The reforms will scrap the “two out of three” rule that prohibits a single entity owning a commercial television licence, radio licence and a newspaper in the same area and the “reach rule” which prevents a commercial broadcaster reaching more than 75 per cent of the population.
Despite the cabinet approval, there may be a long wait before the changes are enacted. The laws face a difficult passage through parliament and may not be passed until after the federal election due later this year.
Once passed, the new laws are expected to touch off a round of mergers between metropolitan and regional television broadcasters – and could allow other consolidation currently prohibited.
However, the changes put to cabinet by Communications Minister Mitch Fifield do not include a loosening of the anti-siphoning regime that quarantines a huge list of sporting events for free-to-air television – a reform advocated by News Corp Australia, a joint-owner with Telstra of pay-TV broadcaster Foxtel.
News Corp Australasia chairman Michael Miller said the company was disappointed at the outcome.
“Despite the broad recognition that Australia’s media laws are outdated, the government is proposing that only the reach and two-out-of-three rules be changed,” Mr Miller said.
“The fact that broader media reform issues such as the anti-siphoning regime are not part of the proposal makes it difficult to accept this as genuine media reform.”
Seven West Media wanted broad industry reform, as well as a review of television licence fees.
Seven West chief executive Tim Worner said the company opposed piecemeal reform. “It’s hard to know what these changes will actually deliver to ordinary Australians,” Mr Worner said, “and very difficult to support in the absence of any moves to address the regulatory constraints that are jeopardising the future of Australian free-to-air broadcasting, particularly licence fees.”
A reduction of industry licence fees of $153 million annually are expected to be addressed in the May budget.
The passage of the reforms is fraught politically. The proposals will be put to the Coalition partyroom on Monday, and the National Party wants to ensure there are sufficient safeguards for regional news content in the event of mergers of metropolitan and regional broadcasters.
The Labor Party is opposed to the removal of the two-out-of-three rule because of fears potential mergers could weaken ownership diversity, and is likely to call for a Senate review of the proposal.
This could delay passage of the laws until after the budget on May 10 – even further if the government takes up the option of an early election.
Crossbench support in the Senate is debatable in the wake of government legislation to introduce optional preferential voting for the Upper House – a move that would prevent preference deals that allow independents to be elected on a handful of primary votes.
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