Whitepaper hints at openness to changing reach rule



A new Federal Government whitepaper on media ownership and control has left the door open to major changes in media regulation in Australia, including the removal of the ‘reach rule’ that prevents a TV network from having a potential audience more than 75 per cent of the population.

The move is the first step towards media consolidation among the major media owners, with television networks Nine and Ten, who are eyeing potential merger with their regional counterparts, having long  argued that the rule is no longer appropriate for the modern media environment.

“The government’s paper confirms that the current media control and ownership rules belong to the last century,” said Hamish McLennan, CEO of Ten.

“They are outdated, ineffective and anti-competitive. They prevent homegrown media companies from competing with online behemoths whose growing global dominance is unfettered by regulation, or local tax laws. They inhibit local players from truly taking on the internet giants in this market. They also prevent commercial media companies from growing as the ABC is allowed to do across multiple platforms.” The 78 page whitepaper canvases a number of media reform options including the reach rule and also regulations around the licences a company can hold.

The simplest option for regulatory reform would be to remove one or more of the  existing control rules.

“The analysis… examines the possible implications of removing each of the control rules in isolation, although consideration is given to the impact of the remaining rules where relevant,” says the whitepaper, while also emphasising the role of the Australian Consumer Competition Commission in an potential merger.

“It should be stressed that the ACCC’s ongoing role in  assessing mergers may result in some transactions permitted by the repeal of sector-specific control rules being prevented on competition grounds.

As noted previously, the ACCC has demonstrated that it will act to prevent particular transactions  in the media where they would substantially lessen competition in any relevant media market.

“Nine welcomes the report and notes there was a bipartisan report from the last parliament unanimously recommending the removal of the reach rule,” said a Nine spokesman.

“We believe removal of the rule is critical to the future of broadcasting and regional broadcasting in particular, and we will work with government throughout their consultation process.”

Ten cited recent job losses at the network as a reason for the need for reform.

“The paper recognises the financial headwinds that Australia’s news organisations are facing and which are resulting in heavy job losses in newsrooms across the industry, including at Ten Network, Seven Network and Fairfax Media. These job losses underline the urgent need to fix the media sector’s discriminatory regulatory settings,” said the TV network in a statement.

Seven has reportedly been reluctant to endorse the changes, and did not comment except to express surprise at their inclusion in the Ten media release following their announcement of 10 redundancies earlier this week. 

The network has previously been resistant to the removal of the reach rule. “We are enigmatic and polite in our silence,” said a Seven spokesman. “We’re still working out how and why we got lumped into Ten’s release.”

Nic Christensen


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