Q&A with new communications minister Paul Fletcher

New communications minister Paul Fletcher has been given a challenging role as the media industry continues to face massive changes and compete with the global online giants. As the re-elected government deals with the effects of its media reforms and prepares for the release of the ACCC digital platforms review, Mumbrella's Paul Wallbank sat down for a cup of coffee with the minister for his view on the industry and the challenges in his portfolio.

With incumbent minister Mitch Fifield stepping down after the last election, Paul Fletcher’s appointment as minister was greeted by wide acclaim by industry bodies, so Mumbrella took the earliest opportunity to chat with the minister about his priorities following his predecessor’s changes to the industry and the looming digital platforms report.

Fletcher has served a long apprenticeship on his path to his current role, having served as an advisor to Howard-era communications minister Richard Alston in the late 1990s before joining Optus as director of corporate and regulatory affairs in 2000.

The NBN, cyber safety and a vibrant local media industry are among the priorities for new communications minster, Paul Fletcher

On being elected to the safe Liberal seat, Fletcher sat on Parliamentary committees covering fields including cyber-safety, infrastructure and communications until he was appointed as Parliamentary secretary to then comms minister, Malcolm Turnbull, following the party’s 2013 election victory.

Mumbrella managed to catch up with the minister over a coffee downstairs from his office in downtown Sydney.

So what are your main priorities as communications minister?

Well look there’s certainly a number of priorities completing the rollout of the National Broadband Network. We’ve come a very long way [from] when we came to government in 2013.

Our predecessors had managed to connect barely 50,000 premises to the fixed network. It’s now over 5m premises connected and over 8m premises able to connect. And we’re on track to get the rollout completed next year – finishing the rollout is going forward.

One of the other priorities is maintaining a vigorous and vibrant media sector. That’s ultimately a matter for management teams, boards and shareholders, but clearly regulatory settings can impact that, so it is important, I think, to have the principle of competitive neutrality to the maximum extent possible, particularly when you have global internet giants with very substantial market positions in the Australian market.

So we have to think about competitive neutrality between those businesses and more traditional media businesses. These are some of the factors that the digital platforms review being carried out that the ACCC is having a look at. The draft report excited a lot of discussion and we’re looking forward to receiving the final report probably at some point next month.

Another priority is online safety, cyber safety – the Prime Minister has put cyber safety with the title of this portfolio for a clear reason – and the observation I’d make is that if you look at the way the internet has evolved over 25 years, 25 years ago it was almost an exclusive club for academics and researchers, but for quite a long time now the internet has been a mass-market consuming-consumer phenomenon with billions of people around the world.

Therefore, when people engage in the public square, whether it’s online or offline, they expect the public square will be regulated that there will be safety mechanisms. This was a key principle of the declaration in a recent G20 meeting.

One of the major ways in which public policy-thinking about the internet has evolved is that 25 years ago people wouldn’t have envisaged that the internet would be a technology platform over which a number of businesses would build extremely large global market positions giving them enormous economies of scale and giving them huge brands which can be leveraged from market to market to market.

On a slightly different topic, what is the future for the regional and small publishers’ innovation fund?

Well certainly that’s an ongoing commitment of our government. There have been some funding rounds already, and the direction we’ve committed to it certainly is continuing.

One of the priorities of the previous communications minister, Mitch Fifield, was getting the government’s changes to media ownership laws passed. When he achieved that at the end of 2017, we expected a wave of mergers, but beyond the Nine-Fairfax deal, very little has happened. What do you put that down to?

Well ultimately these are commercial decisions for shareholders, boards and management teams.

The Nine-Fairfax transaction has obviously been very very significant. Economists would say that sometimes businesses look for economies of scale – that’s to say having more customers in the same line of business. Sometimes businesses look for economies of scope – that’s to say having more products and delivering them to a broader set of customers.

It’s true that much of the thinking about what the media reforms might do was to stimulate reform or stimulate transactions designed to secure economies of scale, as it turns out the focus has more been on economies of scope.

But I think they can both be seen as responses to the competitive pressures and the technological changes that the media sector is exposed to.

In our view in making those reforms, and I do want to acknowledge what a material reform it was and what a mighty effort that Mitch Fifield put in to secure those reforms, backed very strongly of course by then Prime Minister Turnbull, they rightly made it a focus. So far the signs have been encouraging but I think ultimately private sector businesses stand or fall on their own efforts. Private sector owners invest capital, they take a risk and if they make their judgments right they get a good return. But there is a public policy interest in having a strong and vibrant media sector. So to the extent that private sector businesses are able to make judgments that lead to their media businesses being more vibrant … I think [that will be] welcomed and I think we have seen that. With the Nine-Fairfax transaction and in the broader view I think the policy direction of removing outdated regulation when it came to the ownership of media was was the right thing to do.

Over your, and my, 20 years in the industry, one of the constant buzzwords has been ‘convergence’ – the idea that telcos, broadcasters and content makers would become one. Do you see the successes of your old employer Optus with its Premier League coverage and its forays into content as that convergence finally happening?

It’s a very interesting question. The conventional wisdom, again going back 20 years, really was the telcos were not very good at content.

So the debate has always been framed, as well the decision has always been framed, as a content versus carriage decision and, if you look at the efforts made by telcos in Australia and globally in the ’90s and in the first decade of this century, to generate content businesses there was not a lot of success achieved.

The Optus experience with Premier League football now appears to be gaining real traction. What is clear is that the conduits by which you can reach the customer, a viewer, or listener, or subscriber are very diverse, much more diverse than they were 20 years ago.

Models are still evolving as to how people put different offerings together. I have to say as a former telco executive and somebody with a real passion for telcos that it’s good to see telcos having a go and having some success in the content space, it’s a fiercely contested space.

The only thing I’m prepared to predict is we’re going to continue to see innovation, we’re going to continue to see people coming at this from a whole range of different angles.


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