Thursday, February 18, 2010

Thursday column: The networks war on TV

There are five free-to-air television networks in Australia. All are now government funded.

How it came to this when any one of a number of private entrepreneurs would have been keen to enter the market on any terms and take their chances providing viewers with what they want says as much about the malleability of our leaders as it does about the essentially anti-television attitudes of the networks who claim to be its protectors.

What I about to describe is a three-card trick. Watch closely for the switch, admire the skill and cynicism with which it was executed, and if you can keep an eye out for the interests of viewers as taxpayers; just about no-one else has.

Let's start in the lead up to March 1998 when an entire new world of viewing became possible.

Digital channels, which took up far less spectrum than analogue channels, would enable far more chanels to be broadcast... The UK and much of Europe were planning to give one of the new channels to each of the existing broadcasters and then auction the others to new entrants. It would be a great deal for taxpayers and a great deal for viewers.

The networks pulled out all stops to prevent it happening here. Spreading what now looks like dodgy research they told us we didn't really want more channels, we wanted better quality pictures.

To popularise the idea they produced a series of ads fronted by Mr Fizzy, Mr Squirt and Mr Butt. Each of the existing networks was to get given enough spectrum to simulcast its existing channel in near cinema-quality High Definition leaving no spectrum free for upstarts such as Mr Singleton or Mr Murdoch to broadcast new channels.

Prime Minister John Howard and Communications Minister Richard Alston bought the network's line against the express wishes of just about every one of their official advisors.

The Office of Asset Sales labelled the move "a de facto further grant of a valuable public asset to existing commercial interests".

Prime Minister and Cabinet said there were "better ways of introducing digital television than by granting 7 megahertz of spectrum to each of the five free-to-air broadcasters at no cost when a standard definition service of a higher quality than the current service could be provided with around 2megahertz of spectrum each."

Announcing the gift of so much spectrum, announcing a ban on its use for anything other than HD broadcasting, and announcing a ban on new entrants the minister said he "would normally welcome additional competition, in any industry, as healthy" but that the existing operators needed special treatment because of the cost of installing new equipment.

Franco Papandrea of the Institute of Public Affairs wrote that "if the cost of introducing new technology were to be a legitimate reason for limiting competition, every industry in Australia would be seeking and would be entitled to protection".

I said it was a three-card trick. It had to be, because the truth was we weren't too fussed about near-cinema quality pictures. We wouldn't stump up the money for set-top boxes if all they would offer was smoother-looking versions of the programs we had before. The broadcasters weren't too keen on offering higher quality pictures anyway. Most of what they simulcast on their HD channels was made in standard definition.

The ABC begged for approval to somewhat degrade the quality of its HD signal to allow it to broadcast extra channels that might actually drive demand for the new technology. The government granted the approval but on one very odd condition - the extra channels were not allowed to be very interesting. The could show children's and educational programs but could not show drama, comedy, entertainment or national news, current affairs or sport.

The ABC began broadcasting children's channels and later ABC 2 which was indeed boring until the genre restriction was lifted.

By this time each of the networks had degraded the quality of its HD channel to enable it to broadcast more channels. After all real HD had never been the point. The point had been soaking up free spectrum to prevent anyone else from using it.

The cards having been switched, in the past year the incumbents have been dancing on HD's grave.

Network Ten is using its HD channel to broadcast continuous sports programing under the name ONE HD. It's abandoned the pretense of offering ordinary programs in HD. The ABC, having used up the two extra channels it created by degrading its HD channel is now going to use what remains of the HD channel to broadcast 24 hour news.

And now the networks want compensation. Why they want more compensation given what they've pulled off at public expense is a bit of mystery, and perhaps even a mystery to the minister who handed it out.

In granting them rebates on their license fees of 33 per cent this year and 50 per net next year - government funding - Minister Conroy has variously said it it will protect Australian content, assist with the cost of new equipment, and help the networks as they face increased competition from new media.

On Tuesday he offered an extra explanation - the Free Trade Agreement with the United States. He said the decision was about protecting Australian content but "we are not in a position that we can afford to breach trade obligations". The industry itself had yet another take - it was compensation for the analog spectrum they would lose when the analog signals were finally turned off. Never mind that they have already been compensated and that analog won't be turned off for years.

As with the best conjurer's tricks, its hard to work out how it happened.

Published in today's Age

Fiddling With the Digital TV Tuner Agenda 2009

Digital Three-Card Trick, IPA Reveiw

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