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ABC and SBS cleared by government’s commercial neutrality review

ABC and SBS are complying with their competitive neutrality requirements, but both should be more open about their commercial activities, a government review has found.

According to the government inquiry report into the competitive neutrality of Australia’s national broadcasters released yesterday, national broadcasters have adapted to change by extending  services, and have taken advantage of market developments and technological innovation. There is also no evidence they are not appropriately allocating costs, it ruled.

ABC and SBS are operating within competitive neutrality guidelines

The Panel also said there was nothing in the broadcasters’ charters, or in general principles of competitive neutrality, which prevented SBS and ABC from promoting their services online, adding the national broadcasters decisions were in the public interest so long as they were endorsed by the Boards and were subject to parliamentary review.

“The issues raised reflect increased competition generally in the digital space whether streaming services or online news services,” the report said.

“They also reflect a context of increased viewer demands and expectation along with the rapid take-up of new technologies. As stated above, as long as the National Broadcasters are within their Charters then, by definition, the activity is in the public interest. However, the Charters of both National Broadcasters are broad and open to interpretation by the Boards.

“In relation to the matters under review by this Inquiry, both National Broadcasters would benefit from more public transparency around how they approach the issues of fair competition.  Accountability is difficult, especially as there is no opportunity for Charter complaints to be addressed.”

SBS and ABC both welcomed the report

The Panel also referred issues with regulation and licensing for radio broadcasters to the Department for consideration. It said the inquiry and Content Review had not addressed issues raised by commercial radio.

“As identified by the Ernst & Young Report, there are a number of areas where the ABC could improve its approach to cost allocation and pricing to enhance transparency and give greater confidence that its costing and pricing practices are aligned with competitive neutrality principles,” it added.

“The National Broadcasters’ processes for commercial business activities appear adequate. However, changes should be made to ensure that there are processes in place for improved transparency, accountability and reporting.”

Other considerations include a statement of intentions covering how national broadcasters should spend funds, and an improvement in reporting of Charter performance.

“The Panel is of the view that appropriate guidance from the Board would give some substance to the ABC’s Charter obligation to take account of commercial broadcasters. While SBS has no equivalent Charter obligation, there seems no reason why the SBS Board should not pursue similar benefits for the market,” it said.

“The Panel recommends that government considers options, drawing on the UK example, to give a longer term framework for the funding of the National Broadcasters, accompanied by increased transparency and accountability to the benefit of consumers and competition more broadly.

All findings follow than 6,800 submissions were made to the inquiry, by various broadcasters, publishers, stakeholders and the public. The government inquiry came from a deal made by Communications Minister Mitch Fifield with One Nation’s Pauline Hanson, to get the media ownership law changes over the line.

“The panel recognised all media organisations are operating in an environment of heightened competitive pressure, driven by changes in the way audiences engage and the entry of global companies into the Australian media market,” Fifield said.

“It is now up to the national broadcasters to act on these recommendations,” he said.

Both national broadcasters welcomed the report.

“We are pleased that the Inquiry positively reflects the seriousness with which SBS takes its obligations as a public broadcaster, and the diligence we apply to our operations,” a spokesperson for SBS said.

Fifield: It is now up to the national broadcasters to act on these recommendation

“As the terms of reference noted, competitive neutrality principles do not imply that government organisations cannot successfully compete with private businesses. SBS is engaging more Australians than ever before as a result of a well-defined strategy, content audiences won’t find anywhere else and efficient operations, all in service of the SBS Charter.

“SBS will now consider the panel’s findings and recommendations released today in detail.”

An ABC spokesperson added: “Recognising that the ABC should be able to adapt to new and emerging technology and audience behaviours, the independent expert panel agreed that the ABC is operating in the public interest and in line with its Charter.

“The report also found that increasing competitive pressure on domestic media operators is likely to come from international companies, which may lead to further market consolidation such as the Fairfax/Nine Entertainment merger.

“The ABC Board and management will consider the recommendations in more detail and respond at a later date.

However Free TV CEO, Bridget Fair, who represents the interests of all free to air broadcasters, welcomed the conclusion that changes should be made to transparency, but said she was disappointed the Panel hadn’t recommended specific changes to the regulatory regimes applying to ABC and SBS and the commercial broadcasters, Nine, Seven and Ten.

“Given that regulatory neutrality is a central tenet of competitive neutrality, we would have expected to see a more detailed consideration of these issues within the Panel’s report,” Fair said.

“In Free TV’s original submission, we proposed a new regulatory oversight model based on one already operating in the UK with respect to the BBC. This model has provided greater transparency around BBC investment decisions, without negatively impacting on its day-to-day operations.  We believe this approach is worthy of further consideration.

“We have consistently said that we stand with all Australians who want strong, vibrant and distinctive national broadcasters. However, we do not believe the Panel gave sufficient weight to the evidence provided by the commercial sector of competitive neutrality issues associated with recent investment and programming decisions of the ABC and SBS.”

Shadow minister for communications, Michelle Rowland, said the report was a waste of money.

“This Liberal fishing expedition splashed half a million dollars of taxpayer funds to establish what the ABC and SBS have said all along: The national broadcasters are operating in a manner consistent with the general principles of competitive neutrality,” Rowland said.

“Australians trust and value the ABC and SBS and should not have to foot the bill for Mitch Fifield and Pauline Hanson’s vendetta against public broadcasting.”

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