The media rule changes that have to happen

Current media ownership and content rules were drafted in a bygone era, way before the internet and mobile technology. The rules simply have to change.

Fairfax Media chairman Roger Corbett described media ownership laws as “archaic” at the group’s annual meeting today, urging deregulation to “reset the competitive base” for a modern media industry.

Media executives have been making that same plea, with minimal success, for more than a decade and a half.

While it might be a statement of the obvious, ownership and content laws that were designed for an era when media forms were static, siloed and oligopolistic aren’t (and haven’t been a long time) appropriate when there are multiple distribution platforms for increasingly multi-media content from a vast array of both local and offshore sources.

The internet and smart devices have changed everything to do with media and, in this country, the pace of change can only quicken as the national broadband network rolls out and more people get access to higher-speed broadband. The convergence of the media, telecommunications and IT industries that was talked about two decades ago is now a familiar reality.

Former Australian Competition and Consumer Commission chairman, Graeme Samuel, asked a pointed question in a speech he gave earlier this week. He asked whether technology and its “inexorable” impact on consumer demands and preferences had made many of the existing concerns about media regulation irrelevant.

His conclusion was that, as far as possible, consumers should decide the form the technology-driven revolution took and the services and content they wished to access. Policymakers and regulators should “stand on the sidelines as referees” to ensure the players stuck to rules designed to encourage the most flexible and competitive framework possible.

Corbett said current media laws didn’t meet the needs of either the industry or the community and, indeed, restricted (development of) a modern industry and failed consumers. He warned there would be disinvestment if the laws weren’t changed to give companies like Fairfax the flexibility to operate across all available media platforms “in an environment of intense competition from global media and technology giants for advertising revenue and audiences.”

Specifically, he wants the “reach” rule that restricts the audience reach of the free-to-air networks, and the “two-out-of-three” rule that prevents common ownership of more than two out of the three forms of mass media -- newspapers, television and radio – removed to allow media companies to consolidate in response to the “massive” convergence of communications technologies and the fragmentation of advertising revenues occurring.

He didn’t ask for it, but the anti-siphoning rules that give preferential access to key broadcast rights -- transferring value from the content producers (the main sporting bodies in particular) to the free-to-air networks -- could be added to the wish list of changes.

Malcolm Turnbull clearly agrees with the deregulationary desires of much of the industry but has made it clear that he doesn’t want to move unless there is a consensus for change among an industry where consensus is rare, which is why there has been endless discussion about deregulation over the past 20 years but little action.

It is obvious that we already live in a highly-digitised environment for communications and media that can only become more pervasive over time. It is a highly dynamic environment, full of innovation and risk and entrepreneurs ranging from individuals to global behemoths, like Google and Apple, that have created their own digital highly disruptive ecosystems.

Much of the rationale for existing media regulation stems from an attempt by the lawmakers to preserve a diversity of voices in the local media industry.

There is no lack of diversity of voice in the digital age -- the legislators have focused on preserving the number of traditional players rather than recognising how fundamental the changes in the media landscape, which are accelerating, have been. The legislation has become a strait-jacket that inhibits the ability of those traditional businesses to evolve and, perhaps, to survive.

Samuel’s speech had a focus on control of content, not on regulation of ownership. That has been a long-standing theme in his commentary on media competition issues. He sees bundling of services and exclusive content as the competitive differentiator -- and the threat to intensity of competition -- in a digital environment and particularly in a post-NBN environment in this market. Current ACCC chairman Rod Sims has expressed similar concerns.

While the issue is complex, given the magnitude of the range of content available globally and locally, it’s not one beyond the capacity of conventional competition policy and the ACCC to regulate, if regulation of control of content is in fact a major issue given the smorgasbord available.

In the Productivity Commission’s 2000 report on the broadcasting industry it made it quite clear what it believed the future of media ownership laws should be in a convergent environment.

“The cross-media rules prevent mergers among ‘old’ media companies, and will impose increasingly severe constraints on them. The rules’ effectiveness will decline as convergence proceeds. The cross-media rules should be removed once a more competitive media environment is established,” it said.

That was nearly a decade-and-a-half ago -- about seven years before the first iPhone was released and only two years after Google was founded by Larry Page and Sergey Brin. The world of media and communications has changed somewhat since 2000, but those key conclusions in that report, as they relate to regulation of the media, are even more relevant today than they were then.