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Media ownership Fact Sheet

INTRODUCTION

Ownership and control of the media in Australia is regulated by several acts. Commercial television, commercial radio, and newspapers are the main focus of media ownership issues. Different rules apply to the three categories.

In October of 2006 the Commonwealth Government enacted the Broadcasting Services Amendment (Media Ownership) Act 2006 (Cth),which significantly altered the laws with respect to media ownership and control. These changes finally came into effect on 4 April 2006. The changes can be said to have relaxed the restrictions on media ownership imposed by the Broadcasting Services Act 1992 (Cth), particularly those imposed on foreign ownership.

Broadly, there are three main pieces of legislation which act to regulate media ownership:

  • the Broadcasting Services Act 1992 (Cth) (BCA), which regulates ownership and control of commercial television and radio broadcasters that use broadcasting service bands;
  • the Trade Practices Act 1974 (Cth) (TPA), which regulates activities of Australian corporations to prevent anti-competitive conduct and to ensure that the interests and welfare of consumers are adequately protected; and
  • the Foreign Acquisitions and Takeovers Act 1975 (Cth), which regulates the acquisition of Australian property and businesses by foreigners.

The main bodies involved in the regulation of media ownership are:

  • the Australian Communications and Media Authority (ACMA), which administers the Broadcasting Services Act 1992 and is responsible for the regulation of broadcasting and;
  • the Australian Consumer and Competition Commission (ACCC) which is responsible for promoting competition and fair trade in the market place and who administers the Trade Practices Act 1974; and
  • the Foreign Investment Review Board, which examines proposals by foreign interests for investment in Australia and makes recommendations to the Government on those proposals.

LIMITS ON LOCAL MEDIA OWNERSHIP

The Broadcasting Services Act 1992 (Cth)

The BSA imposes two main types of control on media ownership. These are:

  • statutory control rules; and
  • media diversity rules.

Statutory Control Rules

The statutory control rules are contained in Part 5 of the BSA. Many of the rules contain the term ‘licence area’. Under the BSA ‘licence areas’ are determined by ACMA using ‘licence area plans’, which are available on their website.

Briefly, the main restrictions imposed by the statutory rules are:

  1. A person cannot be in a position to exercise control of commercial television broadcasting licences whose combined licence area populations exceed 75% of the population of Australia;
  2. A person cannot be in a position to exercise control of more than one commercial television broadcasting licence or 2 commercial radio broadcasting licences in the same licence area
  3. In respect of commmercial television licences a person cannot:
    1. be a director of a company or companies that are, between them, in a position to exercise control of commercial television broadcasting licences whose combined licence area populations exceed 75% of the population of Australia;
    2. be a director of two companies that are both in a position to exercise control of commercial television broadcast licences in the same licence area;
    3. be a in a position to exercise control of a commercial television broadcasting licence and a director of a company that is in a position to exercise control of another commercial television broadcasting licence, where the licences are in the same licence area;
  4. In respect of commercial radio broadcasting licences a person cannot be:
    1. a director of a company that is, or of 2 or more companies that are, between them, in a position to exercise control of more than 2 commercial radio broadcasting licences in the same licence area;
    2. a director of a company that is, or of 2 or more companies that are, between them, in a position to exercise control of 2 commercial radio broadcasting licences in a licence area and in a position to exercise control of another commercial radio broadcasting licence in the same licence area; or
    3. in a position to exercise control of 2 commercial radio broadcasting licences in a licence area and a director of a company that is in a position to exercise control of another commercial radio broadcasting licence in the same licence area.

Media Diversity Rules

The media diversity rules are also contained in Part 5 of the BSA. These rules prohibit unacceptable media diversity situations, and unacceptable three-way control.

Unacceptable Media Diversity Situation

The BSA prohibits what it defines as unacceptable media diversity situations.

An unacceptable media diversity situation will exist in a metropolitan licence area (basically a State capital city) of a commercial radio broadcasting licence if the number of 'points' in the radio licence area is less than five. An unacceptable media diversity situation will exist in a regional licence area of a commercial radio broadcasting licence if the number of 'points' in the radio licence area is less than four.

The number of points within the licence area is calculated in accordance with the table contained in s 61AC of the BSA. Briefly, this sections assigns a point for each 'media operator', or media group operating in the area.

The main effect of these provisions is that transactions must not result in less than five independent and separately controlled 'media operators' or media groups in a metropolitan licence area, and four in a regional area.

Unacceptable three-way control

Transactions that result in an unacceptable three-way control situation are prohibited under the BSA.

An unacceptable three-way control situation exists in relation to a licence area of a commercial radio broadcasting licence (the first radio licence area ) if a person is in a position to exercise control of:

  • a commercial television broadcasting licence, where more than 50% of the licence area population of the first radio licence area is attributable to the licence area of the commercial television broadcasting licence; and
  • a commercial radio broadcasting licence, where the licence area of the commercial radio broadcasting licence is, or is the same as, the first radio licence area; and
  • a newspaper that is associated with the first radio licence area.

The Trade Practices Act 1974 (Cth)

Aspects of media ownership and control which are not covered by the BSA may still be regulated by the TPA. Section 50 of the TPA probably has the greatest potential to impact upon media ownership.

Briefly s 50 of the TPA prevents mergers that would have the effect, or be likely to have the effect of substantially lessening competition in a market.

Foreign ownership limits

Prior to the enactment of the Broadcasting Services Amendment (Media Ownership) Act 2006 (Cth) the BSA contained a number of provisions that specifically applied to foreign ownership of commercial television broadcasting services. However, the BSA no longer contains any provisions restricting foreign ownership. Instead the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FATA”) and Australia’s Foreign Investment Policy regulate foreign ownership of the Australian media. In General, the Treasurer has the power to stop substantial acquisitions of Australian assets which are contrary to the national interest.

From 1993 to 2006 Australia’s Foreign Investment Policy contained a limit on the permitted foreign investment in newspapers. However, these limits were removed when the changes to the BSA were introduced. Now the media is simply treated as a sensitive sector by Australia's Foreign Investment Policy. As a result all non-portfolio foreign investment proposals, and portfolio foreign investments of more than 5% in the media sector must be notified to the Government for prior approval.

For more detailed information on media ownership please see the following resources.

Legislation
Broadcasting Services Act 1992
BROADCASTING SERVICES AMENDMENT (MEDIA OWNERSHIP) BILL 2002
Foreign Acquisitions and Takeovers Act 1975
Trade Practices Act 1974

Other Resources
ACMA - Home page
Australian Competition and Consumer Commission
National Compeititon Council
Australia's Foreign Investment Policy
FIRB