A UE1 JUDGMENT in the Federal Court on Thursday has shown serious weaknesses in the Government’s pay-television policy. The judgment itself was confined to a narrow point of statutory interpretation. It did not canvass the broader issues and the court was not invited to do so. None the less, the judgment ruled that the Minister for Communications, Senator Bob Collins, had acted beyond power in making a decision about the issuing of multi-point distribution system (MDS) licences.
Until very recently it was thought that MDS technology had only limited application to domestic television. When it was realised that MDS could be used for city-wide domestic pay TV, the Government attempted to stop a tender process under way for the issuance of further MDS licences.
The Government’s action put a spoke in the wheels of two businesses which had intended to use the technology. One was Steve Cosser’s Australis which wanted to launch a domestic pay-TV service in Sydney and Melbourne. The other was Kerry Stokes’s Australian Capital Equity which wanted to use the technology for other purposes, probably text and high-quality radio transmission. ACE successfully sought to have the Minister’s action declared invalid. As a result the Government must serious rethink its pay-TV direction.
It must be said that Kerry Stokes, through a family company, owns The Canberra Times, but he has not had any input in the preparation of editorial matter on the subject. In any event, his aims were not specifically directed at pay TV. He was caught up in a wider web. The broad question is not and never has been the delivery of text and still graphics through MDS which is Mr Stokes’s interest. The broad question is pay TV.
Thursday’s judgment has caught the Government out. The Government has insisted that the best delivery of pay TV would be digitally by satellite. It had already issued MDS licences, thinking that they would and could be used only for limited transmission of stills and video in a very limited area. When it found that it could be used for city-wide transmission of pay TV it stopped a tender process for the remaining MDS licences and further ordered that the Australian Broadcasting Authority not grant the extra necessary licence to broadcast to domestic receivers.
ACE challenged the former. Mr Cosser challenged the latter. Mr Cosser’s challenge is yet to be heard. No MDS domestic pay TV can go ahead with ABA approval.
The Government said it was acting purely out of the interests of consumers, saving them from investing in $400 worth of reception equipment for a service it says is inferior.
Others have suggested that it has acted (for whatever reason) to ensure that the big players, who have put their faith in satellite, do not lose the jump to a smaller player who had seen advantages of MDS they had not _ immediacy and cheapness. Others still have suggested that the Government felt it necessary to honour arrangements with Optus the satellite carrier made when it entered the telecommunications market in competition with Telecom. Whatever the truth of these assertions, the developments have highlighted the folly of the Government attempting to decide which technology should be used for pay TV and attempting to retain a monopoly over it.
In the whole sorry fiasco over pay TV the Government has played far too greater role. Given there are at least seven delivery methods and probably more likely before long, it was folly for the Government to attempt to pick which should be the delivery method. It should have stood back and let providers and consumers determine that. The result has been that rather than pick a winner the Government has just unnecessarily delayed pay TV.
It should have treated each technology separately. As each came along it should have acted in the public interest to ensure a position for the public broadcasters and to ensure an equitable auction of available frequencies (which are public property) so they do not overlap in a mad free-for-all scramble. Beyond that, the Government has no role. Consumers are not fools. They can decide whether to invest in between $400 and $1000 to install reception equipment for one or other technology.
If the Government insists on picking the delivery system and insists on excluding other systems, like the clumsy attempt to block MDS, on the ground that is waiting for the best technology, Australian consumers will be waiting forever for pay TV.
The Government must stop trying to pick technological winners. It must not leave itself open to the charge that it is restricting the introduction of other technologies for extraneous reasons. Other nations have pay TV; there is no technological or economic reason why Australians cannot have it, too. The only reason Australians are being denied the broader cultural, educational and entertainment choice of pay TV is government ineptitude. It should learn a lesson from Thursday’s decision and let the show go on.