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Government confirms media reforms including abolition of reach rule and two-thirds rule

The Coalition Government has today confirmed it will move to abolish both the ‘reach’ rule and ‘two out of three’ ownership rule, but has announced “new and higher” local content protections.

Mitch Fifield

Fifield: “Obviously the environment has changed dramatically.”

In a press conference this afternoon, Communications Minister Mitch Fifield confirmed that he would be presenting to parliament a media reform package tomorrow that will likely pave the way for a wave of media mergers and acquisitions.

While the abolition of the ‘reach rule and ‘two out of three rule’ had been expected; however, the new local content rules come after pressure from National and rural Liberal MPs who were concerned the impact of the reforms on regional stations.

Fifield has signalled that the government will also seek to have the laws passed before the upcoming Federal election, telling journalists: “I am aiming to have this legislation passed before the parliament before the election. Absolutely.”

The government has been under sustained pressure over much of past year to pursue media reform, particularly from regional broadcast players such as Prime, Win and Southern Cross Austereo who are eager for the laws to change to allow them to merge with their metropolitan affiliates.

While the abolition of the ‘reach’ rule is relatively uncontroversial the abolition of the ‘two out of three rule’ will likely be more hotly contested, with Labor unclear about whether it will support the change.

Asked today if he would be willing to split the package to ensure passage of the reach rule, Fifield indicated the Coalition would pursue the changes as a package.

“We will be introducing this package into parliament tomorrow,” Fifield said, “… and as a government we self-refer the whole package to the Senate Communications and Environment committee. It is important that it is looked at as a whole package and it is my intention to secure passage as a whole package.”

Under the new laws the Australian Competition and Consumer Commission (ACCC) will retain its powers to scrutinise mergers and acquisitions.

On local content protections, currently the Government uses a points system to ensure that larger regional communities have access to local content.

These laws currently govern regional Queensland, northern and southern New South Wales, regional Victoria and Tasmania where broadcasters must produce at least 720 points of local content per six-week period with each minute worth one point – two points if it is local news.

The new changes will increase the required amount of local content points to 900 following a ‘trigger event’, or a change in control of a regional commercial television licence, which results in it being part of a group in which the population under a combined licence area exceeds 75% of the Australian population.

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Fifield also signalled that the government had been won over by a campaign for cuts to the licence fees of TV and radio operators but that this would be handled in the budget.

“In relation to licence fees we have indicated that free-to-air TV and commercial radio licence fees will be looked at in the context of the budget,” he said.

“We have recognised the arguments of the free-to-airs and commercial radio that these licence fees were established when TV and radio essentially had a monopoly… the second reading speech used words to the effect of, ‘this is a super-profits tax’.

“Obviously the environment has changed dramatically.”

The move has been welcomed by some media players.

Ten Network chief executive, Paul Anderson, said in a statement: “Removing these archaic media laws is an important first step in dismantling a set of rules that are making Australian media companies less competitive in a global, converged media market.

“Ten Network is now competing directly for viewers and advertisers against large, global internet companies that are exempt from local media regulation, don’t pay television licence fees and pay minimal corporate tax despite taking billions in advertising revenue in this market; and, in some cases, don’t have a single local employee.

Nic Christensen 

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