The Minister for Communications, Richard Alston, tells us that he has all he needs to know about the composition and terms of reference for the inquiry into media ownership in his head and he will be putting it on the table in due course.
The Coalition promised an early inquiry into media ownership but we are still waiting and the timing is getting crucial, not so much on the inquiry but on the regulatory regime that might flow from it. Inquiries into public policy these days are largely window dressing. Their conclusions are far more likely to be determined by who is doing the inquiry than by the process of the inquiry itself.
Timing is crucial because both Rupert Murdoch and Kerry Packer are circling the Fairfax group which at present is controlled by Canadian Conrad Black, though with only a 25 per cent holding and some pressure from his other business transactions to cash out.
At present Australia has one of the highest concentrations of media ownership in the western world and one of the highest rates of foreign ownership. The four main weapons that are supposed to protect the very considerable public interest in media ownership and conduct have failed on a very large scale in the past decade or so. Those weapons have been the cross-media rules in the Broadcasting Services Act, the licensing requirements of commercial broadcasting, the general competition rules in the Trade Practices Act and the ministerial discretion under foreign-investment legislation. The question is whether the media inquiry and the regulatory regime that follows it will do anything to change the situation.
Australian-born US citizen owns the highest circulation daily newspaper in every capital city except Canberra and Perth. Canadian Conrad Black controls the major classified-advertisement and serious-news newspapers in the two largest cities. Just three networks determine virtually all commercial television programming in Australia, and control and ownership of commercial television is highly concentrated.
In short, there are only one or two stand-alone Australian-owned media outlets in Australia. Further, there are very powerful economies of scale applying to news sources and advertising services that make a change to that situation unlikely without a stiff injection of competition rules.
The media inquiry must address some significant issues. It must first determine whether media is so different from other industries that the public interest requires special rules. The argument for this is that so much of public opinion, especially political opinion, is determined by the media that foreign ownership and concentration of ownership have a greater national detriment than in industries like, say, metal or textile production.
Hitherto, the only special rules on media related to broadcasting for which the Federal Parliament has a special head of power in the Constitution. For a long time it was thought that the Constitution did not give the Federal Parliament much power to regulate newspapers. More recent High Court jugdments, however, give the Federal Parliament a wider power over corporations and slightly narrow the ambit of the freedom of trade provisions, so it is likely that special rules can apply to print media monopolisation without having to be based upon broadcast holdings.
It would be better if the government used its powers to enhance more Australian and more diverse ownership in the media with specific media provisions. However, if it decides to abandon media-specific regulation and treat media ownership like any other business, some further issues arise.
One of the key elements of trade practices law in determining whether a business expansion is illegal monopolisation or anti-competitive is the definition of “”market”. At present this largely determined by the courts, as it witnessed by the Superleague fiasco. Is the market League, football, televised sporting spectacles and so on? In the media industry the possibilities are many. Is the market all media, daily newspapers, television, all broadcasting and so on. And the possibilities are further divided into news, advertising and entertainment segments and indeed into the gathering and disseminating roles. At present there are no clear guidelines as to what a market is, and therefore there is not clear statement of what an illegal media monopoly might be.
At least with the cross-ownership rules there are some clear statements about what is allowed and what is not, even if some of the big players use legal ingenuity to get around the rules from time to time.
The danger of abandoning special media rules is that media regulation gets thrown to the uncertainty of Trade Practices Act’s competition rules and its fuzzy definition of “market” with its boundless possibilities of dissection and differentiation based on micro-economics. As far as the public of Australia is concerned, though, some clearer protections against concentrations of media ownership may be desirable.
It may be that the Australian Competition and Consumer Commission is to be the sole watchdog of media ownership. But if that is the direction Senator Alston is heading, the commission will need some clearer idea of what it is dealing with.