Court rules in favour of Telstra in outdoor advertising dispute

Large digital advertisements on Telstra payphones have been deemed lawful by the Federal Court of Australia.

Melbourne City Council and Telstra had been locked in a legal dispute over the digital out-of-home displays, with the council claiming Telstra’s new payphone units – and their accompanying digital ad units – were not “low impact”, and thus should not be exempt from local regulations.

An example of the new Telstra payphone unit, as shown in the Court’s ruling

The new proposed units are fitted with 75-inch LCD screens, are 2.7 metres high and 1.2 metres wide – 600mm taller and 400mm wider than older-style booths.

The City of Melbourne had referred Telstra and JC Decaux’s new phone booths to the Victorian Civil and Administrative Tribunal. Telstra, in turn, then took the City of Melbourne to the Federal Court in a bid to settle the dispute on a more national and comprehensive level.

Soon after, the City of Sydney resolved to lobby politicians and regulators over the telco’s plans.

And after exploring its legal options, it filed an application to join the battle for control of some of Australia’s most prominent outdoor advertising spaces.

At the time, the City of Sydney said the large-format ads attached to payphones will increase clutter on cities’ footpaths at a time when councils are working to reduce it, and claimed the installations negatively impact pedestrians and businesses.

It also questioned why Telstra would be increasing the number of public payphones, when it’s well known consumers are utilising them less, and their availability had previously been scaled back.

In addition, it’s understood the ads on Telstra’s payphones could significantly reduce the income councils could generate from advertising on their own outdoor street furniture assets.

The back of the new payphone unit as demonstrated in the Court’s ruling

In yesterday’s ruling, however, the Court ruled that the installations were “low-impact” facilities – a blow for Melbourne City Council, as well as the City of Sydney and Brisbane City Council, which had also joined the action.

The issue at play was whether the ‘New Payphone Cabinets’ were indeed primarily payphones, and thus exempt from local regulations, or if, as the councils contended, Telstra was “impermissibly endeavouring to invoke statutory provisions relating to public payphones in order to erect structures that they say more closely resemble electronic billboards or ‘digital street furniture'”.

According to the court, the councils’ case rested on the idea that the advertising on the payphones stripped the cabinets of their categorisation as a “low-impact” facility.

“The Councils’ case in that regard is, with respect, an improbable one,” the court ruled, “and it derives no support from the language of the Telecommunication Act or the Determination. The court also accepted Telstra’s submission that advertising is either a content service or a carriage service”, meaning that the accompanying advertising does not automatically rule it out from being “low impact”.

As such, the 81 planning applications made by Telstra in the Melbourne City Council area are indeed, for ‘low-impact facilities’, the court ruled, and thus do not need the consent of the local council to be installed.

Telstra must, however, seek council approval for third-party advertising. They can, for now, only advertise their own services.

The City of Sydney told Mumbrella it was “disappointed” with the Federal Court’s decision to rule in favour of Telstra’s application.

“The City of Sydney, along with City of Melbourne and Brisbane City Council, opposed moves by Telstra for these enlarged payphones to be permitted on our streets without consultation with, or approval from, local authorities. Thankfully, the court confirmed that Telstra will still require development consent to use its enlarged telephone boxes for commercial advertising,” a spokesperson said.

Lord Mayor Clover Moore said the payphone units were a “Trojan Horse” for advertising”.

“Telstra has removed payphones from other areas across the country, publicly citing a lack of use. Installing new payphones in the CBD is not about providing equitable access, it is a Trojan Horse for advertising.

“Thankfully, the court’s decision does not give Telstra freedom to use the panels for commercial advertising at will. During proceedings, Telstra conceded they would need our consent for such advertising, so we’re hopeful Telstra now reconsiders the size and amount of digital screen payphones it chooses to roll-out across the City.”

She noted the council’s main concern was increased clutter on footpaths, particularly when the number of pedestrians is growing.

“It’s estimated that 1.3m people are in our city on an average weekday. By 2036 this number is forecast to reach 1.7m and by 2050, could be as high as 2m. “It is outrageous that a private corporation is allowed to unilaterally take over valuable public land for large digital advertising displays. “The community is sick of essential infrastructure companies using their planning powers to run roughshod over our footpaths.

“Installing new payphones in the middle of already crowded CBD footpaths is a craven attempt to install billboards that can be on-sold for profit. “We are working to decrease clutter and make the City more easily navigated by pedestrians. Installing large commercial advertising panels makes a mockery of our efforts and will make life harder for the increasing number of people who move around our city every day.

“When I wrote to Federal Communications Minister Paul Fletcher about our case, he advised me that he couldn’t comment while legal proceedings took place. I now call on the Minister to remove these outdated powers, and amend the Telecommunications Act to protect the limited public spaces in our cities.”

The City of Sydney said it is reviewing the Federal Court’s decision.


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