Three card trick keeps media oligopoly firmly in place

3 card trick keeps media oligopoly firmly in placeJohn Howard—or perhaps more accurately his Treasurer, Peter Costello—seem to have pulled off the three-card trick, on both the National Party and the public, with changes to the media laws. The trick is primarily concerned with distraction, and nothing could have distracted the Nationals more than the fear of local media monopolies in rural and regional areas, which, under the bill, could have become even more concentrated.

After all of the necessary opportunities for a few National Party figures to grandstand about their concern about more diversity in the country, Peter Costello offered a compromise banning ownership, in a single non-metropolitan market, of more than two "old'' mediums, and then, almost as an afterthought, the same rule in the capital cities as well. The consequence was the quelling of National Party reservations, and the reservation of the Family First Senator, and the passage of the bill through the Senate was assured.

The Government spin was that the concessions were small ones, well worth it in its efforts to "free up'' Australia's media, and to modernise the media industry to take account of new technology, synergies from cross-media ownership, and the abolition of the long outdated rules against foreign ownership.

The truth is that no such result has been obtained. The chief purpose of the legislation, now, as it was from the beginning, is to entrench the commercial television oligopoly held by the major television networks, and to protect them from various forms of competition, including new free-to-air channels or networks, and novel but hardly new technology allowing multi-channelling from new competitors.

The legislation permits—and attempts to regulate—some emerging "new media'', but any development in this regard will probably be soon overtaken by innovation. It has been the notion that the media industry is being revolutionised by new computer and communications technology. By this theory making old rules focused on the "old media"—newspapers, magazines, radio and television—are obsolete and restrictive, inhibiting investment, innovation and the development of that critical mass and efficiency which could take the industry to a new level.

3 card trick keeps media oligopoly firmly in placeYet almost all of the legislation's focus is backwards—on the "old media'' and, even so far as new media is concerned, its focus is more on controlling the market than on liberating the industry to market forces. The immediate consequence, with or without the concessions to the National Party, will almost certainly be more market "rationalisation''—which is to say fewer owners and controllers of the media, and, by virtue of the efforts of the new combinations to cut costs, fewer sources of information, more infotainment and less in the way of news and views.

Where cross-media amalgamations occur, the impact of new requirements about local news and programming in rural areas is hardly likely to increase the range of material available, or its quality or quantity; it will be, as the National Party has feared, existing news recycled on to another medium. Rationalisation may well reduce the level and degree of the scrutiny of government.

The biggest beneficiary is the Packer empire, whether or not it seeks to expand its extensive television, magazine and digital and Internet interests into newspapers. That is because it is especially protected from market forces, as is Kerry Stokes, controller of the Seven Network, and the Ten Network. These have a special benefit because of their continued protection during the transition from analogue to digital transmission, as well as their insulation from new competition in the interim.

Left relatively in the cold is Rupert Murdoch of News Ltd, with enormous local monopolies in newspapers, as well as extensive Internet interests. He is now free either to expand into a television network, even if John Howard has effectively determined that he must pay a monopoly premium; the indications are that he will concentrate most of his efforts in new forms of media, beyond any capacity of Federal Government control.

There may well be a host of mergers among the second-tier players—ones that will probably not be greatly affected by the two-out-of-three rules.

The value of the privileged protections given to the main beneficiaries amounts to more than was distributed to the Australian community as a whole from this year's tax cuts. It is very hard to see any countervailing benefit to the public.

The test of it will not be seen merely from a series of transfers of ownership of existing media assets, nor, particularly, from continuing investment in new media.

It will be from whether the new and more concentrated big players are providing, from the sum of their operations, more voices, more news, views and services than the existing operations. It will be whether there is any real evidence that some minor loosening of regulation of cross-controls over old media in fact potentiates fresh investment and innovation in new media—investment and innovation that could not have happened before.

On the face of it, the public is entitled to be sceptical about whether this is what the Government expects, or even intends.



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