Chapter Six_phd_terry Flew

232

Chapter Six New Services, New Policies? Neo-Liberal Policy Discourse and the Broadcasting Services Act 1992

The late 1980s and early 1990s marked a transitional period in the politics of media reform in Australia. In the period prior to the late 1980s, the politics of media reform largely revolved around the scope to extend the social contract, or for greater social regulation of private broadcast media resources, particularly in the areas of public participation and accountability, Australian content requirements and children’s programming. From the late 1980s, however, new issues entered the policy domain, such as the implications of microeconomic reform and competition policy, the scope for integrating media policy into broad national cultural policy frameworks, and the implications of international law and trade agreements for domestic policy-making.

Broadcasting Policy and Microeconomic Reform

The reform of broadcasting policy in Australia was part of the ‘microeconomic reform’ agenda, identified as a priority by the third Hawke Labor government (1987-90), with the Department of Transport and Communications (DOTAC) being one of a number of so-called ‘super-departments’ created in this period. DOTAC identified its purpose as being to ‘support the restructuring and

233 growth of the Australian economy by accelerating change towards a transport and communications sector which is competitive, innovative, and efficient’ (DOTAC 1988). The Department’s portfolio included a disparate range of activities, such as aviation, road and rail transport, shipping, telecommunications, broadcasting and spectrum management. Significantly, many of these areas had been characterised either by monopoly public ownership, or by what Robert Horwitz (1989) has described as ‘price-and-entry’ regulatory controls, where an industry-specific regulator established administrative mechanisms for price-setting, and limited competition in order to ensure stability in the provision of basic infrastructure for other sectors of the economy.

The growing significance of microeconomic reform in Australia arose from the perception that, in spite of the government’s significant tightening of fiscal, monetary and incomes policies in the mid-1980s, the economy had not restructured sufficiently to overcome balance-of payments constraints, pointing to a need for ‘continued progress at the microeconomic level to improve efficiency and increase supply responsiveness’ (OECD 1988: 9; cf. OECD 1990). Microeconomic reform was defined as being ‘about making markets work better, improving incentives, and enhancing the effectiveness of government operations’ (EPAC 1990: 3). Microeconomic reform was also bound up with public sector reform, partly because it created pressures for the corporatisation or privatisation of government business enterprises (GBEs), linked to changes to Commonwealth administration associated with the growing influence of ‘new public management’

234 practices and discourses derived from the private sector (Halligan et. al. 1992; cf. Hughes 1994).

An important factor that stimulated change in broadcasting policy was the transformation of telecommunications in the context of convergence. It became increasingly apparent through the 1980s that telecommunications was central to information-based economies, and that the traditional model of public monopolies or highly regulated private providers providing broadly equitable access to a plain old telephone service (POTS) was becoming increasingly untenable in light of technological changes and changes in consumer demand (Westerway 1990). As a consequence, governments throughout the world were rethinking the bases of telecommunications regulation, as a shift towards competition, value-added services such as mobile telephony and economy-wide expectations about the quality of communications infrastructure took place (Collins and Murroni 1996). The shift in policy away from restricting competition in order to achieve a series of trade-offs between various categories of telecommunications users in the ‘public interest’, to policies designed to promote competition and network development, would impact upon broadcasting policy in the course of the 1980s and 1990s.

A difficulty with microeconomic reform as a general category, as Michael Stutchbury noted, was that it ‘was as general as it was new in the Australian policy lexicon’, and ‘could be applied to any policy measures aimed at improving

235 the nuts-and-bolts efficiency of the economy in supplying goods and services’ (Stutchbury 1990: 70). Of the various portfolio areas within DOTAC, the area with which broadcasting had its greatest affinities was telecommunications. Both sectors involve the provision of infrastructure that is ‘not only is crucial for commerce, but also constitutes the public realm of ideas and discussion’ (Horwitz 1989: 8); both had a history of restrictions on competition in order to achieve policy trade offs, such as cross-subsidies to benefit rural and domestic users; and both had experienced great change in their means of carriage and the types of services that could be delivered as a result of digitisation and technological convergence.

To observe the similarities between broadcasting and telecommunications is, however, also to draw attention to their differences. First, broadcasting has not had the same centrality to national economic performance as telecommunications, as the latter activity is tied up with provision of a networked information infrastructure. Second, public broadcasters such as the ABC and SBS do not have a comparable status as GBEs to a telecommunications common carrier such as Telecom, nor do they have such a dominant role in the sector. Broadcasting in Australia had been an area dominated by the private sector and the logic of market competition, mitigated by government regulation, in a way not comparable to the public monopoly status of Telecom. Finally, much of what took place in broadcasting regulation and broadcast media policy was difficult to fit into the general ambit of microeconomic reform. Davis (1990) notes that generating good

236 relations with media proprietors was as much a part of media policy under the Hawke Labor government as questions of governance, and the government’s reforms of media ownership regulations in 1987 were not particularly related to competition policy principles. Moreover, primary responsibility for regulation continued to rest with the Australian Broadcasting Tribunal, as an independent statutory body whose key activities were linked more to ‘public trust’ conceptions of media policy than microeconomic reform priorities.

DOTAC and the New Policy Discourse

A focus on the economic dimensions of broadcasting policy was not a unique development resulting from the establishment of DOTAC. Its predecessor, the Department of Communications, had commissioned work into economic aspects of communications, and there had been moves to enhance competition in nonbasic telecommunications services markets since the Davidson Report recommended greater competition in 1982 (Given and Goggin 2000). What was unique, however, was the consistency of DOTAC’s economic focus, and its attempts to align broadcasting policy to a whole-of-department approach which was about ‘promoting greater industry competition to improve efficiency in a framework where the benefits can be passed on to users’, and ‘adopting regulatory arrangements by which competitive structures are supported … [and] industries are able to take full advantage of technological change’ (DOTAC 1992: iii). DOTAC was particularly concerned with the separation of structural

237 regulation, or the conditions governing entry into the broadcasting sector, from program or content regulation. It was also concerned with the development of new broadcasting services in order to increase diversity in the broadcasting system.

Rather than understanding ‘public interest’ regulation of broadcaster conduct, program content and program standards as being the necessary quid pro quo for the ownership by a few of a scarce public resource (spectrum space) and a highly influential communications medium, it was argued that in various DOTAC documents that concentration of ownership and broadcaster influence were the consequence of the regulatory structure itself, as it created artificially high barriers to entry for potential new competitors. The Review of Broadcasting Regulation: Discussion Paper (DOTAC 1989a) indicated the change in emphasis, and its implications for broadcasting regulation. The Review identified a series of problems with the Broadcasting Act 1942, including: its difficulties in being adapted for the development of new services or new delivery technologies; the complex and inflexible nature of the legislation; the time, resources and legal input involved in relatively minor regulatory matters; and the incapacity of the Australian Broadcasting Tribunal to develop mechanisms to ensure regulatory compliance, in spite of its apparently extensive discretionary powers able to be applied in the licence renewal process. Of these, the question of new technologies and new services had the greatest significance in the Review. It was argued that regulation of content needed to be dealt with separately to regulation of

238 technologies of delivery, since distinctions between services and their content on the basis of their delivery technology would become less relevant in the context of convergence. A similar set of policy emphases could also be seen in DOTAC’s report on the introduction of pay television in Australia (DOTAC 1989b). This report argued for a regulatory approach based upon promoting competition and reducing barriers to entry. It was argued that the outcome of such pro-competition policies would be the expansion of channels and services, that would produce both greater diversity of content and consumer choice that would ‘increase the power of the viewer to influence programming’ (DOTAC 1989b: xvii).

Observers of the Department in this period believed that it had a strongly interventionist agenda for broadcasting policy, and that its emphasis was upon a generic program of microeconomic reform rather than the specifics of the broadcasting industry. Anne Britton, National Secretary of the MEAA at this time, believed that the Broadcasting Services Act 1992 was essentially designed ‘to make the networks very happy’, and that it was also consistent with the positions of key individuals in the Department who favoured ‘a very hands-off broadcasting regime’.1

Christina

Spurgeon,

who

was

then

a

researcher

with

the

Communications Law Centre, recalled the personal realisation in 1990 that the review of broadcasting legislation was not simply ‘about tidying up a cumbersome piece of legislation’, but rather ‘about repealing the public trust model of regulation’.

2

Jock Given noted that the clear agenda of key people in

DOTAC, combined with high turnover of Ministers in this period, enabled

239 significant policy entrepreneurship where key individuals could ‘drive through quite radical reform of the legislation … in a very short period of time’, during a period when ‘there was not a lot of competition around for other ideas’. 3 Tony Shaw has questioned the degree to which policy bureaucrats could acquire such control, partly because decision-making powers finally rest with the relevant Minister, Cabinet and the Parliament, but also because of accountability processes ‘which hardly give bureaucrats much chance of influencing outcomes in a nontransparent fashion’.4 By contrast, Anne Britton claimed that, due to the complexity of the issues involved, ‘the bureaucrats in the Department were very powerful’, and that Ministers at the time ‘basically delivered what the bureaucrats in the Department of Transport and Communications dished up’.5 Such observations are consistent with Trevor Barr’s (2000) argument that communications policy in Australia had ceased to have a sense of strategic thinking and national vision, instead involving the pursuit of competition as an end in itself. It is also consistent with the critique of ‘economic rationalism’ as a driver of public policy.

The Limits of ‘Economic Rationalism’ as an Explanatory Framework

A common assessment of the late 1980s and early 1990s in Australia has been that the cultural priorities of broadcasting policy were colonised by economic priorities, and citizenship discourses were subsumed into those of consumerism

240 and the market. Jo Hawke argued that, in the period from the emergence of DOTAC in 1987 to the drafting of the Broadcasting Services Act in 1992, ‘policy was no longer a matter of reconciling public and private interests but of reconciling competing approaches to regulating for private interests’ (Hawke 1995: 41). Stuart Cunningham argued that the DOTAC Future Directions study was based upon a scenario for media futures where ‘consumer sovereignty and infrastructure provision occupy primary places over production industry opportunities and wider social objectives’ (Cunningham 1992a: 114). Tim Dwyer expressed similar concerns about policies for the introduction of pay television in Australia, believing that they marked a ‘trend in communications media policy objectives away from cultural, social, and overtly political ones and towards industrial (or economic) ones’, whereby ‘governments and their policy instruments are looking increasingly to ways of adjusting regulatory regimes with an eye to securing favourable outcomes for the most influential policy players in a changing communications environment’ (Dwyer 1990: 157).

Michael Pusey’s (1991) critique of ‘economic rationalism’ was a very influential interpretation of the influence of economic priorities on Australian public policy formation in the late 1980s and early 1990s. Pusey’s analysis of the ideas and values of members of the Commonwealth Senior Executive Service (SES) over the 1986-89 period traced changes in its composition, that saw ‘economic’ departments such as Treasury and Finance acquire greater policy influence. Pusey associated this trend with a turning away from the historical

241 priorities of a ‘nation-building state’ towards the reductionist calculus of economic rationalism:

The state apparatus is caught within projections of reality that give primacy to ‘the economy’, second place to the political order, and third place to the social order. Indeed, perhaps the most central finding is that, since the 1970s, reality has been turned upside down and society has been recast as the object of politics … Further, society has been represented as some sort of stubbornly resisting sludge, as a ‘generic externality’ and even as an idealized opponent of the economy. The tail that is the economy wags the dog that is society. (Pusey 1991: 10)

Pusey’s work drew attention to a consensus that emerged among economists, policy-makers, federal Labor government Cabinet ministers, and other influential policy agents (eg. journalists) about the merits of microeconomic reform, competition policy, and free trade. It rested, however, upon some dubious assumptions about both the Labor governments of the 1980s and 1990s, and about government more generally. In light of the importance of the Hawke and Keating Labor governments’ various Accords with the Australian Council of Trade Unions (ACTU), which retained centralised and administrative systems of wage-fixing and involved tripartite decision-making processes in areas such as industry policy, microeconomic reform or ‘economic rationalism’ could only be seen as one element of economic policy-making by the Labor governments of the 1980s and

242 early 1990s (Keating and Dixon 1989; Schott 1991; Argy 1992). Pusey’s claim that Australian public policy had historically possessed a ‘nation-building’ orientation was also historically contestable (Wanna 1992). In broadcasting policy, to take one example, commitments to national culture and public participation were of much greater significance in the 1970s and 1980s than was the case in the 1950s and 1960s, contrary to the historical trajectory presented by Pusey. Moreover, a commitment to a planned and coherent national cultural policy in Australia is very much a creature of the Labor governments of the 1980s and 1990s, particularly with the Keating government’s Creative Nation cultural policy statement released in 1994 (DoCA 1994).

Pusey’s argument played out a familiar historical debate between economy and society or culture as competing discourses of value. The problem with such arguments, which go back to early nineteenth century Romantic philosophy, and which, for theorists such as Barbara Hernstein Smith, have argued have constitute ‘a qualifying mark of the contemporary professional humanist’ (Smith 1988: 126), are twofold. First, the concern for social management and the development of economy in the practice of government have developed alongside each other, rather than in fundamental opposition. Second, the ethical-normative and the calculative-technical dimensions of policy have typically been developed in tandem, rather than being in basic opposition to one another (Burchell 1994a; Hunter 1993/4). Burchell (1994b) argued that the debate about ‘economic rationalism’ was fatally flawed by its demand that protagonists are ‘for’ or

243 ‘against’ markets, or ‘for’ or ‘against’ government intervention. This reflected a tendency to understand policies as more or less transparent manifestations of ideologies, whereas in practice government policies typically combine a normative dimension with a practical and technical dimension that has been about constructing or problematising a social domain in order to render it governable and amenable to change through the application of policy.

The Politics of ‘Labor’s Long Decade’ in Government

Implementation of the microeconomic reform agenda by Labor governments led to an extensive debate about whether these governments had betrayed their social democratic heritage. For critics, such as Graham Maddox (1989) and Dean Jaensch (1989), the period marked a break with Labor traditions, as consensus politics and the move towards becoming ‘a “catch-all” party’ (Jaensch 1989: 154) undermined the legitimacy of the Australian Labor Party as a political alternative, committed to the possibility of radical reforms. Claims that the Hawke-Keating Labor governments had betrayed a Labor heritage, and were at odds with socialdemocratic political priorities, were contested. Carol Johnson argued that, historically, Labor governments have always been primarily concerned with developing ‘a healthy capitalist economy and a humanized capitalist society’ (Johnson 1986: 1). Paul Keating himself, while Treasurer, argued that the government’s priorities were consistent with the Labor tradition in Australia of being ‘a pragmatic party interested in economic progress and practical social

244 reform … [that] owes little or nothing to external influences, be they social democratic, Marxist or whatever’ (Keating 1987: 174-175).

The debates about ‘economic rationalism’ and ‘Labor’s long decade’ of political power in Australia (Beilharz 1994) were linked, and drew attention to, wider international debates about the nature of contemporary social democratic and Labour parties. It has been noted that such parties typically combine a moral and normative commitment to egalitarian and democratic social change with the strategic decisions to seek these goals through participation in existing liberaldemocratic political institutions, the development of cross-class alliances, and acceptance of the framework of a capitalist market economy (Turner 1986; Mathews 1989). Within an international spectrum of left-reformist political parties, the Australian Labor Party has occupied a middle position between the European social democratic and ‘Euro-communist’ parties, which have a stronger historical commitment to reforming capitalism and more extensive links to the labour movement, and ‘catch-all’ parties such as the US Democratic Party that have had minimal ideological commitments and little inclination towards reforming capitalism. In a number of respects the debates about ‘Labor’s long decade’ in power were about the extent to which it was possible to use Labor’s electoral success and labor movement links to move the party towards social democracy (Dow et. al. 1984; Mathews 1986, 1989), or whether its electoral success was based upon its effacing of reformism towards becoming a ‘catch-all’ party (Jaensch 1989; Macintyre 1991).

245

This question cannot be addressed in isolation from Labor’s response to precipitous deterioration in Australia’s external economic balances in the early 1980s. In the period between 1980-81 and 1985-86, Australia’s current account deficit trebled, the economic terms of trade deteriorated by 20 per cent between 1984 and 1986, and the value of the Australian dollar (which was ‘floated’ on international financial markets in late 1983) fall by 40 per cent against the TradeWeighted Index (TWI) between 1984 and 1986 (Kearney 1993). Such developments destabilized long-standing institutional arrangements between competing interests and marked a crisis for ‘policy settlements’ in the Australian political economy. This decline over a five-year period was linked to a longerterm deterioration in the relative performance of the Australian economy, as its economic structures proved increasingly unresponsive to what Hugh Emy described as ‘a new kind of global trading economy … characterised by an accelerating rate of technological change and growing competition for export markets’ (Emy 1993: 44).

These developments led the then Treasurer, Paul

Keating, to issue a famous warning in 1986 that, in the absence of measures to promote export growth, constrain spending on imports and reduce public and private sector debt, Australia would become a ‘banana republic’.

The ‘banana republic’ crisis of the mid-1980s provides an episodic marker of the demise of particular historic patterns of policy formation in Australia. Richard Higgott has observed that the response of the Labor governments to the

246 deteriorating international situation was ‘primarily responsive rather than resistive’ (Higgott 1991: 15), where structural adjustment was seen as providing an opportunity for domestic policy reform towards market liberalisation, as well as initiatives to reform international trading relations, rather than seeking to protect the domestic economic structure from international competition (see Table 6.1):

Table 6.1 Adjustment Strategies to External Imbalances

Offensive Australian Examples

Defensive

Examples

International Create new international trade regime • Strengthen GATT • Advance APEC • Oppose bilateralism Maintain or protect international trade regime, or extend through bilateralism or regionalism • Regional trade blocs • Trade sanctions

Domestic Change domestic economic structure • Industry restructuring • Tariff reduction • Microeconomic reform Protect domestic structure

economic

• Subsidies • Non-tariff barriers

Source: Higgott 1991: 25-26.

Francis Castles argued that the external crisis of the mid-1980s marked the final nail in the coffin of the program of domestic defence, and attempts to insulate high wage levels through high levels of tariff protection for the

247 manufacturing sector. Future responses to economic vulnerability would need to pursue what Castles described as the social democratic option of domestic compensation, where active labour market policies and a more extensive approach to social welfare would enable the labour movement to respond proactively rather than defensively to structural adjustment issues. The Australian Council of Trade Unions (ACTU) came to similar conclusions in its strategic policy document, Australia Reconstructed (ACTU 1987). Bob Catley, who was a federal Labor MP from 1991 to 1996 as well as a Professor of Politics at the University of Adelaide, argued that the external economic crises of the 1980s had revealed the bankruptcy of the early 20th century political settlement that had created an unsustainable ‘dual economy’ structure, between a commodity-exporting sector oriented towards world markets, and protected and regulated domestic industries that were reluctant or unable to become oriented towards a more competitive economic environment. Catley proposed that it was only a Labor government, less encumbered by ties to particular corporate interests than its ‘pro-business’ Liberal opponents, that could undertake ‘the task … of globalising Australian capitalism, destroying its hybrid nature and making it internationally competitive, internally market-driven, externally in balance with the world economy and institutionally oriented to efficiency’ (Catley 1996: 212-213).6

‘Advanced Liberal’ Modes of Governance

248 One of the difficulties with the ‘economic rationalism’ debate in Australia was the dichotomising of markets versus government, and government failure versus market failure. This not only produced a ‘dialogue of the deaf’ among its participants, but also misread a significant shift within modes of governance that was indicated by the new policy agenda of structural adjustment and microeconomic reform in the late 1980s and early 1990s. Rather than seeing these developments as ‘the simple translation of neoliberal ideology into practice’ (Burchell 1994b: 329), a better approach is to see them as part of a shift within liberal forms of government, towards what has been termed neo-liberalism or advanced liberalism.

It was observed in Chapter Two that recent work on liberal forms of government has proposed that liberalism marks the emergence of a distinctive ethos of government, which stresses the need to set limits to state authority in order to govern a society, or a national space, more effectively. Liberalism is thus not simply seen as a political ideology, but also as a form of political rationality, or what Colin Gordon defines as ‘a system of thinking about the nature of the practice of government (who can govern; what governing is; or who is governed), capable of making some form of that activity thinkable and practicable both to its practitioners and to those upon whom it is practised’ (Gordon 1991: 3). Stuart Hall has argued that, historically, liberalism as a political ideology has accommodated a wide range of perspectives on policy and the role of the state, from utilitarianism, laissez-faire economic principles and the ‘nightwatchman’

249 state, to social democracy, Keynesian economics and the interventionist state (Hall 1986).

One of the distinctive features of liberal government as a form of political rationality is that it ‘inaugurates a continual dissatisfaction with government … a recurrent diagnosis of failure coupled with a recurrent demand to govern better’ (Rose 1996: 47). In this respect, liberal government is never simply the translation of liberal political ideology into governmental practice; rather, there is a complex interchange between certain normative principles of rule, a series of governmental techniques and practices, and the self-conduct of those who are both the objects and the subjects of government. The latter group includes not only individual citizens, but also social and economic agents such as corporations, trade unions, institutions of civil society, etc. The notion of ‘economic government’ thus has a double meaning for liberalism as a political rationality: it is government informed by economic principles and guided by the realisation of economic outcomes (e.g. national economic growth, or improved international trade performance). But it is also a form of government that aims to economise on the costs of realising its own programs, by influencing the conduct of social and economic agents rather than directing exerting its own authority (Gordon 1991; Burchell 1996). In this respect, it is perhaps not surprising that the critique of existing regulations should be associated with microeconomic reform, and the development of new forms of economy in the conduct of government.

250 Nikolas Rose (1996) proposed that neo-liberalism drew upon a diverse range of critiques of ‘social government’ from across the political spectrum, and aimed to move beyond these various ‘rhetorics of reaction’ to devising a new series of strategies and techniques of government that ‘govern without governing society’, and ‘govern through the regulated and accountable choices of autonomous agents’ (Rose 1996: 61). Similarly, Graham Burchell (1996) argued that neo-liberalism, or advanced liberalism, had two key elements. First, it entailed a critique of so-called ‘social government’, characterised by the welfare state and extensive regulation of markets, on the basis that such a framework is detrimental to economic performance as it leads to excessive growth of the state sector. Second, it has a more positive dimension, in that it calls for governmental activism aimed at constructing the legal, institutional and cultural conditions that will promote competition and entrepreneurial behaviour. This is what has become known as a enterprise culture, and involved ‘the generalisation of an “enterprise form” to all forms of conduct - to the conduct of organisations hitherto seen as being non-economic, to the conduct of government and to the conduct of individuals themselves’ (Burchell 1996: 28-29).

These arguments overlapped with analyses of the rise of governance, defined as ‘the totality of institutional arrangements - including rules and rulemaking agents- that regulate transactions inside and across the boundaries of an economic system’ (Hollingsworth et. al. 1994: 5). Governance is a term applied to new institutional arrangements between public, corporate and other non-

251 government organisations, that seek to transcend oppositions between state and market by developing mechanisms for negotiated economic coordination, such as interpersonal

networks,

associations

and

inter-organisational

frameworks

(Hollingsworth et. al. 1994). Bob Jessop (1998) argued that these new modes of governance and institutional self-organisation arose from the existence of increasing interdependencies between public and private institutions, and were aimed at ‘supplemening market exchange and government hierarchy with institutionalized

negotiations

to

mobilize

consensus

and

build

mutual

understanding’ between agents within particular sectoral and national institutional sites (Jessop 1998: 34, 35).

The

New

Policy

Discourse

Competition and New Services

of

Broadcasting:

Diversity,

252 The period from the establishment of DOTAC in 1987 to the passing of the Broadcasting Services Act 1992 saw a shift in the dominant policy discourse of Australian broadcasting. This shift arose from developments within the Australian broadcast media policy community itself, particularly the self-defined role of DOTAC bureaucrats and some associated academics as ‘policy entrepreneurs’, able to utilise their ‘outsider’ status in order to transform the Australian broadcast media policy system. Policy transformations in this period were also shaped by the emergence of new forms of policy discourse such as competition policy, as well as the major technological and economic changes taking place in broadcasting worldwide.

Diversity was a concept that was widely used in debates about broadcast media policy reform in the period leading to the passing of the Broadcasting Services Act. Diversity in the media has generally been considered to be an appropriate goal of Australian media policy, although those committed to it have not always been referring to the same thing. Diversity has been variously seen as central to political democracy, consumer choice, national culture, cultural pluralism and the public interest (Flew 1994). A recurrent feature of official policy statements of the period was the perceived connection between the promotion of new forms of broadcasting service and greater diversity in broadcasting. In the Explanatory Memorandum to the Broadcasting Services Act, Bob Collins, the Minister for Transport and Communications, indicated that, under the new legislation, ‘diversity in the range of services is encouraged by a

253 more open planning regime that is expected to increase the availability of services, and by a licensing regime which is designed to accelerate the introduction of services and encourage the introduction of the new “niche” services’.7 This was consistent with the statement of a previous Minister, Kim Beazley, who claimed that in the 1990s, ‘the public will be able to choose from a whole range of services, delivered by satellite, cable or airwaves, which will range from general appeal services down to specific interest, interactive services … [that] will contribute to a degree of choice in information and entertainment sources undreamt of twenty years ago’ (Beazley 1991). The Deputy Secretary of DOTAC, Mike Hutchinson, was confident that reform of broadcasting legislation would promote ‘a more competitive, open, regulatory regime with greater commercial freedom for enterprises and services to respond and adjust but with rules in place to safeguard the public interest. Such an approach would be consistent with the Government's approach to regulation in other industries’ (Hutchinson 1990).

These views reflected a shift in the dominant understanding of how best to achieve diversity in its various forms, away from approaches that stress diversity within media institutions, to those that stress diversity of media service types. The approach that saw a worldwide decline in significance during the 19080s and 1990s was what Denis McQuail (1986) termed internal diversity, or a system where the diversity and plurality of the society and its tastes and interests are represented within a single broadcasting organisation and its programming.

254 Instead, an approach had come to prevail that McQuail termed external diversity, and Eli Noam (1991) defined as open television, where diversity in the broadcasting system was seen as resulting from the existence of a range of media which present different types of programming so as to appeal to distinct and discrete sections of the audience and community.

Noam contrasted open television with what he termed the television of privilege, a term that he used to describe regulated limited-channel television. The implication of ‘open television’ for regulatory agencies was that a conduct regulation approach would need to be replaced by a structural regulation approach. The conduct regulation approach was seen as one where limits on competition and barriers to entry existed alongside a powerful regulatory body, an extensive framework of programming and other conduct regulations, and sanctions for non-compliance. By contrast, the aim of a structural regulation approach was ‘to create a regulatory environment which ensures that participants have no choice but to act competitively’ (Noam 1991: 91). In its guide to the Broadcasting Services Act 1992, DOTAC described the new approach as one of ‘regulation by exception’, where ‘instead of having a plethora of rules and obligations set out … the new rules set out clear boundary conditions for different types of service … it is only the boundaries which need to be monitored for transgression’ (DOTAC 1993: 1-2).

255

The development of national competition policy in Australia post-dated the government’s commitment to microeconomic reform, which was informing broadcasting policy reform, but shared and extended its concern for structural adjustment and enhancing the efficiency and dynamism of all areas of the economy. The Hilmer Committee released its report into national competition policy in 1993 (Report of the Independent Committee of Inquiry 1993); subsequently, the Commonwealth, state and territory governments agreed in April 1995 to a Competition Principles Agreement (CPA), with the Competition Policy Reform Act 1995 being passed with supporting state and territory application legislation. National competition policy marked an important shift in legislative approaches to competition in Australia in three respects. First, while it adopted the competitive conduct rules found in the provisions of Part IV of the Trade Practices Act 1974, designed to limit anti-competitive conduct by firms, it expanded the purview of competition policy to include: reforming regulations which unjustifiably restrict competition; reforming the structure of public monopolies to facilitate competition; ensuring third-party access to facilities that are essential for competition; and fostering “competitive neutrality” between government-owned and private businesses in areas where they compete. Second, national competition policy was premised upon the assumption that ‘the general desirability of permitting competition was so well established that those who wish to restrict or inhibit competition should bear the burden of why that is justified in the public interest’ (Report of the National Committee of Inquiry 1993: 18). In the

256 1995 Competition Principles Agreement, this became a guiding principle that legislation should not restrict competition unless it can be demonstrated that: •

The benefits of the restriction to the community as a whole outweigh the costs; and

•

The objectives of the legislation can only be achieved by restricting competition.

Third, national competition policy was designed to respond to a perceived limitation of the microeconomic reform or structural adjustment process, in that it was largely focused upon reform in the internationally traded goods and services sectors, rather than those sectors with some degree of natural protection from international competition. As a result, reform had largely proceeded on a sectorby-sector basis through a diverse range of industry-specific agencies, without an overarching national approach that presented opportunities to progress reform more broadly and minimise the costs of industry-based regulation (Report of the National Committee of Inquiry 1993: xviii). Competition policy had a rapid impact upon the cognate field of telecommunications in Australia after the passing of the Telecommunications Act 1991, with its advocates arguing that it had achieved its goals of lowering prices to consumers (Ergas 1994; Albon 1994). The OECD also saw competition policy as increasingly relevant to broadcasting, as market forces played a growing role in determining the supply of broadcast services (OECD 1993).

257 Shifting the burden of proof away from those calling for regulatory change in order to increase competition to those seeking to justify restrictions upon competition had the potential to challenge the social contract in broadcasting. Barriers to entry for new competitors had long been the corollary of affirmative or public interest regulations of commercial free-to-air broadcasters in the areas of content and program standards. The continuing significance of such restrictions was established with the government’s decision to place a moratorium on the introduction of pay TV in 1986, and the limitation of the maximum number of commercial broadcasters in a licence area to three under Section 28 of the Broadcasting Services Act, subject to a review by 1997 of national benefits from an increase in the number of services, under Section 215(2) of the Act.

The rise of new broadcast policy discourses was also closely linked to the explosive growth in new broadcasting services worldwide, even though trajectories of change differed across national broadcasting systems. The most striking feature was the dramatic growth in the number of television channels and types of broadcasting service, and particularly the growth of private broadcasting (see Table 6.2):

Table 6.2 Growth of Television Channels in OECD Europe

1980 1990

Public

Private

Total

Satellite

44 47

18 84

62 131

38

Cable channels

258 1995 64 180 Source: Cairncross 1998: 69.

244

262

463

Such changes were driven by a combination of: •

Technological changes, such as the capacity of new delivery technologies such as broadband cable, satellite and MDS (microwave delivery systems) to provide multichannel services across distances without use of additional spectrum;

•

Economic changes, such as the willingness of consumer to subscribe to multichannel pay services, or the scope for advertising revenue to expand to use the new services as well as existing terrestrial broadcasting services;

•

Political changes, whereby regulations were changed in order to allow the entry of new services, often with fewer regulatory requirements on program content than the incumbent broadcasters.

The mix of forces for change varied across countries and across broadcasting systems. In Australia, it is apparent that technological changes were in themselves less significant than the political context in which decisions about the introduction of new services would be made. The most obvious case study is that of pay television, where the first services did not commence broadcasting until 1995, even though the technological capacity for delivery of such services had existed since the late 1970s, and every public inquiry since 1982 had recommended its immediate introduction (Flew and Spurgeon 2000).

259

The Broadcasting Services Act 1992 and its Impact: A Case Study in Neo-Liberal Governance?

The Broadcasting Services Act 1992 was passed through Parliament, with amendments, on 14 May 1993. The Act combined a Statement of Objectives that aimed to codify the goals and principles of broadcasting policy, with a commitment to ‘light touch’ regulation intended to promote greater competition, new technologies and new services.8 It promoted differential regulation of broadcasting services in the areas of ownership, content standards and program standards, on the basis of their perceived ‘degree of influence’.9 The legislation allowed automatic licence renewal for five years for commercial broadcasters unless ‘special circumstances’ existed, and also proposed a system of ‘class licenses’ for subscription-based and open narrowcasters. Consistent with the ‘light touch’ and ‘degree of influence’ principles, laws regarding foreign ownership and cross-media ownership differed between broadcasting services, with strong controls for commercial broadcasters and less stringent controls for other broadcasting services. The ABA would be empowered, as the ABT was, to set program standards for children's programs and Australian content under Section 122 of the Act, but responsibility for program standards and complaints would be devolved to industry self-regulatory bodies representing the various broadcasting sectors, through the development of Industry Codes of Practice that would be approved and registered by the ABA. Finally, there was a requirement under

260 Section 160 of the Act that the ABA perform its functions in a manner consistent with the objects of the Act and the ‘light touch’ regulatory principle, ministerial directions, and Australia’s international treaty obligations.

In its guide to the legislation, DOTAC stressed the extent to which the Act was consistent with the government’s microeconomic reform agenda. DOTAC believed that the new Act marked a move away from the closely prescriptive approach of the Broadcasting Act 1942, providing a framework for promoting an efficient and competitive broadcasting sector, and an Australian broadcasting industry that could adapt to new commercial and technological realities (DOTAC 1993: 1). There is considerable commentary available on the Broadcasting Services Act 1992 (Armstrong and Lindsay 1991; CLC/CAMLA 1991; Sinclair 1991; Davies and Spurgeon 1992; Hawke 1995). The remainder of this chapter will therefore focus upon the extent to which the new legislation and policy framework transformed the mode of governance of broadcasting in Australia in the directions that DOTAC and others believed that it would.

The Impact of the Broadcasting Services Act 1992 on Media Policy Participants

The Commercial Free-to-Air Broadcasting Industry

261 The commercial free-to-air broadcasting industry was the major beneficiary of broadcasting policy reform in Australia. Policy demands that had been advocated by FACTS and the commercial networks since the 1970s, such as an industrybased approach to program standards, the elimination of licence renewal hearings and greater certainty of tenure over broadcast licences, had largely been met under the new legislation. From the point of view of the drafters of the Broadcasting Services Act, the trade off was to be that ‘the industry’ would no longer be the small number of commercial free-to-air broadcasters represented by FACTS, but would instead be a more diverse and stratified grouping of commercial broadcasters, national broadcasters, community broadcasters, subscription broadcasters and subscription open narrowcasters. The aim was that the degree of regulation would be commensurate with the potential influence of the broadcaster over Australian culture, community standards and public opinion, and that regulatory resources would be better directed to the media of greatest potential influence. The aim was also that new types of broadcast service providers would take advantage of the opportunities presented by new delivery technologies to directly compete for audiences with the commercial networks, as had been the case in many countries since the 1980s.

It is not apparent that the adoption of a ‘structural’ approach to regulation led to the emergence of a more competitive Australian broadcasting environment. An analysis of the economic performance of Australian commercial television between 1986 and 1995 shows that, after the crises of ‘entrepreneurial television’

262 and the impact of economic downturn in the early 1990s, the period from 19921998 was one where the commercial networks were able to earn profits well above the average across all industries in the Australian economy, as well as continuing to accrue significant economic rents, particularly in the capital city markets (see Table 6.3):

263

Table 6.3 Rates of Return for Australian Commercial TV 1986-95 and Economy-Wide Indicators

Ratio of earnings (1) to tangible assets (2) in commercial TV 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98

Capital cities All regional 8.6 28.0 14.7 31.6 8.4 33.2 9.3 37.8 2.1 14.5 27.5 12.1 24.6 12.4 30.8 14.3 31.0 15.3 34.2 16.1 30.0 14.5 20.2 10.2

Ratio of earnings (3) to total assets: all industries

10 year bond rate (4)

9.6 10.4 11.3 10.2 7.4 6.0 7.3 8.0 na na na na

12.8 12.0 13.5 13.4 11.2 8.9 7.4 9.7 9.2 8.9 7.1 5.6

Sources: BTCE (1996: 78); Productivity Commission (1999: 42). (1) Earnings are defined as earnings before interest and tax (EBIT). (2) A distinction is made in broadcasting between tangible assets, or program rights, property and equipment, and intangible assets, of which the primary one is the value of the broadcast licence itself. (3) Earnings are defined as earnings before interest and tax (EBIT). (4) As of end of financial year ie. 30 June of the end-year.

The three major commercial networks had long maintained that some restrictions on competition, and particularly on barriers to entry, had been a necessary condition for the realisation of ‘public interest’ objectives as part of their social contract with regulators and the community. Such a principle was

264 enshrined in Section 28 of the Broadcasting Services Act, which required that the ABA was not to allocate more than three commercial television broadcasting licences in a licence area prior to a review in 1997. This was despite the requirement of national competition policy that the onus was upon those arguing for restrictions on competition on the basis of ‘public interest’ criteria to establish that benefits would outweigh costs, and that the restrictions were the only means of meeting these public interest goals. As a result, there has remained a lack of transparency in the relationship between economic protection enabling aboveaverage profits and the realisation of pro-social and public interest outcomes (Hayne 1994). The major effect of the legislative changes in this period was to make commercial broadcasters, and particularly the capital city-based networks, more profitable and competitive in the new environment, and to reduce the degree of external scrutiny of their conduct and performance.

Pay Television

It is almost universally agreed that the policies surrounding the introduction of subscription broadcasting, or pay television, were one of the great areas of failure in Australian broadcast media policy in the 1990s. ABA Deputy Chairman Gareth Grainger admitted that the introduction of pay TV in Australia had been ‘the single area of almost complete and glaring failure of the BSA’ (Grainger 1997: 19). In contrast to North America and most of Europe, where pay TV had been in operation for between ten and 30 years, pay TV services did not commence in

265 Australia until 1995, after thirteen years of public inquiries and political delays. Although a 1982 Australian Broadcasting Tribunal (ABT) inquiry recommended the immediate development of cable and subscription TV services (ABT 1982), neither the Coalition nor Labor governments adopted the recommendations, and it was not until the 1992 reforms of broadcasting and communications laws that adequate legislative provision was made for the development of residential markets for pay TV services. A series of extraordinary policy and political developments contributed to further post-1992 delays in the start-up of pay TV services, including: a flawed allocation process for satellite-delivered pay TV services through public auction, that was exploited by speculative bidders; the mandating of satellite as the first delivery platform for pay TV, in order to generate revenue for the financially troubled AUSSAT national satellite system; and the violation of the principle of ‘technological neutrality’ that the Broadcasting Services Act 1992 had sought to enshrine, by mandating satellite delivery and the banning of delivery through microwave delivery systems (MDS) (Communications Update 1992, 1993; Flew and Spurgeon 2000).

Rather than attributing the delayed introduction of pay television in Australia to policy failure, Tom O’Regan has argued that regulators and governments in Australia ‘have gone out of their way to protect the interests of free-to-air broadcasters at the expense of pay TV and other new television services in advance of their operations’ (O’Regan 1996: 70). It is apparent that opposition to pay TV was not confined to the commercial free-to-air networks,

266 but that there existed a wider climate of scepticism bordering on active hostility towards pay TV. Pay TV was seen by its critics, which included academics, influential members of government, and sections of the production industry, as: a harbinger of differentiation among TV audiences based upon capacity to pay; a purveyor of low-quality imported programming which would fragment the programming market; and a symptom of market boosterism and technological determinism or, as broadcaster Philip Adams put it, ‘a cure for which there is no disease’ (quoted in Appleton 1997). A common set of assumptions was expressed by Tim Dwyer, who drew upon a dichotomy between ‘consumer’ and ‘citizenship’ discourses as an interpretative framework for understanding pay TV policy, to argue that ‘there have been few, if any, prominent arguments put forward to suggest that pay TV would genuinely enhance the socio-cultural or informational dimensions of Australia’s communications infrastructure. The assumption has been that “more” means “better”’. (Dwyer 1995: 102)

Such arguments are perhaps less telling about pay TV than they are about the significance of the social contract as the cornerstone of cultural and public interest arguments for broadcast television. Ian Hayne argued that the quid pro quo approach to broadcasting was premised upon a sustaining fiction of spectrum scarcity as a underlying reality of service planning, rather than a consequence of conservative spectrum planning. As a result:

267 In the tradition of Catch-22 … broadcasting legislation created an artificial scarcity of licences, which then enabled “public trustee” arguments to rise, and which in turn led to particular schemes of regulation supporting program restrictions and obligations. (Hayne, 1994: 9)

Pay television, as the bearer in the first instance of the shift from limitedchannel to multichannel television, would upset this logic in two key respects. First, it would introduce real competition to commercial free-to-air television for audiences and, to a lesser degree, advertisers. The number of households subscribing to pay TV services in Australia has grown from 500,000 in December 1996 to 1,050,000 in June 1999, or about 15 per cent of Australian households. It is estimated that homes with pay TV consume pay services about 46 per cent of their total viewing time, and patterns of pay TV usage are particularly high in the non-prime time periods, among viewers in the 5-12, 13-17 and 18-24 age groups, and in households with children (Flew and Spurgeon 2000). While subscription channels do not directly compete with commercial free-to-air television for total audience share, and their advertising revenues were less than 1 per cent of those of the commercial free-to-air sector in 1999 (Peters 1999), they are taking significant niche audiences from the commercial free-to-air sector, and this trend can be expected to grow significantly over time. Second, pay television promotes greater integration of national and international programming markets, particularly in area such as sport, documentary and infotainment programming, where the ‘cultural discount’ of audience preferences for local as opposed to

268 imported programming is lower than it is for drama (O’Regan 1996). These structural changes arising from the introduction of pay TV are overlaid with a tension in the policy field between older forms of social and cultural regulation such as Australian content and program standards, and newer policy discourses of competition policy, with the result that:

Communications and cultural policy making is driven by what are now seen as two relatively separate and separable governmental ends whose conflict and shape is to be pragmatically determined. (O’Regan, 1996: 71)

Public Interest and Advocacy Groups

The Broadcasting Services Act, and its approach to questions of regulation and policy formation, had significant adverse implications for public interest and advocacy groups involved in Australian broadcasting policy. If the 1970s marked the growth of a public participation discourse in broadcasting, with the early inquiries of the ABT being a high-water mark in public accountability for commercial broadcasters, and the 1980s saw the institutionalisation and professionalisation of participation by organised interest groups and policy activists, the 1990s would see the bases for such participation significantly challenged, and the capacity for interventions in the policy and regulatory process altered in significant ways. What was particularly under challenge was the notion that such groups had a right to involvement in the policy process on behalf of the

269 wider community of media audiences, on the basis of the ‘public trust’ nature of broadcasting licences.

The ‘public trust’ conception of broadcasting licences had sustained the active involvement of public interest and advocacy groups in the policy-making process in three related ways. First, it supported the proposition that the public as citizens had an interest in commercial broadcasting over and above their interest as individual audience members in watching or not watching particular programs. Insofar as the broadcasting audience is highly atomised, the role for interest groups seeking to represent broad community interests or those of particular sections of the audience (e.g. children) was legitimated. Second, the claim that the public as citizens had an interest in processes of policy formation as well as outcomes, which was established in the 1970s through the Senate Standing Committee’s inquiry into Australian broadcasting, the Green Report, and the ABT Self-Regulation Inquiry, entailed a commitment to open and transparent processes of decision-making. Finally, recognition of the unequal resources of the broadcasters compared with other interest groups had led to a commitment to institutional pluralism, manifesting itself in the ABT playing an active role in promoting and assisting the involvement of community-based and public interest groups to participate in the broadcasting policy process.

Such propositions were always open to challenge, and became increasingly contested from the late 1980s on. Former Communications Minister

270 Graham Richardson has provided a colorful critique of the claim that the public are interested in such open processes on the basis of the ‘public interest’:

It depends on where you are coming from: should everything be done by open public hearing process? It’s always been put to me, ‘Ah, it’s in the public interest’. Well, I will take you for a walk down the shopping centre of any place in the western suburbs. Go up to the first hundred people and ask what are the issues facing this country. We won’t find one that tells us the ABA must have public hearings. Not one! Who’s interested in it? A very small, elite clique who claim to represent the people out there but who could not give a stuff. (Richardson 1992: 129)

Even those advocating public processes would acknowledge the possibility that the wider community was not in fact particularly interested in getting involved. Anne Britton has observed that while she believes that ‘dropping the licence renewal process has been quite instrumental in shutting the public out of a response to the activities of networks’, she would acknowledge that:

If you looked around at who was involved in the licence renewal process in the 1980s, it was the unions, consumer associations, public interest organisations. It was hardly people stampeding the doors of the ABT to have a say in how broadcasting ran … The reality … and it’s a depressing scenario in some ways, is that most public movements are not that big.

271 The notion of there being a great cross-section of the public involved is nonsense. There are three or four individuals who are going to run a whole range of campaigns. I don’t think we should necessarily beat ourselves up over that.10

Suspicions that the ‘public interest’ was not being adequately represented though such processes fed into the concern that both the broadcasting legislation and the ABT had become excessively legalistic, and that the costs of ensuring regulatory compliance by broadcasters through public licence renewal hearings had come to significantly outweigh the benefits for the wider community of such processes. There was also the issue of who was involved in such processes, and to what ends. Industry representatives such as Tony Branigan (FACTS) have expressed concern with government-funded organisations such as the AFC and the FFC being involved as lobbyists in the policy process,11 while Jock Given (CLC) observed dangers in ‘an easy equation between the production industry and what we would see as the public interest’.12 From the perspective of public choice theory, such conduct was seen as an instance of sectional interests and bureaucrats deploying ‘public interest’ rhetoric for their own economic or other ends, capturing concentrated benefits at the expense of unorganised interests, and expanding the ‘political market’ in broadcasting to the detriment of consumer choice (Self 1993). This literature also asserts that such interest-group coalitions are more likely to emerge when there are regulatory constraints on competition,

272 and the absence of a direct market relationship between consumers and service providers.

Regulatory Agencies: The Australian Broadcasting Authority

The Australian Broadcasting Authority had a very different regulatory remit to the Australian Broadcasting Tribunal that it replaced. The ABA was designed to be less procedure-bound in its conduct, and was expected to use the resource savings arising from devolution of program standards functions, and the ending of licence renewal hearings, to play a more proactive role in researching current and future media issues. While industry representatives such as Tony Branigan of FACTS found their relationship with the ABA to be ‘far less suspicious and formal’ than that with the ABT,13 Anne Britton of the MEAA expressed concern that rejection of the ABT’s more ‘hands-on’ approach had led to a more ‘closed door’ approach to regulation, and that the ABA has been a ‘reluctant watchdog’.14

In a personal assessment of the Broadcasting Services Act and the ABA’s performance after five years, Deputy Chairman Gareth Grainger believed that the major improvements had been in those areas where the ABA had been permitted greater policy flexibility and the scope to develop ‘partnership’ arrangements with other relevant stakeholders. These included the development of a co-regulatory approach with industry organisations in the area of program standards and complaints procedures, research into audience and community views towards

273 broadcast media, and the capacity for informal but ongoing processes of public and industry consultation as a basis for informing ABA policies and reviews (Grainger 1997). Such arrangements exemplify the new modes of governance based upon networks and negotiated coordination, to build workable and mutually beneficial relationships based upon trust and shared understanding.

Critics have argued that such informality comes at a cost in terms of the scope for public participation and understanding of regulatory processes. Holly Raiche’s study of ABA investigations into control of broadcasting licenses found that the ABA’s ‘informal’ processes to test for control have meant that ‘the public must take on faith that the ABA’s investigations were as full and accurate as possible and that the correct conclusions on control were reached’ (Raiche 1997: 18). Similar criticisms were raised by Chadwick et. al. (1995), who argued that in the areas of planning and technology, ownership and control and codes of practice, the ABA had been unable to resist political interference. They believed that the ABA’s lack of independence and transparency had arisen from procedural and substantive flaws with the Broadcasting Services Act, and the ways in which it qualified public interest criteria by criteria of economic efficiency, with a resulting tendency to be ‘supine, self-censoring [and] always anticipating the wishes of its political masters or captured by those it oversees’ (Chadwick et. al., 1995: 71). Osmond Borthwick, from the ABA, responded by arguing that the ABA had used its discretionary powers effectively to provide information and enable public involvement, and was open and accountable in its procedures

274 (Borthwick, 1995). This response does, however, miss Raiche’s and Chadwick et. al.’s principal point, which is that there was no longer an implied right of public participation enshrined in legislation that guarantees broadcast property, as was the case under the ‘public trust’ conception of broadcast licences. As a result, the question of a public interest in broadcasting policy is one of ‘the values which are to guide decision-making by whatever regulator emerges’ (Chadwick et. al. 1995: 75), and whether they choose to include public interest and advocacy groups in their deliberative procedures.

Codes of Practice and Co-Regulation

A major development for the broadcasting industry was the need to develop Codes of Practice, under Section 123 of the Broadcasting Services Act 1992. These Codes of Practice needed to address the question of program standards, would involve the development of industry-based mechanisms for the handling of complaints, and were to be registered with the Australian Broadcasting Authority. For the most part, industry and regulatory agency representatives have viewed this experience positively, believing that this co-regulatory approach (defined in this way since the industry-based codes and complaints procedures are subject to ABA review, and generally developed in consultation with the ABA) has generated a process for addressing program standards and complaints that is not only more efficient for the stations, but more efficient and effective for the public. Tony Branigan, the Chair of FACTS, believed that the

275 need to develop a Commercial Television Code of Practice, administered by FACTS, ‘has been beneficial for the stations, as it has forced stations to become a lot more professional in how they handle complaints … They’ve been forced to become more accountable [because] our Code of Practice has been generated within the industry rather than being imposed on stations’.15 Sally Stockbridge, Senior Classifications Officer for Channel Ten, Sydney, and former Board member of the Office of Film and Literature Classification, concurred with this view, believing that from the station’s point of view, getting an ‘immediate response’ from viewers provides an ‘ongoing gauge’ of matters of public concern which can influence programming.16 From the regulator’s perspective, Debra Richards, former Director of Program Standards at the ABA, believed that the co-regulatory approach has been more effective in terms of the use of ABA resources, as well as well as ensuring greater responsiveness on the part of broadcasters to public complaints.17

Analysts of new modes of governance such as co-regulation, such as Bob Jessop, believe that there is a ‘tendency to highlight success and downplay failure’ with these new arrangements (Jessop 1998: 40). Yet it was noted in Chapter Two that policy failure is an endemic feature of the policy process, in the sense that policy-makers have only an incomplete, partial and contingent capacity to represent and control the objects of their policy discourse. This tendency to policy failure is accentuated by both elements of consumer sovereignty in relation to media products and services, as well as by citizens’

276 expectation of a right to representation and involvement in policy processes which have social and cultural significance.

Such dangers became manifest in Australia in 1999 when a serious crisis of co-regulatory governance emerged in commercial radio. This centred around allegations that high-profile announcers such as John Laws, Alan Jones, Howard Sattler and Jeremy Cordeaux had breached the Commercial Radio Code of Practice, by accepting payment from leading companies and industry associations in exchange for favourable editorial comment on their programs, and that their radio stations were thus in breach of their licence obligations (ABA 1999a; ABA 1999b). The ABA investigated these deals, particularly those surrounding Laws and Jones on radio station 2UE, on the basis of the requirements, under the Objects of the Broadcasting Services Act 1992 that it is required to ‘encourage providers of commercial broadcasting services to be responsive to the need for fair and accurate coverage of matters of public interest’ (s. 3 (g)), and ‘to encourage providers of broadcasting services to respect community standards in the provision of program material (s. 3 (h)). The ABA found that Laws and Jones had contravened the Commercial Radio Codes of Practice, administered by the Federation of Australian Radio Broadcasters (FARB), on 90 occasions. It found that Clause 2.2(d) of the FARB Code, which requires that ‘In the presentation and preparation of a news and current affairs program, a licensee must ensure that viewpoints are not misrepresented, and material is not presented in a misleading manner by giving wrong or improper

277 emphasis … or by withholding relevant available facts’, had been breached on 60 occasions, and Clause 3.1(a), which requires that ‘Advertisements broadcast by a licensee must not be presented as news programs or other programs’, had been breached on 30 occasions. It recommended that 2UE be required to make on-air as well as off-air disclosures of relevant commercial agreements as a condition of its broadcast radio licence, and to ensure that paid advertisements were readily distinguishable for other program matter (ABA 2000).

The ABA’s ‘cash-for-comment’ inquiry presented starkly the question of whether an industry body such as the Federation of Australian Radio Broadcasters (FARB), as well as the ABA, were willing to address public concerns about the conduct of individual stations and broadcasters, and were willing to prosecute those found to have been in breach of the Industry Code of Practice. It was the raising of these allegations on the ABC television program Media Watch in July 1999 which triggered the ABA’s inquiry, but the issues had been raised in a number of quarters, including the Media Watch program, as early as 1994, without action being taken by the ABA. Moreover, the principal announcers involved - John Laws and Alan Jones - continue to broadcast their high-rating programs, and the sanctions imposed upon radio station 2UE, such as requirements for on-air disclosure of prior commercial arrangements by announcers in relevant announcements, and the keeping of a register of such commercial agreements by the radio station that is available for public viewing, were seem by many as inadequate punishments for the quite blatant use of the

278 public airwaves to promote undeclared sponsors’ interests by these announcers in the guise of commentary.18 The dangers of co-regulation, such as the potential for closure of public discourse, lack of public accountability and regulatory capture, were raised in a fairly stark fashion by this inquiry, and its wider ramifications for broadcast media policy remain a matter of contention.

Program Classification

One of the most politically contentious areas of media content regulation is censorship and content classification. Part of the reason why this area has been subject to particularly intense debate is because discourses of citizenship, particularly those associated with freedom, participation and the ‘public interest’ can be aligned to both pro- and anti-censorship debating positions, and possess no necessary correspondence to a particular political orientation. It is an area where, in contrast to positions taken in debate cultures around public participation, the left-progressive position has tended to favour ‘passive’ rather than ‘active’ citizenship, or the setting of clear boundaries between individuals and the state. While direct censorship, in the form of suppression or prohibition of programs, has not been a strong characteristic of government policies towards broadcast television in Australia, program classification and program modification have been characteristic forms of content regulation.19

279 The development of classificatory norms for broadcast television, such as restrictions on the time of the day or evening in which programs with particular features (eg. sex, violence, nudity, adult language and themes), have been based on a sliding scale approach to content regulation. Classifications are linked to the presumed ‘moral competencies’ of various audiences, most particularly adults as compared with children, and the ‘publicness’ of the media of distribution, and access is regulated on the basis of the age of the audience member, the time of the broadcast or the nature of the exhibition venue. Such an approach is consistent with a liberal model of media content regulation, which not only entails setting limits to state regulation of individual conduct, but also typically involves the establishment of a series of governmental procedures for content regulation. Such procedures include: establishment of an ‘arm’s length’ relationship between regulators and government; development of calculative and evaluative norms to both media content and ‘community standards’; and policy mechanisms that can render the various normative principles associated with the distribution of media content (freedom of speech and expression, protection of children, respect for community standards, and consumer choice) into programs of action to be administered by independent experts (Bertrand 1978; Stockbridge 1996; Flew 1998).

The Broadcasting Services Act had two principal implications for the area of program classification. First, in line with the move towards industry selfregulation, responsibility for developing program classification standards would

280 be devolved from regulatory authorities to industry bodies, who would develop standards as part of their Codes of Practice in a co-regulatory framework with the ABA. In developing program classification standards, the industry bodies would be required to take into account both the Objects and Section 123 of the Broadcasting Services Act, the classificatory standards for other media administered by the Office of Film and Literature Classification (OFLC), and the outcomes of consultation with the community as well as with the ABA about these standards. The other key element of the new legislation was that, in line with the concept of a sliding scale of regulation based upon the ‘degree of influence’ of different broadcast media upon community views, material which may require modification in order to be shown on broadcast media would be able to be shown without modification on those media identified as being more directly ‘media of choice’, such as subscription broadcasting or pay TV. Under Section 100(2) of the Broadcasting Services Act, subscription television broadcasting licensees were required to comply with a Code of Practice applicable to the licensee, as well as with the film classification system administered by the OFLC.

As a first ‘test case’ of the new regulatory regime, the question of whether ‘R’ rated material would be permitted on pay TV quickly became caught up in what Sally Stockbridge has described as the ‘crisis of content regulation’ in Australia (Stockbridge 1996: 137; cf. Spurgeon 1994). The development of new media, greater media diversity, global media distribution networks, and changes

281 in the relationship between content distributors and users would seem to imply a reduced capacity for regulators to control or restrict access to media content. For some observers, such as former British Board of Film Classification member Julian Wood, these developments require a change in regulatory practices, towards ‘letting go’ of content controls, and instead adopting a role of informing and educating media audiences and users (Wood 1997: 13). For others such as the Senate Select Committee on Community Standards Relevant to the Supply of Services Utilising Electronic Technologies, and prominent individual members such as the independent Tasmanian Senator Brian Harradine, such an approach would reinforce a decline in moral authority in society, and would be contrary to what they perceive as a majority community concern about violent and sexually explicit material in the media. As a result, they simply refused to accept findings such as those from a joint ABA/OFLC research on community attitudes in 1993, which found that 82 per cent of respondents believed that adults should have the option of watching R-rated material on pay TV. Instead, they successfully lobbied for amendments to the Broadcasting Services Act which had the effect of ensuring that a ban on such material on pay TV would be put in place.20 Similarly, the FACTS Code of Practice has twice been amended, in 1993 and 1997, in response to government pressures to move the earliest time for screening of material rated ‘MA’ back from 8.30 p.m. to 9.00 p.m., and then from 9.00 p.m. to 9.30 p.m.

The failure to institute a more liberal regulatory regime for program content on pay TV in Australia, and the debates surrounding program

282 classification more generally, point to two perennial questions arising from liberal modes of governance. These are the balance between individual freedoms and the achievement of economy in the practice of government on the one hand, and the sense of moral guardianship towards a community implied in the ‘shepherding’ role of the modern state on the other. This question of balance is an instance of what Nikolas Rose has termed the ‘recurrent dilemma of liberal government: the fear of not governing enough versus the fear of governing too much’ (Rose 1993: 292). One approach would accept that a consequence of media proliferation, globalisation, decentralisation and the fragmentation of audiences, would be further movement away from the ‘prohibition model’ of media content regulation, and a pluralistic understanding of the notion of community standards in a culturally diverse society.

Such an approach is consistent with the policy

directions indicated by the Broadcasting Services Act, towards greater consumer choice, responsible industry self-regulation and ‘regulation by exception’.

By contrast, the Senate Committee’s approach, and the dominant policy approach since 1996, has been to call for greater regulation of problematic media content in light to these trends in media distribution and consumption. This points to what Christina Spurgeon has described as a ‘paradox of the “information economy”’, where ‘uncompromising pastoral concern for the moral management of populations has come into direct political conflict with national economic strategy as residential markets for information-based services continue to develop’ (Spurgeon 1999: 52). Although this latter approach appears backward-looking in

283 light of economic and technological globalisation, there is nonetheless some need for caution in dismissing these arguments. Such arguments draw upon recognisable citizenship discourses, most notably those of community, security, social responsibility and public accountability, and promote a notion of ‘active citizenship’, or ongoing participation in community activities on a moralnormative basis. In considering the persistence of such arguments, there is a need to acknowledge the extent to which the liberalisation of censorship has also involved its governmentalisation, where moral arguments are subsumed within bureaucratic processes as part of a conscious desire to ‘de-dramatise’ potentially contentious aspects of social life. This is done through a process of subjecting conflicting normative principles to the calculative and administrative logics of social administration that are ‘neither transparent to public scrutiny nor immediately amenable to popular will’ (Meredyth 1997: 276; cf. Donzelot 1993; Flew 1998).

Conclusion

The late 1980s and early 1990s saw a major shift in thinking about broadcast media policy. The drivers of such changes included: new policy discourses that stressed diversity and consumer choice; the growing significance of economic discourses associated with ‘neo-liberal’ modes of governance; and the utilisation of delivery technologies such as cable, satellite and the Internet to provide new multichannel, user-pays and interactive services. These changes also

284 pointed to a shift in the role of state agencies, from being the public interest watchdogs of the uses of private power and the brokers of outcomes between competing interests, to becoming the animators of change, the facilitators of industry self-regulation and the promoters of competitive market behaviour. While some have seen such outcomes as a manifestation of a misguided ‘economic rationalism’, it has bee argued in this chapter that these developments marked a confluence between ‘advanced liberal’ modes of governance based upon ‘responsible self-regulation’ and negotiated coordination between public and private sectors, and the ‘revisionist’ social-democratic agenda of the Hawke and Keating Labor governments to promote an Australian economy and society that was more outward-looking and change-oriented, in the face of recurrent structural crises in the economy.

The apotheosis of these changes was meant to be the Broadcasting Services Act 1992. While the rhetoric of those promoting the new legislation and that of its critics saw the new legislation as the harbinger of a neo-liberal policy environment, in practice the legislative changes led largely to the strengthening of the economic position of the incumbent broadcast networks, and a weakening of the capacity of public interest and advocacy groups to exercise countervailing power to the broadcasters. While the Australian Broadcasting Authority was largely positive about these developments, problems emerged in broadcast media policy in the 1990s that the new policy framework dealt with in ways that were at odds with both ‘public trust’ expectations from the community as citizens about

285 broadcasting regulation, and with the notions of freedom, competition and autonomy championed by neo-liberal discourses.

It was observed in this chapter that that, in contrast to the neo-liberal rhetoric that accompanied the legislative changes, the policy framework largely consolidated the political and economic power of the commercial broadcasting networks and, to the extent that challenges emerged to such power emerged from prospective new entrants or from critics of the networks, the authority of regulatory agencies was largely used to defend the status quo. What became apparent was that the decline of ‘public trust’ discourse as a basis for regulation had an immediate and negative impact upon the capacity of public interest and advocacy groups to involve themselves in the policy process, whereas the intention to promote new technologies and greater competition had little impact upon the commercial free-to-air broadcasters, as seen in the protracted difficulties in introducing pay television into Australia. Moreover, the extent to which the new legislation led to broadcast media policy moving away from direct government intervention and towards effective self-government is debatable. In areas such as complaints, self-regulatory mechanisms developed quickly, although the ‘cash-for-comment’ scandal that emerged in Australian commercial radio in 1999 pointed to some major limitations in the process. In other areas, most notably program classification standards, the ‘light touch’ and self-regulatory intentions of the Broadcasting Services Act towards the media were largely negated by a continuing tendency for other elements of government to seek

286 reinforcement of their rights and capability to engage in moral management of the population, through their ability to shape laws governing the availability of media content to consumers. The logic of the social contract - that restrictions on competition were a necessary trade off for content regulations - also remained largely intact over the course of the 1990s in Australia, as the Productivity Commission would ruefully observe in its inquiry into broadcasting in 2000.

1

Interview with Anne Britton, 28 September 1998. Interview with Christina Spurgeon, 28 October 1997. 3 Interview with Jock Given, 18 November 1997. 4 Interview with Tony Shaw, 23 September 1998. 5 Interview with Anne Britton, 28 September 1998. 6 Catley’s argument that the ALP is better able to pursue policies in the overall interests of capital accumulation because of its distance from particular business interests was, interestingly, first developed by the Communist Party of Australia in the 1940s (Kuhn 1991: 62). 7 Broadcasting Services Bill 1992, Explanatory Memorandum, circulated with the authority of Senator Bob Collins, Minister for Transport and Communications, p. 9. 8 The Objectives of broadcasting Policy under Section 3 of the Broadcasting Services Act included: diversity of services; promotion of competition; diversity of control; Australian control; promotion of Australian identity, character and cultural diversity; high quality and innovative programming; fair and accurate coverage; respect for community standards; providing an effective means of addressing complaints; and protection of children. 9 The ABA was empowered to classify new services as being within six sectors including: national broadcasters; commercial broadcasters; community broadcasters; subscription broadcasters; subscription narrowcasters; open narrowcasters. 10 Interview with Anne Britton, 28 September 1998. 11 Interview with Tony Branigan, 13 November 1997 12 Interview with Jock Given, 18 November 1997. 13 Interview with Tony Branigan, 13 November 1997. 14 Interview with Anne Britton, 28 September 1998. 15 Interview with Tony Branigan, 13 November 1997. 16 Interview with Sally Stockbridge, Senior Classifications Officer, Channel Ten, Sydney, 18 November 1997. 17 Interview with Debra Richards, 19 November 1997. 18 An indication of the power of the two presenters in their home market of Sydney was provided by Michael Gordon-Smith, ABA Board member and Chair of the Inquiry from 8 November 1999, in a presentation to staff and students at the Queensland University of Technology, Brisbane on 16 May 2000. He pointed out that the ABA sought a Queens Counsel to represent it who was based outside of Sydney, since they could not guarantee that a Sydney QC would be willing to prosecute a case against the two individuals, given their connections with powerful people from all sectors in Sydney. 19 Collins and Murroni have noted that one of the problems with debates about media censorship is their tendency to conflate four relatively distinct forms of regulating access to materials: suppression or prohibition; restriction of circulation to certain types of audience and not others (eg. adults and not children); restriction of circulation to certain media or places of viewing (eg. films unable to be shown on television, or materials restricted to ‘adults only’ bookshops or cinemas); and deletion of particular images, words, scenes etc. from an overall media product, whether in its original released form or in subsequent releases (eg. ‘R’-rated films modified for broadcast television). This is connected to a tendency to presume that suppression, rather than restriction or selective deletion, is the characteristic form of state regulation over media content. (Collins and Murroni 1996: 98-99). 20 The amended clause of the Act requires that ‘the licensee will ensure that access to programs classified “R” by the Office of Film and Literature Classification is restricted by disabling devices acceptable to the ABA but will not broadcast such an “R” classified program until the ABA has completed extensive, Australia-wide qualitative and quantitative research on community standards of taste and decency in relation to classifications for pay television and on what levels of violence and depiction of sex should be allowed, and the ABA has recommended, and the parliament has, by resolution of each House, approved, the broadcast of such programs’ (clause 10(1), Schedule 2, part 6). 2