The document discusses the recommendations from the Australian Government's Convergence Review, which examined how regulations need to change in response to technological changes blurring the lines between telecommunications, media, and technology industries. Key points:
- A new Communications Regulator is proposed to replace the Australian Communications and Media Authority and regulate media mergers, content standards, and promote Australian/local content.
- Content regulation is still needed but should apply consistently across all platforms. Broadcasting licenses would no longer be required.
- New powers are proposed for the regulator to address competition issues in content markets regarding exclusivity, bundling, and access to premium content.
- Content standards would continue to be regulated, with reforms to classification
Peter Ludin, Vice-President EMEA Telecom Solutions, Draka Communications
Demands of a modern network, how to balance network quality & costs, creating value through innovation and current & future innovations in the passive layer.
Peter Ludin, Vice-President EMEA Telecom Solutions, Draka Communications
Demands of a modern network, how to balance network quality & costs, creating value through innovation and current & future innovations in the passive layer.
Multi channel communications & service deliveryThom Kearney
This is a heavy presentation used to support a half day conference workshop way back in 2004. It presents the Multi-channel challenge, some communications 101 stuff, and some ideas on how to create an effective multi-channel strategy.
Value Networks and Business Models of Information-centric NetworkingTapio Levä
Presentation given in the "Future Media Distribution using Information Centric Networks" event organized by the SAIL and EFRAIM projects on February 13, 2013 in Stockholm, Sweden.
The presentation is based on the results of the SAIL (EC-FP7) project.
An operator CDN deployment in Latin America: facts & lessons learntnivedita_nouvel
This conference was given by Martin Ortiz, CDN product manager at Telecom Argentina, and Jacques Le Mancq, CEO from Broadpeak, the CDN solution provider, at CDN World Summit in London on October 27th.
OpenSplice.org is the forge hosting the OpenSplice DDS Open Source Project. This presentation goes into the details of how the community is managed, what are the processes behind release management as well as roadmap planning and technology incubators.
The greatest Australian competition reforms in 20 years?Martyn Taylor
The Australian Commonwealth Government announced in December 2013 that it will undertake a fundamental review of Australian competition policy. This review is colloquially known as the ‘root and branch’ review. The Review will involve the most comprehensive consideration of Australia’s competition and regulatory framework in 20 years.
Competition Law in High Technology Industries - Insights for AustraliaMartyn Taylor
Digital disruption is blowing a Schumpeterian gale of creative destruction throughout the global economy. These winds of change are delivering substantial increases in consumer welfare. The glowing glass screen of a smartphone enables us to access the library of all human knowledge. We can order any imaginable good or service; literally at our fingertips.
Yet competition challenges are arising. Firms bearing the brunt of digital disruption are seeking regulatory protection. Those firms riding the winds of change are achieving concerning levels of global market power. Global debate is occurring regarding the extent to which regulatory intervention is appropriate. The resulting level of political concern is partly evidenced by the inclusion of digital technology in Australia’s Harper Competition Review.
This paper considers unique competition issues raised by high technology industries with a particular focus on software-driven digital platforms. This paper argues that Australian competition law strikes an appropriate balance between preserving competition and promoting innovation, but continued prioritisation of high technology markets by Australian regulators and policy-makers is justified. High technology markets are as susceptible to anti-competitive behaviour as any other markets and, in some areas, particularly so.
As part of this analysis, this paper considers global trends and recent developments, particularly in the United States and European Union. In that context, this paper considers how modern competition law is now seeking to address complex questions of dynamic efficiency, innovation markets and cross-border e-commerce. This paper seeks to identify insights for Australian competition law and policy in light of the recent Harper Competition Review. Finally, this paper concludes with a number of observations, including future challenges in regulating digital platforms.
Multi channel communications & service deliveryThom Kearney
This is a heavy presentation used to support a half day conference workshop way back in 2004. It presents the Multi-channel challenge, some communications 101 stuff, and some ideas on how to create an effective multi-channel strategy.
Value Networks and Business Models of Information-centric NetworkingTapio Levä
Presentation given in the "Future Media Distribution using Information Centric Networks" event organized by the SAIL and EFRAIM projects on February 13, 2013 in Stockholm, Sweden.
The presentation is based on the results of the SAIL (EC-FP7) project.
An operator CDN deployment in Latin America: facts & lessons learntnivedita_nouvel
This conference was given by Martin Ortiz, CDN product manager at Telecom Argentina, and Jacques Le Mancq, CEO from Broadpeak, the CDN solution provider, at CDN World Summit in London on October 27th.
OpenSplice.org is the forge hosting the OpenSplice DDS Open Source Project. This presentation goes into the details of how the community is managed, what are the processes behind release management as well as roadmap planning and technology incubators.
The greatest Australian competition reforms in 20 years?Martyn Taylor
The Australian Commonwealth Government announced in December 2013 that it will undertake a fundamental review of Australian competition policy. This review is colloquially known as the ‘root and branch’ review. The Review will involve the most comprehensive consideration of Australia’s competition and regulatory framework in 20 years.
Competition Law in High Technology Industries - Insights for AustraliaMartyn Taylor
Digital disruption is blowing a Schumpeterian gale of creative destruction throughout the global economy. These winds of change are delivering substantial increases in consumer welfare. The glowing glass screen of a smartphone enables us to access the library of all human knowledge. We can order any imaginable good or service; literally at our fingertips.
Yet competition challenges are arising. Firms bearing the brunt of digital disruption are seeking regulatory protection. Those firms riding the winds of change are achieving concerning levels of global market power. Global debate is occurring regarding the extent to which regulatory intervention is appropriate. The resulting level of political concern is partly evidenced by the inclusion of digital technology in Australia’s Harper Competition Review.
This paper considers unique competition issues raised by high technology industries with a particular focus on software-driven digital platforms. This paper argues that Australian competition law strikes an appropriate balance between preserving competition and promoting innovation, but continued prioritisation of high technology markets by Australian regulators and policy-makers is justified. High technology markets are as susceptible to anti-competitive behaviour as any other markets and, in some areas, particularly so.
As part of this analysis, this paper considers global trends and recent developments, particularly in the United States and European Union. In that context, this paper considers how modern competition law is now seeking to address complex questions of dynamic efficiency, innovation markets and cross-border e-commerce. This paper seeks to identify insights for Australian competition law and policy in light of the recent Harper Competition Review. Finally, this paper concludes with a number of observations, including future challenges in regulating digital platforms.
Predatory buying to corner a market: ACCC v Cement AustraliaMartyn Taylor
Case note for Australian Journal of Competition & Consumer Law (AJCCL) – 1 March 2014 on Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2013] FCA 909
Merger review - International insights - April 2016Martyn Taylor
A comparison between merger review in the United States, European Union, United Kingdom, New Zealand and Australia (adopting an Australian perspective)
EXPERTS’ REPORT ON NATIONAL ICT POLICY PHASE 2 REFORMS - PAPUA NEW GUINEA - M...Martyn Taylor
Experts report prepared by Freehills and Concept Economics in March 2009 in relation to Phase 2 of the telecommunications sector reforms in Papua New Guinea. The second of two experts reports released into the public domain. The documents are useful given their comprehensive coverage of telecommunications sector reform, including identifying international best practice in relation to developing nations.
Status of Australian Privatisations - October 2016Martyn Taylor
Overview of the status of the various privatisations of Commonwealth and State assets proposed in Australia as at October 2016 with a focus on infrastructure
EXPERTS’ REPORT ON NATIONAL ICT POLICY PHASE 2 REFORMS - PAPUA NEW GUINEA - F...Martyn Taylor
Comprehensive experts report prepared by Freehills and Concept Economics in February 2009 in relation to Phase 2 of the telecommunications sector reforms in Papua New Guinea. The first of two experts reports. The documents are useful given their comprehensive coverage of telecommunications sector reform, including identifying international best practice in relation to developing nations.
Presentation to the Asia Pacific Fuel Industry Forum on the development of fuel industry competition in Australia and the role of generic competition law
NSW Electricity Privatisation - Privatisation of Electricity Networks, NSW, A...Martyn Taylor
In June 2014, the State Government in New South Wales (NSW) announced that it intends to privatise the NSW electricity networks. This briefing note sets out the likely structure of the privatisation and identifies some key issues.
Privatisation of Port of Melbourne, AustraliaMartyn Taylor
In its Budget on 6 May 2014, the State Government of Victoria confirmed that it would privatise the Port of Melbourne in Australia. We expect significant investor interest. This briefing note sets out our understanding of the proposed privatisation.
Contents:
- Overview of the Port of Melbourne
- Timetable for privatisation
- Political context to the privatisation
- Scoping study and differences in approach
- Transaction structure
- Likely sale price
- Preliminary issues
- Expansion of the Port and development of a second port
- Regulatory clearances for bidders
- State-based regulation of Port charges
- Commonwealth-based regulation of Port charges
- Other issues to be considered in due diligence
- Our team
Telecoms spectrum licensing - regulation of radiofrequency spectrumMartyn Taylor
Presentation on the regulation of radiofrequency spectrum used for mobile telecommunications. What is spectrum ? How is it regulated ? What are the key commercial issues ?
Competition and Consumer Law Update: Every cloud has a silver lining...Martyn Taylor
Overview of developments in competition, antitrust and consumer law in Australia expected over the next 12 months. The presentation covers developments at the ACCC, status of the Harper Competition Reforms, substantive competition litigation, developments under the Australian Consumer Law, and other developments to note
Competition Law in High Technology Industries - Insights for Australia (Slides)Martyn Taylor
SLIDES TO MATCH PAPER IN OTHER SLIDESHARE
Digital disruption is blowing a Schumpeterian gale of creative destruction throughout the global economy. These winds of change are delivering substantial increases in consumer welfare. The glowing glass screen of a smartphone enables us to access the library of all human knowledge. We can order any imaginable good or service; literally at our fingertips.
Yet competition challenges are arising. Firms bearing the brunt of digital disruption are seeking regulatory protection. Those firms riding the winds of change are achieving concerning levels of global market power. Global debate is occurring regarding the extent to which regulatory intervention is appropriate. The resulting level of political concern is partly evidenced by the inclusion of digital technology in Australia’s Harper Competition Review.
This paper considers unique competition issues raised by high technology industries with a particular focus on software-driven digital platforms. This paper argues that Australian competition law strikes an appropriate balance between preserving competition and promoting innovation, but continued prioritisation of high technology markets by Australian regulators and policy-makers is justified. High technology markets are as susceptible to anti-competitive behaviour as any other markets and, in some areas, particularly so.
As part of this analysis, this paper considers global trends and recent developments, particularly in the United States and European Union. In that context, this paper considers how modern competition law is now seeking to address complex questions of dynamic efficiency, innovation markets and cross-border e-commerce. This paper seeks to identify insights for Australian competition law and policy in light of the recent Harper Competition Review. Finally, this paper concludes with a number of observations, including future challenges in regulating digital platforms.
MVNOs and mobile resellers - Commercial and regulatory issuesMartyn Taylor
An overview of the commercial and regulatory issues facing MVNOs and mobile resellers with a particular focus on the Asia-Pacific region, using Singapore as a case study
M2M (Machine to Machine) & MVNOs - Mobile telecommunications in 2014Martyn Taylor
Presentation on machine to machine (M2M) and mobile virtual network operators (MVNO) in the context of mobile telecommunications. Explanation of business models; overview of legal and regulatory issues; case studies
Presentation about research challenges and upcoming calls in Software and Services for the S-Cube workshop at the International Conference on Software Engineering, Zürich (Switzerland), 5 June 2012
A Smarter Content Delivery System To Accelerate Complex Contentgyanendra1
Traditional CDNs were designed to accelerate static objects on a website by architecting the site to store the static objects in a different host location, away from the main site, CNAME-ing only that host to the CDN provider. This separation was crucial, as the CDN handled only the static pages, and the non-cacheable objects were served directly from the origin server. However, this approach is inherently inefficient, as it requires modification of the existing site. It is also error prone as links–internal or external–may still direct to the original host.
SDN Service Provider use cases Network Function Virtualization (NFV)Brent Salisbury
SDN for Service Providers as Defined by Service Providers. This was from the Software Defined Networking Summit | 13-14 November 2012. Thoughts at http://networkstatic.net/sdn-use-cases-for-service-providers/
Accelerate your websites and Web applications with unmatched performance and real-time control, through Cotendo’s integrated suite of CDN and Site Acceleration services. Cotendo Advanced DNS (Domain Name Service) reduces latency, scales seamlessly for every audience size and geography, and enhances service availability. Cotendo’s distributed service model provides another layer of security for your website and web applications. DNS queries can be flexibly handled based on rules (location, time) and real-time conditions.
Cloud Lock-in vs. Cloud Interoperability - Indicthreads cloud computing conf...IndicThreads
Session presented at the 2nd IndicThreads.com Conference on Cloud Computing held in Pune, India on 3-4 June 2011.
http://CloudComputing.IndicThreads.com
Abstract:As the cloud adoption increases, there is a growing concern about the lock-in of customers into the various cloud platforms. This session will discuss various major cloud platforms, the type of lock-in the customer will face in each of these platforms and what each customer can do to minimize their lock-in.
Key takeaways for audience are:
Understand what is cloud lock-in
Types of cloud vendor lock-ins
What is cloud interoperability
Major initiatives around cloud interoperability standards
Goals, differences and players/proponents of these major standards
Steps to minimize cloud lock-in for your customers
Speaker: Ashwin Waknis is a Sr. IT professional with 15 years in the industry. Ashwin is currently head of the Cloud Professional Services Business at Persistent Systems. Before that Ashwin was a Sr. Product Manager at Cisco Systems where he lead major initiatives around Knowledge Management, Enterprise Portal, Web 2.0/Social softwares and Enterprise Search. For the last 2 years, Ashwin has been involved in Cloud Computing initiatives first at Cisco and then at Persistent Systems.Ashwin has spoken at many customer workshops and events organized for educational institutes.
Developments in the TMT Sector - Current trends & emerging legal issuesMartyn Taylor
Presentation on developments in the TMT sector given to the "Technology, Media & Telecommunications: Challenges & Opportunities" seminar in March 2017 in Sydney
Content:
- Software eats the world - global disruption caused by digital platforms
- Technology - Big Data - legal issues in data security and sovereignty
- Media - disruption to content business models and recent law reforms
- Telecoms - the outlook to 5G mobile and the future of next generation networks
- Emerging legal issues in particular sectors - fintech, smart grid, transport
Telecoms in a convergent world - Emerging issuesMartyn Taylor
Telecommunicationss in a convergent world; Big data and its implications; M2M and the Internet of Things; Digital content and video streaming; Growing use of strategic alliances
Infrastructure regulation - exploring the key models (Australia)Martyn Taylor
Slide presentation to infrastructure regulation conference in Sydney, Australia:
•Insights into different regulatory models used in Australia
•Relationship between Commonwealth and State regulation
•Current issues and regulatory trends
•Importance of the Regulatory Asset Base and WACC
•Impact of regulation on infrastructure cash flows
MVNOs & M2M (Machine to Machine) - Mobile telecommunications in 2015Martyn Taylor
Presentation on mobile virtual network operators (MVNO) and machine to machine (M2M) and in the context of mobile telecommunications. Explanation of business models; overview of legal and regulatory issues; case studies. Updater version of March 2014 presentation
Obtaining Australian merger and acquisition clearances in 2012Martyn Taylor
An overview of the current issues and methodology for obtaining a merger and acquisition clearance from the Australian Competition and Consumer Commission in Australia.
1. TELECOMMUNICATIONS, MEDIA AND TECHNOLOGY
The Impact of the Convergence Review
Dr Martyn Taylor
Partner
martyn.taylor@nortonrose.com
Nick Abrahams
Partner
nick.abrahams@nortonrose.com
10 May 2012
1
2. Overview of this Seminar
Martyn – the Convergence Review
• Context to the Convergence Review
Dr Martyn Taylor
• Overview of the Final Report and its recommendations Partner
Sydney
T 02 9330 8056
martyn.taylor@nortonrose.com
Nick – the practical impact of the Review
• Media ownership reforms
• Practical implications, including M&A opportunities
Nick Abrahams
• Industry response Partner
Sydney
T 02 9330 8312
nick.abrahams@nortonrose.com
2
4. What is convergence ?
• Digitisation of content, hence it can be easily replicated and communicated.
• Standardisation of carriage and delivery mechanisms via the Internet.
• Fantastically powerful computers in convenient and accessible devices.
• Vertically-integrated delivery mechanisms replaced by ‘hourglass model’.
• Result: convergence of telecoms, IT, radio/TV broadcasting, print media
Any form of content can now
be digitised, sent over the
Rich array of content
Internet, and accessed via a
single interactive device.
Device can accept all
forms of digital content
and deliver to consumer
Consumer receives rich
interactive experience 4
5. Impact of convergence on regulation
• Conflation of platforms, challenging traditional business models. Volume and variety of content has
exponentially increased. Business models have rapidly evolved.
• Convergence has caused market entry, plus existing players offering new services over new platforms.
• Regulatory structures have not kept pace with these changes, creating a regulatory mismatch.
5
6. Scope and terms of reference of review
Probably the most ambitious and far-reaching convergence review yet undertaken by any
industrialised country in the world.
• Motivated in part by the National Broadband Network - stimulation of demand and innovation
• Comprehensive review of media, content and communications policy and regulation:
• Broadcasting Services Act 1992
• Telecommunications Act 1997, but not basic telephony services
• Radiocommunications Act 1992
• Identifies any amendments required to this regulatory framework to reflect ‘convergence’
• convergence of content, including digital content, broadcasting and print
• convergence of content delivery platforms, including Internet, TV and print media
• Identifies key principles and objectives to underpin new framework, as well as implementation
options and likely timeframes.
Notwithstanding the criticism, the Report is likely to be influential going forward. The
Government response is the next stage in the process.
6
7. Review by the Convergence Committee
Draft Terms of Terms of
International precedent Reference released Reference
and experiences 14 December 2010
Background
Paper
Glen Malcolm Louise
340 public submissions Boreham Long McElvogue
and 8 public hearings
Framing (Chairman)
Paper
Emerging
ACMA ‘Broken Concepts’ & Documents available at:
Issues Paper
‘Enduring Concepts’ Reports http://www.dbcde.gov.au/digital_ec
onomy/convergence_review#qanda
Detailed
Diversity & Licensing,
Discussion
Market Layering &
Review of Schedule 7 of Papers
Structure Regulation
Broadcasting Services Act
Spectrum Australian Community
Allocation & and Local Standards
Management Content
ALRC review of copyright
ALRC review of National in the digital environment
Classification System
Interim
Report
Government response as next
Independent Media Inquiry Final Report of step in process
Final
(Finkelstein Report) Committee released
Report
30 April 2012 7
9. Structure of report and general approach
Need for a new Key guiding principles:
Policy
objectives approach 1. Deregulation, guided by cost-benefit
2. Long-term view
Content-related 3. Principles-based policy framework
Competition Media
framework ownership competition 4. Consistent regulatory standards
issues
Content Australian Australian Local content Public and
Content standards content on content on on television community
regulation screen radio and radio broadcasting
Spectrum
Spectrum allocation and
regulation management Review proposes two new regulatory agencies:
• New ‘Communications Regulator’ to replace ACMA
Implementing
Implementation the new • News Standards Body replaces Australian Press Council
approach
9
10. Policy
New Communications Regulator objectives
New Communications Regulator (NCR) established ‘as soon as possible’:
• NCR would replace ACMA. Phased handover of functions from NCR to ACMA.
• Regulates media mergers, sets content rules and standards, but would not
regulate news and commentary (except serious breaches of industry code)
Australian Communications
& Media Authority
• Independent statutory corporation with Board (as with ACMA) that adopts a
‘company model’: part-time chair, deputy, non-exec & exec directors. Chris Chapman is chairman
8 Board members meeting
• Cross-appointments between ACCC and new CR would continue. twice a month
Rod Sims (ACCC) is cross-
• Intended to have a high degree of political independence Ministerial directives appointed to Board
subject to Parliamentary scrutiny (as with ACCC).
ACMA has >600 staff
Why not simply rebadge ACMA (with more powers and a wider mandate)? Offices located in Canberra,
Melbourne, Sydney
• Possibly (?), NCR intended to be new body that has its own distinct culture. Six key structural divisions:
- Digital transition
- Comms infrastructure
• Arguably (?), changes do not involve simple transfer of functions, but creation of - Digital economy
- Content & consumer
new functions and powers within new regulatory framework. - Corporate services
- Legal services
We assume that the NCR would inherit ACMA staff and assets.
10
11. Policy
Need for a new approach objectives
Do we need still content regulation and, if so, what form should it take ?
• Outdated legislative concepts may stifle innovation and impose excessive costs.
• While media landscape has changed, key policy principles largely endure.
• Report identifies that regulation is still necessary to address three key issues:
• excessive concentration of media ownership
• media content standards across all platforms
• promotion of Australian and local content (84% public support)
• Broadcasting licensing and platform-specific regulation should be removed.
• Regulation should address generic content delivery across all platforms.
• Regulation should be focussed at ‘significant enterprises that provide
professional content to Australians’.
In essence, the Report proposes that Government should only regulate the
most substantial and influential entities that deliver content. Any other
entities only need be subject to industry and voluntary self-regulation. 11
12. Policy
Need for a new approach objectives
OLD MODEL Print Broadcast Internet Telecoms
Content
The philosophy driving the reforms –
Application
ensure a consistent approach to
regulation across each horizontal
Logical layer of the value chain
Physical
Current model: Disjointed regulatory
NEW MODEL Print Broadcast Internet Telecoms
structure involving vertical silos and
some gaps
Content Content services
Application Application services (software)
Logical Carriage services
New model: Horizontal regulatory structure
with harmonised regulation at each layer Physical Infrastructure services
12
13. Policy
Need for a new approach objectives
Key recommendations:
• New policy framework should adopt technology-neutral approach.
• No licensing for the supply of content or communications, except where
necessary to manage finite resources (e.g.. radiofrequency spectrum).
• Accordingly, broadcasting licences would no longer be required.
• Regulation should apply to ‘large enterprises that provide professional content
services to significant numbers of Australians’:
New concept of
• must control the professional content they deliver
“Content Service
Enterprise” (CSE)
• must meet a specified Australian user threshold
• must meet a revenue threshold based on revenue derived from Significant practical
supplying that professional content to those Australians issues how these
definitions will apply
• Substantive thresholds to be subject to periodic review by regulator with a
view to regulating only the most substantial and influential entities.
Thresholds not set in report, only some indication given as to level…
13
14. Policy
Need for a new approach objectives
Application of indicative thresholds 1. Australian users exceed 500,000 per month
will likely catch 15 entities as
2. $50 million pa of Australian-sourced professional
‘Content Service Enterprises’
content revenue (excluding user-generated content)
Entities caught by new
definition, hence
subject to new
CSE regulation
Entities not caught by
new definition
14
15. Competition
Content-related competition issues framework
Concern that content ownership may be new bottleneck to competition:
• NCR would be empowered to conduct market investigations where content- New powers to
related competition issues are identified (in parallel with ACCC). make rules that
regulate content
• NBC would be granted statutory rule-making powers to promote fair and arrangements
that are ‘unfair’
effective competition in content markets (complementing ACCC).
Why is this necessary or desirable? Can’t the ACCC assume this role?
• Report considers ACCC powers are not broad enough to address content rights.
• Current ACCC powers are ex post (enforcement after conduct occurs), rather than
ex ante (ability to make pre-emptive rules).
How would the new powers be exercised ?
• Public inquiry following complaints, or on referral from ACCC or regulator
• Outcomes could include referral to ACCC, making rules, or education.
NB. These conclusions are controversial. General approach in Australia has
been to concentrate all competition functions in the ACCC for all sectors. 15
16. Competition
Content-related competition issues framework
International best practice does throw some weight behind concurrent
jurisdiction, but the Report is (arguably) selective in its examples:
United Kingdom
• Ofcom (as communications regulator) has concurrent powers with the Office of
Fair Trading (as competition regulator).
• Ofcom and OFT consult to determine which regulator can best run each case.
United States
• The Federal Trade Commission (FTC), Department of Justice (DOJ) and
Federal Communications Commission (FCC) each have concurrent powers.
• Some legislative demarcation, but primarily use memoranda of understanding.
Canada
• The Canadian Competition Bureau (CCB) and the Canadian Radio-television
and Telecommunications Commission (CRTC) have concurrent powers.
• The CCB and CRTC have entered into a co-ordination agreement.
16
17. Competition
Content-related competition issues framework
Types of conduct that could be addressed by new rule-making powers:
• Third party access to exclusive premium content:
• Eg PhoneCo obtains exclusive rights to AFL/NRL content over mobiles
• Bundling of premium content with other goods and services:
• Eg PhoneCo requires brand phone to be acquired in order to get content
Key concerns:
• Discriminatory conduct (raising so-called ‘net neutrality’ issues): - exclusivity
- bundling
• Eg PhoneCo gives mobile streamed content priority over mobile VoIP calls - net neutrality
- metering
• Metering of content:
• Eg PhoneCo provides ‘walled garden’ of unmetered content to users
Other issues identified in report for further analysis…
• Whether retransmission should be regulated (e.g., must-carry of free-to-air
television on subscription TV networks)
• A full review of the anti-siphoning scheme should occur within 5 years. (Anti-
siphoning gives free-to-air preferential access to certain content and events)
17
18. Content
Content standards regulation
Report concludes that content regulation is necessary for two key forms of
content. All relevant content should match community standards:
• Inappropriate and offensive content (i.e., censorship requirements)
• Fairness and accuracy of journalistic content.
Current regulatory situation:
• National Classification Scheme classifies offensive content (e.g., violence).
• Industry self-regulatory codes regulate journalistic content.
ALRC and Finkelstein, respectively, reviewed this situation and recommended reforms.
Children’s content would be subject to specific regulatory controls:
• Review Committee received clear message that standards must be maintained to
protect children from harmful and inappropriate content.
• Recommended that new Communications Regulator have discretion to set
appropriate mandatory standards.
18
19. Content
Content standards regulation
Recommendations from ALRC review of National Classification Scheme:
• First comprehensive review of censorship and classification since 1991.
• National Classification Scheme (NCS) pre-dated widespread use of the Internet.
• NCS is ‘analogue legislation in a digital world’ (e.g. regulation of online games).
• Proposed a shift in regulatory focus to restricting access to adult content.
Convergence review has now endorsed many ALRC recommendations:
• Regulation should apply to both online and offline environments on a technology-
neutral basis where content is distributed to Australian public. Classification
Board would be
• Reform of NCS would occur and a new Classification Board would be created. created within
new regulator
• New classification legislation is required which consolidates various regimes.
• The regulator should have the power to approve industry self-regulatory codes.
• Content providers should ‘take reasonable steps’ to restrict access to adult content
(e.g., provide mechanism for consumer complaint and take-down on notice).
19
20. Content
Content standards regulation
Ray Finkelstein
Recommendations from Finkelstein’s Independent Media Inquiry: QC
• Self-regulatory approaches to industry regulation have not been successful in
achieving the necessary level of accountability of Australian media.
‘News Standards Body’
• Government should intervene to regulate journalistic standards by creating new
statutory body, the ‘News Media Council’ (NMC) Replaces Australian Press Council
• NMC would set journalistic standards, handle complaints, and take enforcement Membership is mandatory for
Content Service Enterprises
action in relation to print, online, radio and television.
Membership is voluntary, but
‘encouraged’, for others
Convergence Report accepted part (but not all) of these recommendations:
Enforces Media Code providing:
• News content should be regulated similarly, irrespective of delivery platform. - fairness
- accuracy
• Current system for regulating news media is not effective. - transparency
in professional news/commentary.
• A self-regulatory structure should be adopted by the industry on a platform-neutral
Funded primarily by members.
basis in the form of a ‘News Standards Body’.
Government funds any shortfall.
• The ‘News Standards Body’ would replace the Australian Press Council.
Credible sanctions for breaches.
• After a period of time, the Government will again assess whether the self-
ABC and SBS not members (as
regulatory approach is working. regulated directly by Acts)
• Appointing an independent government body to oversee the media is a ‘measure Phased implementation.
of last resort’ if the self-regulatory approach is found not to work.
20
21. Content
Australian content on screen regulation
Convergence Report recognises social & cultural benefits of content that
recognises Australian identity, character, and cultural diversity:
• Australian drama, documentary and children’s content require the most support.
Continued support measures are necessary, but require reform:
• Australian content is expensive, hence would be under-produced if not mandated.
• Distribution measures currently require Australian content in free-to-air
television time (55%) and advertising time (80%), plus 10% of drama
expenditure for subscription TV.
• Production measures currently include $60 million direct subsidy via Screen
Australia, and Produce Offset refundable tax offset.
• Burden should be borne by those larger enterprises that have the financial capability
and that stand to gain the most.
• Scope of Australian content requirements should be broadened, otherwise amount
of Australian content consumed will diminish as consumers move to other platforms.
• Canada and EU are now regulating ‘video on demand’ services,
21
22. Content
Australian content on screen regulation
New ‘Uniform Content Scheme’ (UCS) as a form of mandated investment:
• UCS would apply to all Content Service Enterprises that meet the following criteria:
• must offer ‘professional television-like drama, documentary or children’s
content’ (‘relevant content’);
Free-to-air receive
• revenue of at least $200 million pa from professional video content; the following quid
pro quo benefits
• monthly audience of at least 500,000 for professional video content.
1. Receipt of new
• UCS would require Content Service Enterprises to either: spectrum licence.
• contribute to a ‘converged content production fund’ (like Screen Australia); or 2. Access to higher
40% tax offset for
• invest a percentage of their Australian market revenue from relevant content. Producer Offset.
3. No full fourth
• Most likely, 25% of the funding would be required to support children’s content.
commercial TV
broadcaster on
Transitional arrangements: sixth channel.
• The abolition of the quotas and minimum expenditure requirements would continue 4. Protection of
to apply for a transitional period. sports rights in anti-
siphoning list for
• Greater interim burden borne by free-to-air as a quid pro quo for ‘wider benefits’. another 5 years.
22
23. Content
Australian content on radio regulation
Convergence report recommendations:
• Australian music quotas should apply to analogue and digital radio services
offered by Content Service Enterprises.
• Music quotas should not apply to temporary digital radio services.
• Quotas should not apply to Internet-based music services at this time.
Basis for recommendations:
• Currently analogue radio is required to play minimum levels of Australian music
under Commercial Radio Australia Code of Practice (between 5% and 25%).
• As audiences grow and digital radio services mature, the content requirements
should also be applied to digital radio. (An exemption currently exists to permit
experimentation with niche services as ‘event channels’).
• While regulatory parity suggests Internet should also be covered:
• Internet radio is often simulcast with terrestrial, so already regulated
• Diversity of audio formats and music delivery mechanisms would make it
‘difficult – if not impossible – to consistently regulate’ the Internet.
23
24. Content
Local content on TV and radio regulation
Convergence report recommendations:
• Commercial free-to-air TV and radio broadcasters using spectrum should continue
to devote a specified amount of programming to material of local significance.
• A more flexible compliance and reporting regime for TV and radio should apply.
• The current radio ‘trigger event’ rules should be removed.
Basis for recommendations:
• Licence conditions currently require commercial free-to-air TV and radio
broadcasters to broadcast minimum amounts of material of local significance.
• Community has reasonable expectation that content meets their local needs, so
local content requirements should be maintained.
• Some issues with existing obligations being too inflexible regarding compliance.
• Trigger event rules are too onerous (these require reporting to ACMA with local
content plan if various events occur, such as a change in control).
• Once broadcasting licences are removed, the relevant licence conditions should
be incorporated into spectrum licences.
24
25. Content
Public & community broadcasting regulation
Convergence report recommendations:
• The charters of the ABC and SBS should be updated to expressly reflect the
range of existing services, including online activities.
• To the extent that Australian content quota obligations continue on a transitional
basis, they should also apply to the ABC (55%) and SBS (27.5%).
Basis for recommendations on charter:
• The ABC and SBS make important contributions to the social, cultural and
economic development of Australia.
• Charters of ABC and SBS require them to recognise existing services of other
operators, so extending their charter to include online services is acceptable.
• Charters should be updated to reflect the range of digital activities they perform.
Basis for recommendations on quotas:
• Given the substantial taxpayer investment in the public broadcasters, it is
appropriate that Australian content quotas be applied to them.
• Content quotas will only remain for an interim period in any event given reforms 25
26. Spectrum
Spectrum allocation & management regulation
Historically, broadcasting spectrum treated differently to other spectrum:
• Minister has designated some spectrum as broadcasting spectrum.
• ‘Beauty contest’ allocation for TV. Financial selection for commercial FM radio.
• Entitlement to use broadcasting spectrum linked to broadcasting licence.
• Use of apparatus licensed-transmitters based on fixed fee 5 year licence.
• Moratorium on fourth commercial television network.
• Annual licence fees as percentage of gross earnings (up to 9% TV, 3.25% radio).
Convergence Review recommends a common approach to all spectrum :
• Spectrum licence for 15 year term, not linked to apparatus or any other licences.
• Market-based price allocation, usually by auction. Licence can be traded/leased.
• Minister would have powers to reserve spectrum to achieve policy objectives
(such as public and community broadcasting).
• Spectrum planning process should be required to take into account public interest
considerations, including recognition of social and cultural diversity. 26
27. Implementation
Implementing the new approach
3 stage approach… 1. Establish Communications Regulator
Stage 1
2. Update ABC and SBS charters
Stand-alone priority changes to
policies, programs and legislation 3. Rationalise local content rules
4. Media ownership regulation reforms
5. Establish ‘News Standards Body’
Stage 2 1. Repeal Broadcasting Services Act
2. Enact content regulation legislation
New content services legislation to
replace Broadcasting Services Act 3. Migrate ACMA functions to new regulator
4. Abolish ACMA
5. Allocate new spectrum licences
Stage 3 1. Repeal Telecommunications Act
2. Repeal Radiocommunications Act
Reform of communications
legislation to ensure technological 3. Repeal content regulation legislation
neutrality 4. Repeal associated regulatory instruments
5. Enact integrated Communications Act
27
29. Current media ownership rules
The current media ownership rules aim for diversity and include numeric rules related to
radio licence areas such as:
• “4/5” rule (minimum number of voices) – no less than five independent and separately
controlled media operators or groups in a metropolitan commercial radio licence area, and
no less than four in a regional area
• “2 out of 3” rule – cannot control more than two out of three specified media platforms
(commercial TV, radio or an associated newspaper) in a commercial radio licence area
• “One-to-a-market” rule – cannot control more than one commercial TV broadcasting
licence in a licence area, with limited statutory exceptions
• “Two-to-a-market” rule – cannot control more than two commercial radio broadcasting
licences in the same licence area, with limited statutory exceptions
• “75% audience reach” rule – cannot control commercial TV broadcasting licences if the
combined licence area exceeds 75% of the Australian population
29
30. Recommendation to abolish
ownership rules
• No review of impact of mergers at national level
• Subscription TV considered not relevant to diversity
• 75% reach rule somewhat limited as regional TV affiliates often
carry exactly same programming as metro broadcasters
• National newspapers are not considered
30
31. Recommendation to abolish
ownership rules
Recommendations:
• Drop radio licence area concept & move to local areas (determined by
regulator)
• Regulate based on influence not platform – so newspapers, subscription TV &
internet content providers are covered
• Have a minimum number of media groups (determined by regulator) per local
area – probably keep 4/5 rule but regulator can allow mergers that breach the
test if “public benefit”
• Large scale mergers assessed on a “public interest” test basis
• Drop 75%, 2 out of 3, 1 to a market (TV) & 2 to a market (radio)
• The onus to show that the outcome of a proposed deal is not in the public
interest should be on the regulator
31
33. Issues with changes to
broadcasting licensing regime
Recommendations:
• Existing holders of commercial broadcasting licences would, in effect,
have these licences replaced with spectrum licences (via the conversion
of apparatus licences to spectrum licences),
• The new Communications Regulator would set an annual access fee
based on the value of the spectrum as planned for broadcasting use (as
licence fees will be abolished)
• Spectrum licensees would be able to trade channel capacity within their
spectrum
• Spectrum capacity on the sixth planned TV multiplex (“sixth channel”)
would be used to maximise diversity, hence no new full fourth
commercial free-to-air operator would enter the market. Rather, criteria
would promote specific genre channels as with pay TV.
33
34. Issues with changes to broadcast
licensing regime
• Broadcasting licences are currently used to regulate the quantity and types of broadcasters
and the content of broadcasts – not directly related to the associated rights to spectrum
• Moving away from this regime to a market-based model of spectrum licensing may
potentially lead to:
– more efficient and innovative use of spectrum
– flexibility to deliver content on any platform
– more appropriate pricing of spectrum
– helping to drive the conversion process
– facilitating the development of digital broadcasting multiplex operators (to provide a
delivery mechanism for multiple services)
– improved regulatory efficiency
• Commercial Radio Australia does not support the proposal to replace commercial radio
broadcasting licences with spectrum licences – argues that it would undermine the current
licence rights of broadcasting services band licence holders and disrupt existing business
models of commercial radio broadcasters
• News Limited, the Communications Alliance and the ACCC generally supported the adopting of
market-based pricing of spectrum for efficiency reasons
34
35. ‘Content Service Enterprise’
• Recommendation that regulation should apply to ‘large enterprises that provide
professional content services to significant numbers of Australians’:
– must control the professional content they deliver
– must meet a specified Australian user threshold (>500,000 Australian users
per month)
– must meet a revenue threshold ($50m revenue per annum derived from
supplying that professional content to those Australians)
• Key issue: What is “professional” content?
– e.g. YouTube video bloggers
– The Final Report indicates that the proposed definition of CSE is
targeted at large media enterprises
• Key issue: What are the appropriate user and revenue thresholds?
– Arbitrary – estimated revenue threshold currently excludes Telstra,
Google, Apple from the definition
35
36. ‘Content Service Enterprise’
Industry comments:
• Some have argued that the Report focuses more on existing traditional media
content providers, than some of the ‘new age’ media providers.
• Some have argued that the major players of tomorrow’s media landscape –
such as Google, YouTube, Apple – may not be effectively covered by the
recommendations.
• These media giants include international brands which are becoming more like
TV networks (Google TV, Apple TV, YouTube “channels” etc) – how should
these be regulated?
• Online content and internet TV services driven by exponential increases in
online advertising spends – by 2015, an estimated 31% of all advertising will be
online, 26% TV and 22% newspapers (4 May 2012, Sydney Morning Herald)
36
38. M&A opportunities – commentary
• Media analysts predict that the abolition of media-ownership restrictions recommended by the
Review is unlikely to lead to a flood of M&A activity. Unlike 2006 – CVC/Nine, KKR/Seven and
Seven/WAN
• Analysts also believe that most M&A activity could be in the radio market, primarily due to the
abolition of the “two-to-a-market” ownership test
• Buyers may target smaller operators such as Melbourne's Pacific Star Network (owner of SEN
and MyMP) and Bill Caralis's Supernetwork (Sydney's 2SM)
• James Packer's alleged intention to offload his stake in Consolidated Media, including its
part share in Foxtel and Fox Sports, will be watched closely. News is interested (back to
50% of Foxtel)
• Stokes's Seven West Media - Prime (LM out)
• Nine – CVC?
• Ten – EYE, DMG Radio (LM) & Southern Cross
• No consolidation of TV in metros even if 1 in a market rule dropped
38
40. Industry response
Free TV Australia:
• Free TV Australia (represents all Australian commercial free-to-air television
broadcasters) generally supports removal of the current numeric ownership
rules, including the 75% reach rule
• FTVA is concerned that the Review’s approach to content regulation is not as
comprehensive as the proposed changes to the management and licensing of
spectrum
• FTVA questions whether the public policy benefits of a new regime are strong
enough to warrant the costs and complexity of implementing the changes
40
41. Industry response
Foxtel:
“Foxtel is concerned that overall the Review recommends needless new
regulation that will stifle competition and innovation and does not recognise
market reality …
In particular, the recommendation for a new regulator with broad powers to
rule on media ownership and content competition in addition to the powers
of the ACCC would create uncertainty and cost-wasteful red tape for both
government and industry.”
(1 May 2012, Mediaweek)
41
42. Industry response
News Limited:
• Generally rejects the basis for the proposed new regulatory framework
• The Final Report suffers from 4 serious flaws:
• It recommends more heavy-handed regulation
• The proposed regulations are too subjective and imprecisely defined
• It recommends increasing regulation on traditional media companies
with additional ownership rules, content competition rules, Australian
content rules and press complaint rules
• It excludes from regulation some powerful companies who compete
against traditional media companies today
42
43. Industry response
Network Ten:
• Disappointed in the recommendations contained in the Final Report as it
claims the document places more burdens on the already over-regulated free-
to-air television industry
• Believes the proposed higher content quotas and creation of a new media
regulator is unnecessary and arbitrary
(1 May 2012, Mediaweek)
43
45. Key points (report)
1. New convergent approach to broadcasting, media and content regulation.
2. Broadcasting licences replaced by wider generic concept of ‘Content Service
Enterprise’ that is defined based on a user and revenue threshold.
3. Establishment of a new Communications Regulator to replace ACMA, with broad
powers and functions, including concurrent jurisdiction with the ACCC.
4. Media ownership reforms (Nick will discuss these in detail)
5. Updating of National Classification Scheme.
6. Creation of ‘News Standards Body’ to replace News Media Council, coupled with threat
to create a statutory body if industry self-regulation does not work.
7. Replacement of Australian screen content quotas with Uniform Content Scheme
requiring financial contributions by Content Service Enterprises to local content.
8. Update of Australian radio content quotas, local content quotas and ABC/SBS charters.
9. Replacement of broadcasting apparatus licensing with 15 year spectrum licensing.
10. Three stage approach to implementation.
45
46. Key points (practical application)
1. Proposal to replace the current media ownership rules with a “minimum number
of owners” rule and a public interest test
2. Market-based approach to pricing spectrum recommended to replace
broadcasting licence fees
3. Issues with proposed meaning of “Content Service Enterprise” being tied to
arbitrary benchmarks, including 500,000 users and $50 million revenue.
4. Analysts predict the Review will not result in an upsurge of M&A activity due to
major players’ lack of capacity to buy
5. The recommendations do not significantly impact major international players
which are looking to offer online services similar to traditional TV network
services
6. Although industry consensus was achieved on matters of general principle,
industry opinion diverged on the details of how to best achieve maximisation of
public benefit from spectrum allocation
7. When will it get to be law? Government has not committed to a date for its
response.
46
47. TELECOMMUNICATIONS, MEDIA AND TECHNOLOGY
The Impact of the Convergence Review
Dr Martyn Taylor
Partner
martyn.taylor@nortonrose.com
Nick Abrahams
Partner
nick.abrahams@nortonrose.com
10 May 2012
47