed, political goals for the broadcasting of audiovisual content in a democratic, mediated society is to encourage diversity, both in terms of the range of content and media “voices”.[1] In Australia, a further aim of broadcasting regulation is to ensure the adequate supply of local audiovisual content on local broadcasting outlets.[2] As such, Australian content quotas have been imposed on free-to-air commercial television broadcasters since the early 1960s.[3]

While content quotas, like most features of media policy, have often been the subject of debate,[4] there is a general acceptance in policy-making and in broader academic thinking, that content quotas have been effective in achieving a certain level of diversity of content on our televisions. Some have also argued that they have been crucial in supporting a sustainable Australian production industry.[5] More recently, however, the looming integration of television with internet and broadband capabilities, as well as the introduction of digital television,[6] has resulted in speculation about the future of Australian content quotas – and, indeed, about the future of broadcasting regulation more generally.[7] In particular, it has been claimed that these new distribution channels have the potential to disturb the longstanding technological and economic factors on which current domestic regulation is based.[8]

This paper explores the future of Australian content quotas in light of digital television and emergent, internet-based television services. Part II describes the current system of broadcasting regulation in Australia, focusing in particular on the interaction between economic and cultural goals. Part III considers the challenges to existing regulation presented by digital television and the distribution of programming via broadband internet. Finally, Part IV examines some of the solutions that have been proposed to achieve adequate levels of local Australian content in the digital media age, including a consideration of a possible solution not yet fully explored in the Australian context: the introduction of a public service publisher, or a PSP. Also considered is how this and other policy responses might be limited by Australia’s recent entry into a free-trade agreement with the United States.

II THE QUID PRO QUO AND AUSTRALIAN CONTENT QUOTAS

Up until now, the need for, and content of, broadcasting regulation has been closely linked to the notion of “spectrum scarcity”: that those who have access to the “scarce” broadcasting spectrum should be required to fulfil certain public interest obligations.[9] The concern is that, if broadcasters are left to their own devices, a market failure will develop, where programming decisions will be based on commercial imperatives, rather than according to broader public goals.[10] That is, programs selected for broadcast will be those that yield the highest “revenue-to-cost” ratio[11]; broadcasters will try to maximise income (whether through advertising or other sources) while also limiting their production costs. Following on from this, it is assumed that, to reduce programming costs, broadcasters will bypass expensive-to-make Australian content (such as local drama and investigative journalism), instead purchasing such content from overseas.[12] Under a revenue-to-cost analysis, this may occur even if foreign programs are less popular in Australia when compared to local programming.[13] It is therefore argued that, given the important role media organisations play in the dissemination of information, and the limited channels available to provide broadcasting services, regulation is required to ensure a minimum level of Australian content.

To avoid such market failure, public interest objectives are met in Australia under the so-called quid pro quo approach to broadcasting regulation. Thus, commercial broadcasters are granted two main benefits: first, access to the “scarce” radiofrequency spectrum, and second, protection against new market entry. In exchange, they must fulfil certain cultural obligations, including meeting Australian content quotas. Under this arrangement, market protectionism guards against the fragmentation of a broadcaster’s audience share, which in turn, helps them to develop a sufficiently large audience to fund the production Australian programming.[14] The achievement of social and cultural goals within Australia’s system of broadcasting regulation can therefore be seen as based on maintaining consolidated mass audiences for commercial broadcasters by erecting artificial regulatory barriers to entry.

The details of the current content quotas imposed on commercial broadcasters are as follows. In short, it is a licence condition for both commercial and subscription television broadcasters to comply with Australian content requirements. The Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS), the two national broadcasters, have no Australian content obligations per se, but rather legislative charters which outline their respective public service obligations.[15] In Australia, there are three commercial networks (Ten, Nine and Seven) and three subscription services (Austar, Foxtel and Optus). Currently, 55 per cent of programming by commercial broadcasters between 6am and midnight, averaged over a year, must be Australian.[16] Within this overall requirement, sub-quotas also apply. Thus, a certain number of hours must be comprised of first-release drama and first-release documentaries, in addition to specific requirements with regard to the level of Australian childrens’ programming.[17] Each of the subscription licensees, on the other hand, is required to spend 10 per cent of their program expenditure on new Australian content.[18]

This effectively supports a working market for Australian content, considered by economists to be a “merit good” – a good which generates or fulfils a public benefit but for which nobody is willing to pay or produce in a free market.[19] New distribution technologies, however, are likely to undermine the highly regulated relationship between the economic privileges and social and cultural burdens within the quid pro quo, meaning that the role of commercial broadcasters as ‘investment engines’ for desirable Australian content will be placed under strain.[20]

III NEW TECHNOLOGIES AND NEW CHALLENGES: WHAT IS THE PROBLEM?

Related drivers of technological change are digital television and the ability to deliver audiovisual content via the internet and other emerging digital platforms. These technologies have two potential consequences for the future regulation of terrestrial broadcasting. First, digital compression and transmission technologies, which result in greater spectrum efficiency, have called into question the underlying spectrum scarcity justification for broadcasting regulation. The argument is that the less scarce a resource, the less need there is to regulate it for the public interest. Furthermore, with spectrum scarcity no longer a technical limitation justifying regulation, arguments have been made that the number of broadcasters operating could (or should) be determined by economic considerations alone.[21]

A second related consequence is that the transmission efficiencies of digital terrestrial broadcasting and the deployment of new digital delivery platforms for content have the potential to disrupt the quid pro quo by opening up the broadcasting sector to channel proliferation and greater competition through new market entrants.[22] The concern is that this will diminish individual broadcasters’ audience shares, meaning that the economic benefits to broadcasters under the quid pro quo will not be realised. In turn, it might be questioned whether commercial broadcasters will be able to continue meeting cultural obligations as they currently stand, and even whether it is appropriate in a fragmented market that they be subject to them in the future.[23]

A Digital Television Broadcasting

Digital terrestrial television broadcasting commenced in Australia on 1 January 2001.[24] In addition to improved sound and picture quality, the main benefit of digital transmission is that it greatly increases the channel carrying capacity of the broadcast spectrum,[25] meaning that there is a technical capacity to transmit more content and new services. Foremost is the ability to multichannel – that is, to provide more than one stream of programming using a single transmitter.[26] Multichannelling is possible because the amount of spectrum currently reserved for the transmission of a single analogue channel can be used to transmit four to six digital channels of similar resolution and quality (called standard definition, or “SDTV”).[27] Alternatively, the same amount of spectrum can be used to transmit a single high definition (“HDTV”) stream of programming.

In terms of content diversity, multichannelling would appear to be a positive addition: more channels means more content. At least structurally, this is true. Evidence from the pay TV industry, transmitted by cable and satellite, suggests that multichannelling enables niche programming to satisfy diverse interests. But, while digital television potentially allows for greater diversity through the provision of more channels, economic modelling suggests that the number of free-to-air channels that can be supported by advertising alone is limited.[28] This is because, assuming the total size of the potential audience pool remains constant,[29] increasing the number of channels will reduce the audience level for each individual channel, meaning that broadcasters will be less able to deliver mass audiences to advertisers.[30] Running additional channels will also mean that overall programming costs per audience member will increase.[31] Thus, faced with a less profitable revue-to-cost ratio, broadcasters are likely to act to reduce programming costs in order to maintain adequate profits.

The question facing policy makers, therefore, is how to accommodate content quota requirements in a fragmented, multichannel environment, where the economic benefits of the current quid pro quo might not be realised. Could commercial broadcasters meet the costs of maintaining current levels of Australian content across multiple channels? Or, would it be appropriate to alter the content quotas so that the overall proportion of Australian content on television is reduced? Alternatively, if the current quota levels are maintained, would there be a decline in the quality or production values of Australian content produced as commercial broadcasters seek to reduce their programming costs? This raises further concerns about the fulfilment of other objectives for broadcasting regulation in Australia: namely, the provision of “high quality and innovative programming”, which is a stated object of the Broadcasting Services Act.[32]

So far the impact of multichannelling on Australia’s regulatory arrangement has, to a large extent, been held at bay.[33] The legislation which introduced digital television[34] prevents commercial licensees from multichannelling[35] and allows only a limited multichannelling right for the national broadcasters, ABC and SBS.[36] These restrictions were included at the instigation of the Nine and Ten Networks as well as the subscription broadcasters,[37] who at the time had recently invested heavily in cable and satellite infrastructure in Australia and who argued that it would be unfair to allow commercial broadcasters to offer multichannel subscription services.[38] The commercial free-to-air broadcasters, on the other hand, argued that multichannelling would disaggregate their audiences, and hence, their advertising revenues.[39] They also stressed the importance of offering better television rather than more television, and in their lobbying of the government advocated that digital television should be in HDTV rather than SDTV mode.[40] Consequently, the first piece of digital television legislation that was passed prevented all broadcasters from offering additional digital channels.[41] It was also mandated that transmission be in HDTV mode, meaning that the spectrum efficiencies offered by digital were (at least) delayed.

Following lobbying by the ABC and the SBS another piece of legislation was passed[42] which, among other things, permitted the national broadcasters to each offer an additional digital service confined to highly prescribed genre restrictions.[43] The rules regarding HDTV were also modified. The new legislation required that commercial and national broadcasters transmit all their programming in SDTV mode, with an additional minimum of 1,040 hours per year to be also broadcast in HDTV format. This effectively meant that broadcasters were required to triplecast: once in analogue, once in SDTV and once, for at least 1,040 hours per year, in HDTV.[44] This was seen as necessary due to a perception that the cost of HDTV reception equipment was prohibitive compared to that required to receive SDTV signals.[45]

By limiting the use that could be made of the digital spectrum, the government’s approach to the introduction of digital television can be seen to reinforce the privileged positions of the incumbent commercial broadcasters and to restrain the impact of digital on the existing industry structure.[46] This is in stark contrast to the UK. There the focus has been on multichannelling and the use of digital terrestrial television as a way of injecting vigour into the television market – particularly as a way of providing competition for the dominant subscription multichannel provider, BSkyB.[47] Each of the incumbent analogue broadcasters were given unrestricted use of a “digital multiplex”, which was large enough to carry numerous digital channels, and a further three-and-a-half multiplexes were licensed to provide new digital television services. The result, after one subscription-based terrestrial venture failed,[48] is “Freeview”. This service currently offers around 30 free-to-air digital television channels, comprised of the digital simulcast of the existing free-to-air “analogue” channels,[49] additional digital-only BBC, ITV channels[50] and other commercial channels, as well as a limited selection of BSkyB programming.[51] Freeview has been seen as the main driver of digital television in the UK, with Ofcom, the industry regulator, reporting that Freeview has accounted for the greatest growth in digital television since it was launched in late 2002.[52] Indeed, following the launch of Freeview, the UK has been seen as a world leader in digital television conversion, with the latest figures showing that approximately 72.5 per cent of UK households receive some form of digital television.[53] By comparison, digital television in Australia has only been adopted by approximately 25-30 per cent of households.[54]

While the UK multichannel approach has been successful in converting consumers from analogue to digital television, there are legitimate practical reasons why Australia did not, and perhaps could not, have adopted a similar multichannel approach. Apart from the fact that commercial broadcasters in Australia generally tend to have an enormous amount of influence over media policy formation,[55] and that successive governments have been reluctant to disturb the fine balance of the quid pro quo by introducing new services, obvious differences exist in relation to the size of the markets in Australia and the UK, as well as their respective industry structures. Most notably, for current purposes, is the relative financial status of the BBC compared to the ABC, with the BBC receiving approximately four times the public funding – adjusted for population – of the ABC.[56] The BBC has absorbed many of the costs associated with the Freeview multichannel service, both as an equity partner in the Freeview brand and also in terms of programming.[57] A service comparable to Freeview would be difficult for the ABC to sustain in Australia under its current funding structure. Furthermore, there are doubts about the ability of the commercial free-to-air sector in Australia to maintain a larger multichannel environment – at least if all channels continued to be subject to current programming requirements. Considering the greater population of the UK, it can be assumed that the aggregate advertising revenue will be far more capable of supporting a Freeview-style multichannel environment in the UK than it would in Australia.[58] Indeed, the conclusion of one economic study that the Australian commercial free-to-air television industry would be unable to sustain the introduction of a new entrant gives credence to this suggestion.[59]

A government discussion paper on media reform issued in March 2006 reinforced much of the existing policy on multichannelling, albeit with a number of concessions.[60] Thus, the government said its preferred approach was to maintain the restrictions on multichannelling for commercial broadcasters until the end of the “simulcast period”: the period during which commercial broadcasters are required to broadcasting in analogue and digital mode. Analogue switch-off is now expected to commence between 2010 and 2012.[61] However, the government also proposed that the commercial and national broadcasters’ HDTV quota of 1040 hours per year could be used for different programming, rather than merely to simulcast their analogue and SDTV services. This means that commercial broadcasters would be able to offer one additional HDTV multichannel service prior to digital switch-over.[62] The removal of the current genre restrictions on the multichannel services of the ABC and the SBS was also proposed.[63] Following a short period of public consultation, a final policy framework was released by government in July 2006.[64] The final policy packaged adopted the changes just described, but with one notable difference in relation to multichannelling: namely, that the commercial broadcasters be allowed to offer one additional SDTV multichannel service from as early as 2009. A bill reflecting this final policy package was passed by the Australian Parliament on 18 October 2006,[65] meaning that as of 2009, commercial broadcasters will effectively be able to offer up to three different streams of programming rather than the single stream currently permitted.

In the various government and non-government policy reviews that have focused on the possibility of commercial multichannelling (with a number recommending its introduction),[66] the issue of Australian content has receive varying attention. For example, the House of Representative Standing Committee on Communcations, IT and the Arts, recommended that all multichannelling restrictions should be lifted by 2008.[67] In reaching this conclusion, however, there was no recommendation or discussion as to how Australian content rules should or could be incorporated into a multichannel system, nor did it seek comments in relation to this.[68] In contrast, the Department of Communications, Information Technology and the Arts, in its “multichannelling review”, specifically sought comments on the “operation of Australian content requirements in a multichannel environment.”[69] The submissions it received varied. The only commercial broadcaster lobbying to provide a multichannel service, the Seven Network, argued that regulation of any new channels should be minimal, and that imposing Australian content quotas would “act as a disincentive...by creating financial and operational obligations that would not be sustainable in a start-up business.”[70] The Seven Network was of the opinion that only when multichannelling was established would it be appropriate to consider the imposition of Australian content quotas. On the other hand, the submissions from production companies and interest groups were resolutely in favour of maintaining Australian content quotas at current levels across all additional multichannels, relying on the argument that quotas are critical to a viable Australian production industry.[71]

The implications of digital television on broadcasting regulation, including the impact of multichannelling on the existence and content of quota obligations, raise many difficult questions; some possible solutions are discussed in Section IV below. However, at least in the short term, while the government maintains its existing policies on multichannelling, these questions remain more theoretical than real. In contrast, there is overwhelming evidence, described in the following sub-section, that internet-based delivery of audiovisual material, including traditional “television” content, has been dramatically increasing. As will be seen, the impact of broadband internet services on the traditional quid pro quo might be much greater, and much more disruptive, than that posed by digital television.

B Internet Television

Increased transmission speeds and improved compression technologies have greatly enhanced the capacity for audiovisual content to be delivered over the internet (sometimes called “IPTV”).[72] This, coupled with the ability to digitally record and store content on computer hard-drives, has signalled the rise of the “on-demand” revolution. In the past few years there has been a wave of newspaper articles predicting the “death of television” as we currently know it.[73] Numerous reports claim that viewers are increasingly turning to legal and illegal internet sites for their audiovisual content.

The rate at which computer users are downloading television shows in Australia is startling. According to British internet consultancy Envisional, Australia is the second largest market for pirated TV shows in the world, responsible for 15.5 per cent of illegal downloads in 2005.[74] Some estimates suggest that 75 per cent of worldwide internet traffic is occupied by the transfer of pirated TV shows and movies.[75] Within hours of broadcast in the US, many popular series, such as 24, CSI, Desperate Housewives, Six Feet Under and the West Wing are available on the internet for illegal download around the world.[76] By using peer-to-peer applications such as BitTorrent, users in Australia can copy their favourite programs to their computers many months before they are broadcast on local television. The on-demand “revolution”, however, is not just about the time-shifting of content. It is also about format shifting and place-shifting. Increasingly, mobile viewing devices have become popular. Most notable is the Apple iPod, which allows programs to be downloaded from the internet and transferred to the iPod for viewing at a time and place most convenient to users.[77]

Legitimate services are also becoming more prevalent, as traditional broadcasters, producers and distributors seek to carve out their own on-line presence. Disney, for example, recently decided to provide some of its biggest shows, such as Lost, Desperate Housewives and Alias, as free streamed video from the American Broadcasting Company’s website.[78] Alternatively, episodes of these shows have been made available through Apple’s iTunes Music Store.[79] While currently only available to US customers, it is predicted that this service will soon be available in Australia.[80] Other shows, such as the UK sitcom, The IT Crowd, have debuted on the internet,[81] and more people were reported to have viewed the recent Live 8 concert via the internet than on television.[82]

Movie studios have also begun selling movies and television shows directly to US customers over the internet through Movielink, a joint venture owned by five of the seven major Hollywood studios.[83] Recent movies such as Brokeback Mountain and King Kong, as well as some older titles, became available on the service earlier this year. Warner Bros has recently announced a similar plan to distribute television shows and movies using BitTorrent.[84] In Australia, the ABC, Nine and Seven each offer an internet video service. Ninemsn and Yahoo!7 provide a range of video clips, including some of their prime content. Both services have recorded a dramatic increase in the number of streams viewed each month.[85] Another service, Crank TV, has been set up by Austereo to provide streamed music videos on demand, [86] and Telstra’s BigPond internet service has launched an on-demand internet movie service in conjunction with Sony Pictures Television, with over 1000 titles on its catalogue.[87] Recently, the ABC announced that it will allow users to download content produced by the ABC to personal computers and other mobile devices.[88] It has also indicated that it will consider using file-sharing software, such as BitTorrent, to make the downloading of large files more manageable and expedient for consumers.

The use of the internet to transmit programming is likely to result in significant market changes for commercial broadcasters.[89] Most notable will be the fragmentation of audiences, in terms of audience numbers, time and place. The chief executive of AOL, the American internet service provider, recently remarked at an industry trade show that “[v]ideo consumption is exploding on-line and on-demand is going to be the dominant way to consume content”.[90] Inevitably, this consumption will draw viewers away from traditional free-to-air television,[91] with one media analyst suggesting that internet-delivered audiovisual content could reduce revenue growth of local television networks by as much as 20 per cent in the coming few years.[92] Some commentators even believe that the internet will ultimately spell the end for commercial free-to-air television delivered via the airwaves,[93] although opinions are sharply divided on this issue.

The convergent internet-based environment, like the fully-enabled digital television environment, poses difficult social and cultural challenges.[94] But, unlike digital television, the government cannot control the transmission and reception of internet-based audiovisual services in the same way that it can with terrestrial broadcasting. This arises from the inability to impose effective entry controls in the global internet environment, where there is also a far greater capacity for audiovisual material to be distributed across national borders.[95] Thus, in the fully digital and converged internet environment, “the current system of technology specific content regulation is unlikely to be appropriate, effective or sustainable in meeting the community’s social and cultural objectives”.[96] The question for the future, therefore, is how, in the absence of the traditional quid pro quo arrangement, to maintain and promote the production and distribution of acceptable levels of new Australian content?

IV SECURING THE FUTURE OF LOCAL CONTENT

The problem facing the future of Australian content is largely one of economics. If new broadcasting models lead to the fragmentation of free-to-air television audiences it may no longer be possible to rely on traditional revenue raising models to support the production of Australian content. Australia therefore needs to start seriously examining tangible ways to foster diversity and the creation of quality Australian content, goals that are currently promoted by media-specific broadcasting regulation. As noted by Simon Fitzpatrick, “the maintenance and promotion of cultural industries will require either alternative sources of funding or new ways to harness advertising money.”[97]

In terms of responding to new media technologies it has long been recognised that in Australia discussions have tended to focus on preserving the commercial security of the incumbent broadcasters, rather than examining broader cultural and social issues.[98] As noted by Elizabeth More in 1990:

“neither in Australia, nor internationally at large, has there been ample evidence of cultural concerns in political debates about the new media. Overall, our new media politics eschews cultural considerations in favour of matters of economics and structure.”[99]

To a large extent, this “policy paralysis” is evident in the media reform package outlined by the Australian government earlier this year, which focuses on “meeting the digital challenge” without looking at the broader cultural and social impact of structural changes to media outlets.[100] The proposal to allow some commercial multichannelling, for example, did not consider the question of how any extra channels would be regulated. This is despite the government’s own Convergence Review in 2000 highlighting the need for a more holistic approach to policy formation; it stated that the “industry development agenda and the cultural policy agenda are inseparable as cultural outcomes are supported through sustainable industry development”.[101]

This section considers the regulatory solutions that have been proposed to ensure the future of local content in the context of emerging digital media. Questioned is whether obligations imposed on the private sector will continued to have a role to play, or whether meeting public interest objectives might be better met by the state. Further considered is the option of developing a public service publisher, and how this and other proposed solutions would by limited by Australia’s commitment to a free-trade agreement with the United States.

A Private Obligations - Expenditure and Transmission Quotas

Some of the solutions that have been identified to overcome the regulatory difficulties emerging from a fully-enabled digital television environment seek to extend regulation. These include the modification of the current quota system, the regulation of the distribution of Australian content and, finally, the use of market mechanisms to achieve universal access to Australian content (including tradable regulatory obligations).[102] However, as discussed above, the internet-based distribution of content has the capacity to undermine the current system of private obligations imposed on a terrestrial market. It is reasonable to question therefore whether the use of private obligations alone will be a suitable policy tool to regulate broadcasting. Furthermore, the degrees to which Australia can impose private positive obligations in the future have been limited by a recent commitment to a free-trade agreement with the United States – the AUSFTA.[103]

Under Article 10 of the AUSFTA, Australia must treat US companies, goods and services no less favourably than those from Australia, otherwise known as the “national treatment” principle.[104] The imposition of content quotas or expenditure requirements would prima facie offend this aspect of the agreement. However, Australia also negotiated certain exceptions to this article, including the ability for Australia to ensure the continued provision of Australian content in the audiovisual and cultural sectors,[105] for instance through imposing content quotas on television. Thus, Australia can maintain the existing quotas imposed on commercial broadcasters, but may not exceed the current requirement of 55 per cent of programming.[106] In relation to multichannel free-to-air broadcasting, however, Australia cannot impose content obligations on more than two additional multichannels. In practical terms, depending on the number of channels broadcast by an operator, this means that at least some channels would have to be quota free.[107]

Proposals to extend private obligations to emerging platforms have been discussed internationally, but less so in Australia.[108] It is unclear, however, whether content quotas or expenditure obligations would be a workable regulatory solution if applied to the internet environment. While internet regulation has been widely talked about in terms of preventing the transmission of undesirable content (including negative obligations),[109] very little discussion has focused on the possibility of imposing positive obligations on internet content providers (except in the context of internet service providers providing filtering software for its customers to block out specific types of content). Certainly, requiring content providers to create or host Australian content, or to provide hyper-links to such content, has not been the subject of rigorous discussion in Australia.[110] In practical terms, of course, almost anything can be legislated for at the domestic level, but many issues arise, including on whom such obligations should (and could) be imposed. Two obvious targets of regulation are those hosting content (internet content hosts, or ICHs) and internet service providers (ISPs).

One option is for Australian websites (or their hosts) that make available a specified amount of audiovisual content to have imposed on them certain Australian content requirements, either in terms of the percentage of content hosted, or by requiring the prominent display of any Australian content hosted on local sites.[111] The problem with this solution, however, is that it attempts to impose some of the burdens of the traditional quid pro quo, but without providing any of the necessary benefits – for example, protection against audience fragmentation by limiting the number of distribution channels. Thus, the potential funding problem of Australian content will persist. Local internet content hosts will simply refuse to host audiovisual content or, alternatively, the quality of the hosted Australian content will be poor, in addition to there being no guarantee under such a scheme that new content will be created and distributed. It is doubtful, therefore, that any system to promote the production and distribution of Australian content which relies on private quota obligations will be workable in the future.

Alternatively, expenditure requirements could be imposed on ISPs, similar to the way in which subscription broadcasters in Australia are required to allocate 10 per cent of their program expenditure to the production of Australian content.[112] This proposal has been considered in Canada by the Canadian Radio-Television and Telecommunications Commission (CRTC).[113] The CRTC put forward a proposal that Canadian ISPs be subject to certain content obligations, including a requirement that the ISPs contribute a portion of their annual revenue to a Canadian content production fund. This type of scheme has already been adopted by the subscription sector in Canada. The satellite and cable industries contribute to the Canadian Television Fund (“CTF”), which supports the production of new Canadian content, especially drama, documentary, children’s and youth oriented programming.[114] The CTF is also co-funded by the Canadian government, with an annual budget of approximately $250 million.[115]

The obligations that can be imposed on internet services to ensure adequate levels of Australian content, however, are limited by the AUSFTA. In relation to “interactive audio and/or video services”, which would appear to include audiovisual services provided over the internet,[116] Australia is permitted to adopt measures to ensure that access to Australian programming is “not unreasonably denied” to Australian consumers.[117] However, such measures can only be adopted where it is first found by the Australian government that Australian audiovisual content is not “readily available”, which seems to be high threshold to meet.[118] It would appear that even if a small amount of “readily available” content existed then Australian would be precluded from adopting any regulatory measures in relation to the internet. Furthermore, it would seem that content from other platforms, such as terrestrial, cable and satellite television, would appear to be taken into consideration in determining the availability of content for this purpose.

B Public Intervention

Given that private obligations might not be viable in the future and that their implementation might offend the AUSFTA, it is likely that the future of Australian content will need to rely on some form of public intervention.[119] This could be via, for instance, an expanded role for the national broadcasters, and/or the replacement of quotas with public subsidies and grants. Others have raised the need to redefine the relationship between the commercial and national broadcasters and public funding bodies regarding the creation of Australian content, with a view to exploiting material across multiple platforms.[120]

Of course, demands for greater public funding of local audiovisual content production have long been made[121] and, at least from a political and practical perspective, issues arise in relation to whether additional funding for the local production industry would be granted. Considering the lack of funding given to our national broadcasters, especially compared to similar organisations in the UK and other Europe countries, it is doubtful that this would be a short-term political reality.[122]

Funding, however, is only part of the solution. There is also a need, assuming that in the future most content will be sourced online, to ensure that Australian content is both accessible to audiences and sufficiently promoted. While empirical studies have consistently shown that domestic is more popular than foreign programming on traditional broadcast television where there are limited output channels,[123] it is not clear that this will also be true in the online environment. There are two related reasons for this. First, choice on the internet is technically unlimited. Unlike conventional broadcast television, there are not only five or twenty-five channels to select from, but millions, perhaps billions, of links to a variety of material. With this breadth of content available, it is not clear that Australian content is as attractive to consumers as it currently is on terrestrial television. Second, compared to the analogue world, it is difficult to quickly discern quality or desired material from the mass of information that is online. Therefore, distinguishing and promoting Australian content may be almost as important as finding ways to financially support its production. In relation to this, trust is an important factor in the online environment (ie consumers want to know where to find content and services which are of particular quality and which are closely tailored to their tastes), meaning that branding has an all important role to play.

One option is for the promotion and accessible distribution of content to be undertaken by a public service publisher (PSP). Such a proposal has been explored in the UK by the industry regulator, Ofcom, as a solution to the future of public service broadcasting in the digital age. It was recommended in the UK that a PSP be established using public funds to both commission and to distribute content as widely as possible on all forms of media, including on digital television, broadband, and mobile networks. It was also envisaged that the PSP would ensure that content was effectively promoted and branded, and that it was easily accessible.[124] Building a recognisable brand for Australian content and promoting access to content through an Australian PSP website could help to ensure the future survival of Australian content in the new media age.

Of course, if an Australian PSP were to be established, some of the following questions would need to be answered:

• Would the PSP role be undertaken by a current government funded body, such as the Film Finance Corporation (FFC), Australian Film Commission (AFC) or the ABC, or would it be better to create a new body?
• Could the PSP be undertaken by a private company?
• Would an Australian PSP commission Australian productions, or just publish and promote them?
• How would an Australian PSP be funded? How much would it cost?
• Would the PSP distribute content free of charge, could it be partly advertiser supported, or could it be provided on a subscription or pay-per-view basis?
• Are the answers to these questions impacted by the AUSFTA?

This final question is particularly important as it will determine how some of the other questions could be answered. A PSP funded and operated entirely by the state would appear to be permitted under the AUSFTA as a public service,[125] but not if it were operated on a commercial basis in competition with other service suppliers.[126] As Jock Given suggests, it would need a different funding basis from existing commercial services;[127] that is, one not predominantly relying on advertising or subscription revenue. So, to the extent that an Australian PSP would compete with other media outlets or would engage in commercial activities, any requirement that it provide and promote exclusively Australian content would offend the AUSFTA.

More complex issues would arise if an Australian PSP was operated by a private company on a commercial basis supported by subsidies and grants, or through public investment. Under Chapter 11 of the agreement (relating to investment), subsidies and grants can be maintained provided their receipt is not subject to “performance requirements”, such as a requirement to “achieve a given level or percentage of local content.” [128] This means that under the agreement a privately operated PSP could not be supplemented or supported with government funding. This restriction, however, will not apply where subsidies and grants are provided by way of investment.[129] This means that a PSP could be funded in a similar fashion to the existing funding schemes adopted by the AFC and the FFC, where funding is in the form of investment in the intellectual property rights of a given production.[130]

Consequently, as this section demonstrates, the options for developing a PSP for the production and/or distribution of Australian content could be high shaped by Australia’s bi-lateral obligations to the United States.

V CONCLUSION

As discussed, the efficacy of government regulation that mandates the production and distribution of Australian content on Australian television is under threat from new technologies and new modes of distributing content. This threat warrants a direct policy response from government. It is argued that, in the new media environment, the cultural and social objectives of creating and promoting Australian content will requires a new ways of distributing, branding and promoting Australian productions. This may be through a PSP, or it could be through some other means. What is clear, is that Australia cannot afford to look at sweeping media reforms, especially those which appear to strengthen the privileged positions of Australia’s incumbent media outlets, without also thinking about how cultural and social objectives can be achieved into the future.

[∗] B.A., LL.B(Hons), Research Fellow, Centre for Media and Communications Law (CMCL), University of Melbourne. An earlier version of this paper was presented at the Australian and New Zealand Communication Association’s Annual Conference (Adelaide University, Adelaide, 3-7 July 2006). Special thanks to the following colleagues in the Law School at the University of Melbourne for helpful discussion, advice and encouragement with the writing of this paper: Emily Hudson, Andrew Kenyon, Sophie Killen and Robin Wright. Thanks also to the Australian Research Council for providing financial support (CI Kenyon, ‘The Future of Television: Australian Legal Protection of Digital Broadcast Content’, DP0559783).

[1] Productivity Commission, Broadcasting Inquiry Report, Report No 11 (2000) 381.

[2] See Terry Flew, ‘Images of Nation: Economic and Cultural Aspects of Australian Content Regulations for Commercial Television’ in Jennifer Craik, Julie Bailey and Albert Moran (eds), Public Voices, Private Interests: Australia’s Media Policy (1995) 73, 75.

[3] Productivity Commission, above n 1, 388.

[4] See Flew, above n 2, for an outline of the arguments that are made for and against Australian content quotas.
[5] See Productivity Commission, above n 1, 384. An argument that the quotas support an Australian production industry is stronger since the High Court decision in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28, where the ‘creative elements’ tests was preferred to the ‘look and feel’ test. Under the creative elements test a production will qualify as ‘Australian’ if the ‘participants, creators or producers of the program are Australian’: Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28 23.
[6] ‘Digital television’ is used in this paper to refer to digital terrestrial television broadcasting, unless otherwise noted.

[7] For recent commentary in the context of digital television and content protection, see Andrew T Kenyon and Robin Wright, ‘Television as Something Special? Content Control Technologies and Free-to-air Television’ (2006) 30 Melbourne University Law Review (forthcoming).
[8] See generally Harvey B. Feigenbaum, The Effects of New Technologies on Cultural Protectionism (Occasional Paper Series, The GW Center for the Study of Globalization, 2002) 3; Ben Goldsmith, Julian Thomas, Tom O’Regan and Stuart Cunningham, The Future for Local Content? Options for Emerging Technologies (2001) available at <http://www.aba.gov.au/newspubs/radio_TV/documents_research/Future_local_Cont.pdf> .

[9] Note that this justification has a long history of critics, most notably from an economic perspective by Ronald Coase: see Ronald Coase, ‘The Federal Communications Commission’ (1959) 2 Journal of Law and Economics 1.
[10] Of course, from an economic perspective, such a market failure will only develop where public interest goals would not be achieved under ordinary market forces: See generally Allan Brown and Martin Cave, ‘The Economics of Television Regulation: A Survey with Application to Australia’ (1992) 68 Economic Record 377, 379; Thomas Gibbons, ‘De/Re-Regulating the System: The British Experience’ in Jeanette Steemers (ed), Changing Channels: The Prospects for Television in a Digital World (1998) 73, 80-81.

[11] Productivity Commission, above n 1, 383; see also D R Hay, Economic Theory and Local Content Quotas for Television (Screen Producers and Directors Association, 2000) 11-15, available at <http://www.spada.co.nz/documents/Rsrch_EcTheory.pdf> [12] The cost of purchasing the broadcasting rights to American programming is usually between a third and a tenth of the cost of local programming. This is due to the fact that the production costs for American programming can be recouped by selling the rights to the production over three or more distinct markets: the various domestic broadcasting networks, domestic local channels (‘reruns’) and to international broadcasters. Because of this, the cost per unit for broadcasters (broadcasting license fee) is considerably reduced: see Feigenbaum, above n 8, 2. This price differential means that Australian content becomes, in economic terms, a ‘merit good’, that is, a good or a product which confers long-term social benefits but for which nobody is willing to pay. For a discussion of public service broadcasting as a merit good, see Richard Collins, ‘Public Service Broadcasting: Too Much of a Good Thing?’ in Damian Tambini and Jamie Cowling (eds), From Public Service Broadcasting to Public Service Communications (2004) 130, 131.

[13] Productivity Commission, above n 1, 383.

[14] This relationship is a product of historical bargains that were made when broadcasting was commenced in Australia. The conservative Menzies’ government sought to achieve political allegiances with the existing conservative media players by allocating the commercial licences to the traditional print media interests. Rewarding commercial players with broadcasting licences in exchange for political compliance set the scene for the future of media regulation in Australia: see Terry Flew, ‘Television and Pay TV’ in Stuart Cunningham and Graeme Turner (eds), The Media and Communications in Australia (2002) 173, 174; Terry Flew, ‘Broadcasting and the Social Contract’ in Marc Raboy (ed), Global Media Policy in the New Millenium (2002) 113, 115; Cameron Hazlehurst, ‘The Advent of Commercial Television’ (1982/3) Australian Cultural History 104, 114.
[15] See Australian Broadcasting Corporation Act 1983 (Cth), s 6; Special Broadcasting Service Act 1991 (Cth), s 6; see, also, Butler and Rodrick, above n 18, 490-492.

[16] Broadcasting Services (Australian Content) Standards 2005, s 9.

[17] See Broadcasting Services (Australian Content) Standards 2005.

[18] This requirement is imposed as a licence condition under the Broadcasting Services Act 1992 (Cth), Pt 7, Div 2A; see Des Butler and Sharon Rodrick, Australian Media Law (2nd ed, 2004) 532-534.

[19] For a discussion of public service broadcasting as a merit good, see Collins, above n 12, 131. For a discussion of Australian content as a ‘merit good’, see Brown and Cave, above n 10, 379.

[20] See similar comments by UK regulator with regard to ‘public service broadcasting’: Ofcom, Review of Public Service Broadcasting: Phase 2 – Meeting the Digital Challenge (2004) 3 available at <www.ofcom.org.uk>.
[21] See Allan Brown, ‘The Digital Future of Terrestrial Advertiser-Supported Television’ (2003) 21(1) Prometheus 41, 42; see also proponents of traditional welfare economics, who have long made the argument that an increase in the number of channels is welfare enhancing: Peter Steiner, ‘Program Patterns and Preference and the Workability of Competition in Radio Broadcasting’ (1952) 66(2) Quarterly Journal of Economics 194; Michael Spence and Bruce Owen, ‘Television Programming, Monopolistic Competition, and Welfare’ (1977) 91(1) Quarterly Journal of Economics 103.

[22] See Niall Duffy, Jonathan Davis and Adam Daum, ‘The Economics of Digital Television’ in Jeanette Steemers (ed), Changing Channels: The Prospects of Television in a Digital World (1998) 37, 39-41. See also Ben Goldsmith, Julian Thomas, Tom O’Regan and Stuart Cunningham, ‘Asserting Cultural and Social Regulatory Principles in Converging Media Systems’ in Marc Raboy (ed), Global Media Policy in the New Millenium (2002) 95; Flew, above n 14, 123.

[23] For a discussion of this in the context of public service broadcasting obligation imposed on UK broadcasters, see James Cowling, ‘From Princes to Paupers: The Future for Advertising-funded Public Service Television’ in Damian Tambini and Jamie Cowling, From Public Service Broadcasting to Public Service Communications (2004) 61.
[24] See generally Leslie Hitchens, ‘Digital Television Broadcasting – an Australian Approach’ [2001] Entertainment Law Review 112.

[25] See Brown, above n 21, 41.

[26] Jock Given, ‘Being Digital: Australia’s Television Choice’ (1998) 3(1) Media and Arts Law Review 38, 39.

[27] Ibid 42.
[28] Brown, above n 21, 42.

[29] Economic modeling as well as empirical evidence has shown that an increase in the supply of channels in a market only marginally raises the demand for programming in terms of aggregate audience numbers and average audience viewing times: see Brown, above n 21, 45; see, also, Price Waterhouse Coopers, Economic Analysis of the TV Advertising Market (2004) 3, available at http://www.ofcom.org.uk/research/tv/reports/tvadvmarket.pdf; Robert G Picard, ‘Expansion and Limits in EU Television Markets: Audience, Advertising and Competition Issues’ (Turku School of Economics and Business Administration, Discussion Paper C2/2001); Bureau of Transport and Communications Economics (BTCE), Impacts of Additional Commercial Broadcasting Services in Existing Markets (Working Paper 36, February 1998). Cf. Allen Consulting Group, The Removal of Restrictions on Digital Multichannelling by Commercial Television Broadcasters: Potential Economic Impacts (September 2004), available at <http://www.dcita.gov.au/media_broadcasting/policy_and_legislation/digital_broadcasting_policy_reviews/digital_tv_regulatory_framework_reports> .
[30] See Brown, above n 21, 42; see also Price Waterhouse Coopers, above n 29.
[31] See Brown, above n 21, 50. Note, the increase in production costs will depend on whether there is a heavy reliance on the repeat use or re-purposing of content, and the extent to which incumbent broadcasters can rely on the economic benefits of vertical integration and economies of scale to keep down their production costs.
[32] Broadcasting Services Act 1992 (Cth), s 3(1)(f).

[33] Hitchens, above n 24, 115.
[34] Television Broadcast Services (Digital Conversion) Act 1998 (Cth), which amended the Broadcasting Services Act 1992 (Cth). Further legislation was passed following a number of reviews: Broadcasting Services Amendment (Digital Television and Datacasting) Act 2000 (Cth).

[35] Broadcasting Services Act 1992 (Cth), Sch 2, cl 7(1)(m).

[36] Broadcasting Services Act 1992 (Cth), Sch 4, cll 5A and 35(3).

[37] Jock Given, Turning Off the Television (2003) 153-155.

[38] Ibid 178.

[39] Ibid.

[40] See especially Given, above n 37, chapter 8.

[41] Broadcasting Services Act 1992 (Cth), Sch 2, cl 7(1)(m) (commercial) and Sch 4, Pt 3, cl 35(1) (national) as amended by the Television Broadcasting Services (Digital Conversion) Act 1998 (Cth).

[42] Broadcasting Services Amendment (Digital Television and Datacasting) Act 2000 (Cth), which introduced a limited right for national broadcasters to offer an additional SDTV digital service. See, also, Given, above n 37, 178-180, where he states (at 178): “The government wanted to treat the ABC and the SBS like the commercial networks on this issue. Parliament, however had other ideas. The Australian Democrats and Labor supported multi-channelling by the national broadcasters, unrestricted except by their statutory charters.”

[43] Programs which deal with regional matters, religion, the arts, culture or history, or are directed at children are permissible. News bulletins are prohibited unless presented in a foreign language or focus on regional affairs. The ‘occasional stand alone drama’ is also permitted: see Broadcasting Service Act 1992 (Cth), Sch 4, clause 5A.

[44] See Broadcasting Services Act 1992 (Cth), Sch 4, Part 4, Div 2 (HDTV quota standards).

[45] Given, above n 37, 164.

[46] Hitchens, above n 24.

[47] See Hernan Galperin, New Television, Old Politics: The Transition to Digital TV in the United States and Britain (2004) 165; Given, above n 26, 38, 46-47.

[48] The three-and-a-half multiplexes were originally awarded to British Digital Broadcasting in June 1997, which started a subscription terrestrial service called ONdigital. Unable to compete with BSkyB, however, in 2002 ONdigital (by that time rebranded to ITV Digital) went into receivership. Freeview, a consortium owned by BBC (20 per cent equity), National Grid and Wireless, British Sky Broadcasting Limited, ITV plc and Channel 4 launched in October 2003: see generally, Peter Goodwin, ‘Never Mind the Policy, Feel the Growth’ in (eds) Allan Brown and Robert G Picard, Digital Terrestrial Broadcasting in Europe (2005) 151; Jérôme Adda and Marco Ottaviani, ‘The Transition to Digital Television’ (2005) Economic Policy 159, 177; British Broadcasting Corporation, Annual Report and Accounts 2005/2006, 122 available at <http://www.bbcgovernors.co.uk/annreport/index.html> .

[49] BBC One and BBC Two, ITV 1, Channel 4 and Channel 5.

[50] BBC Three and BBC Four, ITV 2, ITV 3 and ITV 4, and ITV play.

[51] Sky News, Sky Sports News and Sky Three. For the full line up of channels visit the following website: <http://www.freeview.co.uk/channels/channellineup.pdf> .
[52] Ofcom, The Communications Market 2005 (2005) 181. This trend has continued up to the date of publication: see Ofcom, The Communications Market: Digital Progress Report Q1 2006 (2006) 6.

[53] Ofcom, The Communications Market: Digital Progress Report Q1 2006 (2006) 8. Digital satellite made up the greatest share of digital television, at 33 per cent of households, followed by digital terrestrial television at 28 per cent of households.

[54] Approximately 13 per cent have adopted terrestrial digital, while a further 12.8 per cent have subscribed to a digital subscription service: see Australian Communications and Media Authority, Digital Media in Australian Homes (2005) 20.

[55] See Flew, above n 14, 114-115.

[56] The latest Annual Report from the BBC indicates that its income from licence fees alone amounted to £2,940m in the 2005 financial year, compared to the ABC’s 2005 government appropriation of £247m: see British Broadcasting Corporation, Annual Report and Accounts 2005/2006, 104 available at <http://www.bbcgovernors.co.uk/annreport/index.html> Australian Broadcasting Corporation, Annual Report 2005, 153 available at <http://www.abc.net.au/corp/annual_reports/ar05/> .

[57] Freeview has been described as “BBC dominated”: see Collins, above n 12, 131. See also Network Ten Pty Ltd, Submission to the House of Representatives Standing Committee on Communications, Information Technology and the Arts: Inquiry into the Uptake of Digital Television (May 2005) 3, available at <http://www.aph.gov.au/house/committee/cita/digitaltv/subs/sub60.pdf> . The BBC has shown extraordinary enthusiasm and foresight regarding digital television in the UK: see generally Georgina Born, Uncertain Vision: Birt, Dyke and the Reinvention of the BBC (2005) 486-497.

[58] This conclusion, of course, is dependent a number of assumptions, namely, that the relative production costs are the same in each market and that multichannel advertising will substitute traditional television advertising rather than work to increase the overall level of television advertising revue. For an economic analysis of the multichannel advertising market in the UK, see Price Waterhouse Coopers, above n 29. The aggregate television advertising revenue in 2003 in UK was £3,160m (at the time of writing, AU$5,246m) compared to approximately AU$2,700m in Australia: see Price Waterhouse Coopers, above n 29; Australian Film Commission, Australia’s Audiovisual Markets: Key Statistics on Australia’s Cinema, Video, Television and Interactive Media Markets (2004, 1st edition) 48, available at <http://www.afc.gov.au/gtp/pdfs/markets_front.pdf#search=%22%22Australia's%20audiovisual%20markets%22%22> . Cf, however, Carlos Grande, ‘Cost of TV advertising lowest for 10 years: Digital channels are winning audiences but lacking pricing power with advertisers’, Financial Times (London), 25 August 2006, 3, where it is claimed that the average cost of television advertising has fallen due to the supply of advertising space surpassing advertiser demand.
[59] See Chris Atkins, Patrick van Ginhoven, Sameer Chopra and Mark Hughes, ‘Perspectives on Possible Future Industry Structure’ (conference presentation by Chris Atkins, Network Insight Institute Conference, Sydney, 12 April 2006), slides to presentation available at http://www.networkinsight.org/verve/_resources/NII_Atkins_12April06.pdf. This study suggests that a new player in the free-to-air television sector would reduce the average profit margin for each broadcaster from approximately 17 per cent to 2 per cent. Note, however, that this analysis is based on the introduction of an entirely new player, not simply a new channel by an existing player. Thus, many of the sunk costs associated with the establishment of a new player would not be incurred with commercial multichannelling, and many of the operating fixed costs could be shared between the various channels of the existing broadcaster. Consequently, on existing economic analyses, it is difficult to predict with certainty the capacity of the market to support at least some multichannelling.
[60] Australian Government, Meeting the Digital Challenge: Reforming Australia’s Media in the Digital Age (March 2006) available at <http://www.dcita.gov.au/broad/media_reform_options> .
[61] Ibid.
[62] Ibid 10.

[63] Ibid.
[64] Helen Coonan, ‘New Media Framework for Australia’ (13 July 2006) available at <http://www.minister.dcita.gov.au/media/media_releases/new_media_framework_for_australia> [65] Broadcasting Legislation Amendment (Digital Television) Act 2006 (Cth).
[66] See House of Representatives Standing Committee on Communications, Information Technology and the Arts, Digital Television: Who’s Buying it? Inquiry into the Uptake of Digital Television in Australia (2006) 122, available at <http://www.aph.gov.au/house/committee/cita/digitaltv/report.htm> Productivity Commission, above n 1, 259; Australian Competition and Consumer Commission, Emerging Market Structures in the Communications Sector (2003), 63-76 available at <http://www.accc.gov.au/content/index.phtml/itemId/324108> . For an earlier policy document on multichannelling, see: Department of Communications, Information Technology and the Arts, Provision of Services other than Simulcasting by Free-to-air Broadcasters on Digital Spectrum: Issues Paper (May 2004) available at <http://www.dcita.gov.au/__data/assets/pdf_file/11038/Digital_Broadcasting_Review_Discussion_Paper.pdf> .

[67] House of Representatives Standing Committee on Communications, Information Technology and the Arts, above n 66, 122.
[68] See, House of Representatives Standing Committee on Communications, Information Technology and the Arts, Inquiry into the Uptake of Digital Television: Background Discussion Paper (2005), available at <http://www.aph.gov.au/house/committee/cita/digitaltv/infopaper.pdf> .

[69] Department of Communications, Information Technology and the Arts, above n 66, 14.

[70] Seven Network Limited, Submission to the Department of Communications, Information Technology and the Arts Review of the Provision of Services other than Simulcasting on Free to Air Digital Spectrum (2004) 32, available at <http://www.dcita.gov.au/__data/assets/pdf_file/13191/Seven_Network_Ltd.pdf> .
[71] See especially Media Entertainment and Arts Alliance, Submission to the Department of Communications, Information Technology and the Arts Review of the Provision of Services other than Simulcasting on Free to Air Digital Spectrum (2004) 8, available at <http://www.dcita.gov.au/__data/assets/word_doc/11033/Media_Entertainment_and_Arts_Alliance.doc> Screen Producers Association of Australia, Submission to the Department of Communications, Information Technology and the Arts Review of the Provision of Services other than Simulcasting on Free to Air Digital Spectrum (2004), available at <http://www.dcita.gov.au/__data/assets/word_doc/13190/Screen_Producers_Association_of_Australia.doc> Australian Film Commission, Submission to the Department of Communications, Information Technology and the Arts Review of the Provision of Services other than Simulcasting on Free to Air Digital Spectrum (2004), available at <http://www.dcita.gov.au/__data/assets/pdf_file/16028/Australian_Film_Commission.pdf> .
[72] While IPTV traditionally refers to the transmission of audio-visual content directly to television set top boxes over the internet via a closed subscription system, it is increasingly being used to describe any form of programming delivered via the internet, including delivery to personal computers.

[73] See eg, Peter Weekes, ’50 years on – is technology killing television?’, The Age (Melbourne), 12 February 2006, 7; Michelle Griffin, ‘Why these people are turning us into a national of pirates?, Sunday Age (Melbourne) 12 February 2006, 3; Jane Schulze, ‘Internet Threat Puts Pay on Notice’ The Australian (Sydney), 27 April 2006, 17; Mark Pesce, ‘Future for TV Networks Lies in the Past’ The Age Online (19 February 2006) available at <http://www.theage.com.au/news/opinion/future-for-tv-networks-lies-in-the-past/2006/02/18/1140151850830.html> John Davidson, ‘Look who’s stealing the show: first it was music, not it’s television’, The Weekend Australian Financial Review (Sydney) 14-15 January 2006, Perspective 17; Michael Idato, ‘Internet’s Power Play’, Sydney Morning Herald Online (17 April 2006) available at <http://www.smh.com.au/news/technology/internets-power-haunts-networks/2006/04/15/1144521541371.html> .

[74] Michelle Griffin, ‘TV Shows Hit By Australian Pirates Then Put on the Net’, The Sun-Herald (Sydney), 12 February 2006, 9; Rania Ghandour, ‘We Lead World in Television Piracy’, The West Australian (Perth), 25 February 2006. 50.
[75] Davidson, above n 73.
[76] Ibid.

[77] Weekes, above n 73. Internet ‘broadcatching’ is also becoming increasingly popular. This refers to the automatic downloading of programs specified by the users to the user’s home computer as they become available on the internet. Other internet services provide streamed rather than downloadable content. This is usually where terrestrial digital broadcasters are captured and subsequently retransmitted over the internet in near to real time. Site such as BeeLine TV, for example, offer “free on-line television channels from around the world”, including services such as BBC News 24 and other popular channels: see <http://beelinetv.com/> .

[78] Idato, above n 73.
[79] Pesce, above n 73.
[80] Ibid. Google Video has also started selling popular programs online. Before such as service is available in Australia, however, internet providers much negotiate broadcasting rights which are owned by the local networks: see Louisa Hearn, ‘Internet Tackles TV’, Sydney Morning Herald Online (Sydney), 28 January 2006, available at <http://www.smh.com.au/news/broadband/internet-tackles-tv/2006/01/26/1138066899380.html> .
[81] Louisa Hearn, ‘Geek Sitcom to Debut on Web’, Sydney Morning Herald Online, (Sydney), 18 January 2006, available at <http://www.smh.com.au/articles/2006/01/18/1137467026014.html?from=rss> .

[82] Daniel Ziffer, ‘Net’s big thing’, The Age (Melbourne), 20 October 2005, The Green Guide, 8; ‘Forget the TV screen’, The Age, (Melbourne), 6 April 2006, 6.

[83] Movielink is jointly owned by Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Meyer-Goldwyn-Mayer (before it was acquired by Sony Pictures Entertainment): see Gary Gentile, ‘Coming Soon to a Website Near You...’ The Age Online (Melbourne), 4 April 2006, available at <http://www.theage.com.au/articles/2006/04/03/1143916464399.html> Movielink website at <http://movielink.com> .

[84] Garry Barker, ‘Staunching a Tide of Piracy’ The Age (Melbourne), 18 May 2006, 11.
[85] Paul McIntyre, ‘Games Showed us the Future, and it’s Hybrid TV’, Sydney Morning Herald (Sydney), 30 March 2006, 27.
[86] Jeni Porter, ‘Crank Up That Net: Music TV Channel on the Way’, The Age (Melbourne), 21 December 2005, 5.

[87] http://bigpondmovies.com/. More recently, Telstra, the Australian telecommunications company, has indicated its intention to enter the subscription television market by offering a web-based service from 2008: see Schulze, above n 73, 17.
[88] Adam Turner, ‘ABC puts vodcasting to the test’, The Age (Melbourne), 22 August 2006, 3.

[89] Ofcom, Ofcom Review of Public Service Television Broadcasting: Phase 1 – Is Television Special (2004) 8, available at <www.ofcom.org.uk/consult/condocs/psb/psb/psb.pdf>.

[90] ‘On-line TV an on-demand revolution’, The Australian (Sydney), 11 April 2006, 3.

[91] Simon Fitzpatrick, ‘Protecting Australian Culture in the 21st Century: Television Content Regulation in a Globalising World’ (2000) 5(4) Media and Arts Law Review 224, 238.

[92] Davidson, above n 75. Trends in advertising expenditure show that the internet is capturing a greater share of the market in Australia: see Lara Sinclair, ‘Internet Takes Big Slice of Ad Sales Pie’ The Australian (Sydney), 10 August 2006, Media 15; Lara Sinclair, ‘Internet Boom Picks Up Ad Slack’ The Australian (Sydney), 6 April 2006, 13 (which reported that internet advertising accounted for 6.1 per cent of expenditure in 1005, while television advertising experience lower than average growth).

[93] Weekes, above n 73; Tom Burton, ‘Get ready for this’, Sydney Morning Herald (Sydney), 18 March 2006, 27; Idato, above n 78; Ziffer, above n 82.

[94] Goldsmith, above n 8, 17; Christina Slade, ‘The Public/Private Divide: Regulating the Media’ (1997) 84 Media International Australia 102; Marett Leiboff, ‘A Report on the Conference: Convergence, Culture and Policy in the Digital Age? Australian Key Centre for Culture and Policy, Brisbane, 18-20 November 1998’ (1999) 4(1) Media and Arts Law Review 50; A Phoon, ‘Dangers for Film, TV in Trade “Breakthrough”’ (1992) Communications Update 16.
[95] For a general overview of digital content control options, see Andrew T Kenyon and Jonathan Liberman, Controlling Cross-Border Tobacco:Advertising, Promotion and Sponsorship – Implementing the FCTC (2006); Department of Communications, Information Technology and the Arts, Review of the Regulation of Content Delivered over Convergent Devices (April 2006), available at <http://www.dcita.gov.au/broad/policy_reviews/review_of_the_regulation_of_content_delivered_over_convergent_devices> Ofcom, Online Protection: A Survey of Consumer, Industry and Regulatory Mechanisms and Systems (June 2006) <http://www.ofcom.org.uk/research/technology/onlineprotection/> .
[96] Productivity Commission, above n 1, 379.

[97] Fitzpatrick, above n 91, 240.

[98] Elizabeth More, ‘TV 2000 – Summation’ in Elizabeth More (ed) TV 2000: Choices and Challenges (1990) 126.

[99] Ibid, 129.

[100] Stuart Cunningham has been critical of the government’s reform options, stating that what is missing is a “policy framework to secure a future for Australian content in the context of a genuine interest in linking broadcasting to digital innovation...” He argues that what Australia needs is real competition for commercial broadcasters and real funding for local content: see Stuart Cunningham, ‘Local content lost in policy’, The Courier Mail (Brisbane) 16 March 2006, 28.

[101] Australian Government, Convergence Review (2000) 96.

[102] See Goldsmith, Thomas, O’Regan and Cunningham, above n 8, 2001; Goldsmith, Thomas, O’Regan and Cunningham, above n 22, 2002; Australian Broadcasting Authority, Trading the Regulatory Obligations of Broadcasters (2003).

[103] Australia-United States Free Trade Agreement (‘AUSFTA’), 18 May 2004, Australia-United States (entered into force 1 January 2005).
[104] AUSFTA, art 10.2.
[105] AUSFTA, Annex II.

[106] Annex I.

[107] Jock Given, ‘‘Not Unreasonably Denied: Australian Content After AUSFTA’ (2004) 111 Media International Australia 8, 11.

[108] But for a brief Australian discussion, see Australian Film Commission, Flexible Vision: A Snapshot of Emerging Audiovisual Technologies and Services, and Options for Supporting Australian Content (1st ed, 2003), 5-9.

[109] Australia, for example, has a co-regulatory ‘take down notice’ scheme under Schedule 5 of the Broadcasting Services Act 1992 (Cth). See also responsibilities in relation to child pornography: Criminal Code Act 1995 (Cth), Anti-spam legislation has also been introduced: Spam Act 2003 (Cth); see also Kenyon and Liberman, above n 95.

[110] The only discussion has been by the Australian Film Commission, above n 108.
[111] Ibid 6.

[112] Ibid.
[113] Canadian Radio-television and Telecommunications Commission, Telecom Public Notice CRTC 99-14, Broadcasting Public Notice 1999-84 available at <http://www.crtc.gc.ca/archive/eng/Notices/1999/..\..\Notices\1999\PB99-84.htm> .
[114] See Canadian Television Fund at <http://www.canadiantelevisionfund.ca> .
[115] Ibid. At the time of writing, AU$293m.

[116] Given, above n 107, 12.

[117] AUSFTA, Annex II.
[118] Ibid. In addition, such measures must be “implemented through a transparent process permitting participation by any affected parties, be based on objective criteria, be the minimum necessary, be no more trade restrictive than necessary, not be unreasonably burdensome, and be applied only to a service provided by an enterprise that carries on business activities in Australia in relation to the supply of that service”: see AUSFTA, Annex II.

[119] For this in the context of local UK content, see Ofcom, Ofcom Review of Public Service Television Broadcasting: Phase 2 – Meeting the Digital Challenge (2004) 56.

[120] Kim Dalton, ‘Frequencies, Channels, Formats, Genres’ (Speech delivered at the Network Insight Seminar, Sydney, 12 April 2006).

[121] Fitzpatrick, above n 91, 238-241; Australian Film Commission, above n 108, 5.

[122] For a comparison of the funding given to the ABC in Australia and the BBC in the UK, see note above n 56.

[123] Anne Britton, ‘True Blue Takes on Blue Sky’ (1997) 83 Media International Australia 41; Fitzpatrick, above n 91, 237.

[124] Ofcom, above n 119, 81.

[125] This service would be considered a “service supplied in the exercise of government authority within the territory” of Australia, which is excluded from the national treatment requirement of Chapter 10: AUSFTA, art 10.1.4(e).

[126] AUSFTA, art 10.1.4(e); art 1.2.22.

[127] See Given, above n 107, 14.

[128] Article 11.9.2 of the AUSFTA states that “neither party may condition the receipt or conditioned receipt of an advantage, in connection with ...an investment in its territory...any requirement to: