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BROADCASTING SERVICES AMENDMENT BILL 1998

1998



THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA



SENATE













BROADCASTING SERVICES AMENDMENT BILL 1998



EXPLANATORY MEMORANDUM












(Circulated by authority of the Minister for Communications, the Information
Economy and the Arts, Senator the Hon Richard Alston)

BROADCASTING SERVICES AMENDMENT BILL 1998

OUTLINE

The Broadcasting Services Amendment Bill 1998 makes amendments to the Broadcasting Services Act 1992 (the BSA) and consequential amendments to the National Transmission Network Sale Bill 1997 and the Telecommunications Act 1997.

Schedule 1 - Anti-hoarding amendments

The main purpose of the proposed amendments in Schedule 1 is to ensure that opportunities for full and live free to air coverage of major events, particularly sporting events, are maximised by encouraging commercial television broadcasting licensees and national broadcasters to use, rather than hoard, any rights acquired by them to live television coverage of such events.

The amendments propose to achieve this aim by imposing a new licence condition on commercial television broadcasting licensees, and imposing an obligation on licensees’ program suppliers and on national broadcasters, to ensure that the ‘anti-hoarding rule’ is not contravened. A new Part 10A, to be inserted into the BSA by Schedule 1 of the Bill, establishes the new rule.

In summary, the provisions set out a ‘must offer’ regime. A licensee or national broadcaster which has acquired rights to televise live the whole or a substantial proportion of a designated event or series, and which does not intend to fully utilise the rights acquired, will be required to offer to transfer, for a nominal charge, the rights to that part of the event or series which it does not intend to televise live, to the national broadcasters (in the case of rights acquired by licensees), or to the other national broadcaster (in the case of rights acquired by the ABC or SBS).

A licensee’s program supplier which has acquired an entitlement to confer rights on the relevant licensee to televise live the whole or a substantial proportion of a designated event or series, and which does not confer any or all of those rights, will be required to offer to transfer, for a nominal charge, the rights to that part of the event or series which it does not intend to confer on the licensee to the national broadcasters.

The new Part is inserted by item 1 of Schedule 1 of the Bill. Division 1 outlines the scheme in simplified terms and sets out the definitions of relevant terms. It also makes provision for the making of disallowable instruments by the Minister, designating the events or series of events (such as a tournament or competition) which will be subject to this regime. In the same instrument the Minister must designate the time prior to the event or series by which the offer must be made (the “offer time”). That time may vary from event to event.

Division 2 sets out the anti-hoarding rule for commercial television broadcasting licensees. The proposed provisions also recognise both the existing program supply arrangements between metropolitan commercial television broadcasters and regional commercial television broadcasters, and the common practice in the commercial broadcasting industry of acquisition of rights to sporting events by a company set up specifically for this purpose, rather than by the licensee itself. The anti-hoarding rule will also extend to these companies in their role as “program suppliers”.

Division 3 sets out the anti-hoarding rule as it applies to national broadcasters.

Item 2 of Schedule 1 of the Bill inserts into the BSA a mechanism for appeal to the Administrative Appeals Tribunal against a decision by the Australian Broadcasting Authority (ABA) to declare a person to be a program supplier for the purposes of the anti-hoarding provisions.

Item 3 amends the BSA to make compliance with the anti-hoarding rule a condition of each commercial television broadcasting licence.

Schedule 2 - Subscription television programming in regional areas

Schedule 2 imposes restrictions on the provision of certain broadcasting services in regional areas by subscription television broadcasting licensees or their related bodies corporate. Regional areas are defined for this purpose in a way which includes remote areas.

Unless the ABA gives permission in writing, the provision by a subscription television broadcasting licensee, or a related body corporate, of certain broadcasting services in a regional area will be prohibited if the majority of the program material televised on that service during a certain period is the same as the program material televised by a metropolitan commercial television broadcasting licensee during prime viewing hours, Saturday daytime viewing hours or Sunday daytime viewing hours in the previous week.

Unless the ABA gives permission in writing, the provision by a subscription television broadcasting licensee, or a related body corporate, of certain broadcasting services in a regional area is prohibited if a program televised on that service is a designated program and was also televised by a metropolitan commercial television broadcasting licensee at the same time or during the previous week.

Schedule 3 - Retransmission of programs

Schedule 3 of the Bill will insert a new Part 14B into the BSA. This Part establishes a new regime for the retransmission of radio and television programs to replace existing section 212 of the BSA.

Retransmissions that will be exempt from the regulatory regime of the BSA and certain other laws are:

• in relation to the retransmission of a commercial broadcasting service or a community broadcasting service within the licence area applicable to that service -

- a retransmission provided by a self-help provider;

- a retransmission provided in a declared remote area by any person; and

- a retransmission by a subscription television broadcasting licensee or related body corporate, with the agreement of the commercial broadcasting licensee or community broadcasting licensee concerned;

• in relation to the retransmission of a commercial broadcasting service or a community broadcasting service outside the licence area applicable to that service -

- a retransmission by any person, with the permission in writing of the ABA; and

• in relation to the retransmission of a national broadcasting service -

- a retransmission provided by a self-help provider;

- a retransmission provided in a declared remote area by any person; and

- a retransmission by a subscription television broadcasting licensee or related body corporate, with the agreement of the national broadcaster (ABC/SBS) concerned.

Retransmissions provided by self-help providers will be immune from the Copyright Act 1968, and other retransmissions will be as provided for in that Act. It is proposed to bring forward amendments to that Act which will provide a statutory licence to retransmit free to air broadcasting services in declared remote areas which will facilitate viewers in those areas receiving a full suite of available programming.

Division 4 of Schedule 3 contains special provisions relating to metropolitan/regional overlap areas (that is, an area of overlap between the licence area of a metropolitan commercial television broadcasting licence and a regional commercial television broadcasting licence). An obligation is imposed on a subscription television broadcasting licensee or related body corporate who chooses to retransmit a metropolitan commercial television broadcasting service in a metropolitan/regional overlap area, to also retransmit the related regional commercial television broadcasting service in that area, or, if there is no related service, the unrelated regional commercial television broadcasting services in that area. These obligations are subject to the consent of the regional commercial television broadcasting licensee or licensees concerned.

Schedule 3 will extend the licence conditions applicable to commercial broadcasting licensees and community broadcasting licensees contained in Schedule 2 to the BSA, so that the licensee may provide its service outside the licence area where it satisfies the ABA that there are exceptional circumstances and the ABA has given permission in writing.

Schedule 3 also contains some minor transitional provisions relating to the repeal of section 212, and makes consequential amendments to the National Transmission Network Sale Bill 1997 and the Telecommunications Act.

The amendments in Schedules 2 and 3 are complementary to proposed amendments to the Copyright Act which would provide for a new, broad-based technology-neutral right of communication to the public, for broadcasters and owners of underlying copyright material transmitted or broadcast to the public.

FINANCIAL IMPACT STATEMENT

The amendments are expected to have no significant impact on Commonwealth expenditure or revenue.

REGULATION IMPACT STATEMENT

1. SCHEDULE 1 - ANTI-HOARDING AMENDMENTS

Background

The stated objective of the former Government in establishing the ‘anti-siphoning’ regime was to prevent subscription broadcasting licensees acquiring the exclusive rights to broadcast important events that should be freely available to the public. Section 115 of the BSA empowers the Minister to gazette a list of events, or events of a kind, the televising of which the Minister believes should be available free to the general public. The current anti-siphoning list is confined to domestic and international sporting events and has effect from 6 July 1994 to 31 December 2004.

2. Paragraph 10(1)(e) of Schedule 2 of the BSA imposes a condition on subscription broadcasting licensees preventing them from acquiring a right to a listed event until a right has first been acquired by the ABC, SBS or commercial free to air broadcasters reaching more than 50 per cent of the Australian population. Thus, free to air broadcasters have priority over subscription broadcasting licensees for the acquisition of rights to listed events, including those which together comprise a tournament or competition.

3. The current anti-siphoning regime is concerned with measures to ensure that free to air broadcasters have access to broadcast rights to listed events. Occasionally, the free to air broadcasters acquire rights but, for commercial reasons, decide not to fully use those rights. In 1995, legislative amendments were enacted by the previous Government in an attempt to address the problem of ‘hoarding’ of broadcast rights by the free to air broadcasters. In essence, these amendments made it clear that the Minister has the power to remove events from the anti-siphoning list to enable subscription broadcasting licensees to acquire broadcast rights to these events in certain situations, for example, where it transpired that the free to air broadcasters were not interested in acquiring rights, or where, in practice, a free to air broadcaster fails to televise an event, or televises only an unreasonably small proportion of the event. While the legislation has been widely understood as conferring a power on the Minister to ensure that certain events are broadcast on free to air television, there is nothing in the legislation to actively encourage free to air broadcasters to exercise the rights they have acquired.

4. The Minister has recently taken the opportunity to remove events from the anti-siphoning list in the Australia - New Zealand one day cricket series played in February 1998; the 1998 Indian and Sharjah cricket tournaments; and the 1998 and 1999 Hong Kong Sevens rugby tournaments. This has enabled these events to be televised on subscription television when none of the free to air broadcasters expressed an interest in acquiring broadcasting rights.

5. However, the available remedy of removing events from the anti-siphoning list is less likely to be effective in situations where the free to air broadcasters who have acquired rights to events in a major tournament or competition decide, often at short notice, not to televise the events. Such a situation occurred in 1997 when the Nine Network decided not to show the first session of the test matches of the Ashes cricket series being played in England. This decision was taken because Nine did not wish to interrupt its scheduled prime time programming. When one of the test matches coincided with the scheduling of Wimbledon tennis games, Nine agreed to assign the cricket broadcast rights for that test to the ABC.

6. These developments underline the need for an effective mechanism to combat hoarding, while providing alternative avenues for coverage of major events, including events in a series (ie tournaments or competitions), on free to air television. The problems with free to air coverage do not extend to all of the items on the anti-siphoning list, so the solution should contain sufficient flexibility to target areas of concern, for example, coverage of cricket.

7. These changes should be made in a way that does not directly affect the subscription broadcasting industry. The problem involves free to air coverage of programs, so the solution should not have adverse effects for the subscription broadcasting licensees. The current anti-siphoning regime deals with the acquisition of programming, whereas the proposals deal with the free to air coverage of programs after the acquisition has taken place.

1. Problem

8. The problem is to determine how best to encourage free to air television broadcasters to fully utilise the live broadcast rights they acquire to designated events and events in a series.

2. Objectives

9. The objective of the proposed amendments to the BSA is to maximise the coverage on free to air television of a designated event to which a free to air broadcaster has acquired the live right where that broadcaster does not intend to televise the event fully, and to encourage a more complete free to air coverage of sporting tournaments and competitions.

10. The current anti-siphoning rules are administered by the ABA, the independent statutory authority with responsibility for broadcasting. Pursuant to a direction from the Minister, the ABA is required to monitor the acquisition and use of broadcasting rights to listed events and report on, inter alia, any sustained reduction in the free to air coverage of these events.

3. Options

11. There are essentially three options for maximising free to air coverage of a designated event or events in a series. These are:

(a) a ‘must show’ regime;

(b) industry self-regulation; and

(c) a ‘must offer’ scheme.

12. Under a ‘must show’ regime a free to air broadcaster who purchased live rights to a designated event or series of events would be required to televise a substantial portion of each of those events.

13. An alternative approach of industry self-regulation would involve encouraging the free to air broadcasters to develop a voluntary code of practice to address the current problems with televising major events on free to air television. The Minister could seek to use moral suasion to reinforce a voluntary scheme by letting it be known that the Government expected broadcasters to fully utilise rights they had acquired. Ultimately, this regime would effectively allow the broadcasters to continue to exercise their own judgement in determining how much of a listed event or events in a series to televise in situations where they had acquired live broadcast rights.

14. The third option involves the introduction of a ‘must offer’ regime designed to maximise opportunities for free to air broadcasters to televise a designated event or events in a designated series. The Minister would be empowered to designate, by disallowable instrument, the relevant event or class of events to which the scheme would apply.

4. Impact Analysis

Option (a): ‘Must Show’

15. The primary benefit of a ‘must show’ regime would be the absolute guarantee that designated events and series of events would be shown on free to air television where live rights had been acquired.

16. The competition and compliance costs of this certainty would place a heavy burden on the free to air television industry. There are a range of ways that such an option could be administered, but all would involve forcing the broadcasters to televise an event or events in a series that they would otherwise not choose to cover. The substitution of possibly less popular programming on television can also be considered to be a public cost. The broadcasters argue that where they hold live rights and choose not to fully exercise them, they do so because their other programming is more popular.

17. Such a regime would represent a significant intrusion by the Government into programming decisions of commercial and national broadcasters. There would be public concern about the precedent being set and the potential for further intervention in politically sensitive areas. There could also be significant difficulties for the commercial broadcasters, for example where advertising revenue falls during periods where broadcasters were forced to televise less popular programs. This would be exacerbated in cases where the live broadcast of an event took place during prime time when advertising generates premium revenue.

18. Such a regime could also lead to intense lobbying by event organisers and members of the public for the designation of additional events, as designation would ensure free to air coverage. Any additional designations would, of course, increase the burden on the free to air broadcasters.

Option (b): Self-regulation

19. This proposal would have the benefit of allowing the broadcasters to exercise their own judgements in determining how much of a designated event or events in a series to televise in order to satisfy the demands of their viewers. In theory, any judgement about the attractions of a given event would be subject to correction on a subsequent occasion, if it transpired that the broadcaster had underestimated the market appeal of an event.

20. However, in practice, commercial broadcasters in particular are driven by considerations over and above their viewers’ interests. Whilst in theory there should be a coincidence between advertiser preferences and viewing numbers, this may not be the case with events of more marginal appeal. For example, the broadcaster who has acquired the rights may see more of an advantage in withholding an event from a competing free to air broadcaster than in satisfying a marginalised or localised public interest in their own telecasting of the event.
21. Given these competitive pressures, there is no evidence to suggest that broadcasters would be motivated to cooperate in a timely manner which would ensure that the objective of maximising the opportunities for the free to air televising of major events would be achieved.

Option (c): ‘Must Offer’

22. This scheme is based on the premise that free to air broadcasters who have taken advantage of their privileged position under the anti-siphoning rules and acquired live rights to a designated event or events in a series should be made to bear the responsibility of that acquisition by providing free to air coverage themselves or enabling another national broadcaster to televise those events.

23. The national broadcasters have been identified as the appropriate facilitators of the ‘must offer’ regime as the ABC and SBS are less constrained than commercial broadcasters by advertising arrangements and related scheduling decisions. As tax-payer funded organisations with public interest charter responsibilities, it is also appropriate that the national broadcasters assist in meeting the objectives of the anti-hoarding regime of increased free to air coverage of important events (including major sporting events).

24. The proposed scheme involves a legislative provision requiring commercial broadcasters with access to ‘live’ broadcast rights to a designated event or events in a series, to offer to the national broadcasters (for a nominal payment), within a specified time, any rights they do not propose to use by televising those events themselves. Where a national broadcaster does not intend to fully utilise the rights to a designated event or events in a series, the offer of excess rights must be made to the other national broadcaster. Where a broadcaster has live broadcast rights to a substantial proportion of a designated event or series, the ‘must offer’ regime will apply to the rights held.

25. Program suppliers who hold the rights on behalf of a commercial broadcaster will also be subject to the ‘must offer’ regime, where a program supplier includes, for example, a related body corporate to a commercial broadcaster, or a metropolitan commercial broadcaster supplying programming to a regional commercial broadcaster.

26. Requiring the free to air broadcasters to offer rights to designated events for a nominal amount can be considered to be a cost, though as the broadcaster did not intend to broadcast those parts of the event to be offered, the full commercial advantage of the rights will not in any case be realised.

27. These requirements will provide a direct incentive for free to air broadcasters to only acquire live rights to a designated event or events in a series they can actually use, and to fully utilise the rights they do acquire. It will also send a clear signal to the industry and the general public of the Government’s expectations with regard to the televising of designated events and series. In particular, it will discourage a broadcaster from acquiring the live rights to two designated events or series which occur during the same period, where it would be impossible to provide full live coverage of both events or series on the one television channel.

28. In order to ensure the effective operation of the proposed ‘must offer’ scheme, the Minister will be empowered to designate by disallowable instrument the relevant event or series of events to which this requirement applies, and the time by which the rights must be offered to the ABC and SBS.

29. A possible cost of this scheme is a disincentive to the initial acquisition of rights, especially as the broadcasters, in offering the rights for a nominal amount, will not make a full return on the original cost of acquisition. Similarly, the same reasons which might prompt a broadcaster to offer rights might militate against a national broadcaster accepting them. This may be potentially alleviated by ensuring that the national broadcasters have sufficient time to reschedule more popular programming. This scheme could also have some negative effect on competition to the extent that it restricts the full exercise of commercial judgement by the broadcasters. However, this additional restriction on competition can be justified by the benefits to the community as a whole outweighing the potential competition costs.

30. The ‘must offer’ scheme has no direct effect on the subscription broadcasters as the scheme does not affect any of the provisions of the current access regime. The access regime restrains subscription broadcasting licensees from acquiring live rights to listed events until a free to air broadcaster has obtained live rights to that event. The ‘must offer’ regime concerns itself with how the free to air broadcasters use the live rights to events or series specifically designated by the Minister after they have been acquired. This does not directly affect the subscription broadcasting licensees, though it is possible that, for the small number of events that are identified by the ‘must offer’ regime, increased free to air coverage may slightly decrease the value of live subscription broadcasting rights. However, once the ‘must offer’ scheme is in place, it is expected that its direct effects will be reflected in the price subscription broadcasters are prepared to pay for live subscription broadcasting rights.

5. Consultation

31. Consultations have been conducted with the parties affected by the proposed legislation. Although the ABC and SBS are unable to guarantee that they will be able to televise events that are offered to them, they have indicated that they will look at each event as it is offered to them. They have indicated that mutually beneficial arrangements may be developed with the other broadcasters which would give them access to coverage of events to which they would not otherwise have access.

32. The national broadcasters have indicated that they will need to be given adequate notice to enable changes in scheduling to be accommodated. The ABC has indicated that there may be difficulties in disrupting permanent programming to insert on-off events.

33. The Federation of Australian Commercial Television Stations (FACTS) has indicated that the commercial broadcasters will participate in the proposed 'must offer' scheme but has expressed a concern about the scope of the intended requirement. For example, FACTS is concerned that the commercial broadcasters will be obliged to offer the broadcast right to the opening of the second innings of a one day cricket match when this conflicts with news commitments.

6. Conclusion and Recommended Option

34. Option (a), the ‘must show’ regime, may lead to a maximisation of free to air television coverage of designated events or series of events, but would do so in a manner that would place a significant regulatory and commercial burden on the broadcasters. The reduction in competition in the markets for the acquisition and use of broadcast rights would be greater under this option then under options (b) and (c).

35. Option (b), self-regulation, would not effectively address the primary objective of maximising free to air coverage of a major event or series.

36. Of the three options, self-regulation has the least disruptive effect on competition. However, this is also the option that is least likely to solve the identified problem. Experience to date suggests that this public good will not be achieved in the absence of some form of regulation, with the result that some significant sporting events would not be shown in part or at all on free to air television. The ‘must show’ option is the most interventionist of the three, and consequently subverts competition to the greatest extent.

37. Option (c) is the recommended option. The ‘must offer’ scheme represents a balance between the public interest in the free to air coverage of a designated event and events in a series, and the right of broadcasters to make programming decisions. This option is a practicable and workable model which best satisfies the objectives while only involving minimal reduction in competition.

7. Implementation and Review

38. The proposed arrangements would be implemented through amendments to the BSA, and the creation of disallowable instruments by the Minister for the designation of events or classes of events, and the time by which the rights must be offered to the national broadcasters.

39. The ABA will be responsible for advising the Minister, administering the scheme and ensuring compliance - a minor extension of its current responsibility which will not present administrative difficulties for the Authority.

40. The ABA has an established function under section 158(n) of the BSA to monitor, and report to the Minister on, the operation of the Act. In performing this function, the ABA would be expected to report to the Minister on the operation of the proposed ‘must offer’ scheme.


2. SCHEDULES 2 AND 3 - SUBSCRIPTION TELEVISION PROGRAMMING IN REGIONAL AREAS AND RETRANSMISSION OF PROGRAMS

Background - Current Retransmission Arrangements

Section 212 of the BSA currently exempts persons from the regulatory framework established by that Act if they do no more than retransmit:

• a national broadcasting service (ie a broadcasting service provided by the ABC or the SBS), or

• a commercial or community broadcasting service

(i) within a licence area; or

(ii) outside the licence area of that service with the permission of the ABA.

If the person is not a licensee, section 212 provides immunity from any action, suit or proceeding against the person in respect of the retransmission. There is no legal requirement for the retransmitter to obtain the permission of the originating broadcaster or to compensate the broadcaster or the owners of copyright in the underlying material being retransmitted.

2. The current retransmission regime was intended to provide for the distribution of free to air broadcast signals to areas which do not receive adequate reception of services. In essence, the regime was intended to facilitate “self-help arrangements” that is, to enable individuals and communities to make arrangements to access free to air broadcasting services where locational or other reception difficulties mean that signal quality is not adequate or the signal is not available.

3. With the introduction of pay TV into Australia in 1995, cable pay TV operators (such as Foxtel and Optus Vision) began retransmitting the national and commercial television services as ‘free additions’ to their pay TV channels. The cable operators have continued to retransmit these services to their subscribers using the provisions of section 212 of the BSA relating to the national broadcasting and commercial broadcasting services within licence areas. The cable operators have not obtained the permission of the originating broadcasters to such retransmissions and have not provided compensation to the broadcasters or the underlying rights holders.

4. The Full Court of the Federal Court confirmed in 1996 (Amalgamated Television Services Pty Ltd and others v Foxtel Digital Cable Television Pty Ltd and another) that simultaneous and unaltered cable retransmission of free to air television services is allowed within licence/coverage areas without restriction under the current provisions of the BSA and the Copyright Act.
5. In its 1996 Election Policy Statements Better Communications and For Arts Sake - A Fair Go the Federal Coalition supported the general approach adopted by the Copyright Convergence Group (CCG) in its 1994 report Highways to Change: Copyright in the New Communications Environment. The CCG argued that, except in limited circumstances such as where signal quality is inadequate, the ability to retransmit a broadcast should be subject to the ordinary principles of copyright and should require the permission of the relevant copyright owners. Better Communications stated that pay TV operators should be expected to pay for the privilege of using intellectual property that belongs to others.

Problem

6. Current provisions in the BSA allow pay TV operators to retransmit, for commercial purposes, national broadcasting services, and commercial and community broadcasting services within their licences areas, without the consent or compensation of these free to air broadcasters and without compensation of the underlying rights holders. This commercial use of free to air television services without authorisation or compensation is inconsistent with normal commercial practice and unfair to copyright owners.

7. The current provisions of the BSA also allow pay TV operators to retransmit metropolitan commercial television services, and not the related regional service, in areas of metropolitan and regional licence overlap, to the commercial detriment of regional commercial television broadcasters in those areas. These provisions may also allow pay TV operators to re-broadcast commercial television programming from metropolitan sources that is substantially similar to that of regional commercial broadcasters to the commercial detriment of those regional broadcasters. As detailed in the “Background” the retransmissions are made without the consent authorisation of the free to air television broadcasters and compensation is not paid to the free to air broadcasters or underlying copyright holders.

8. An objective of the BSA is to encourage providers of commercial broadcasting services to provide appropriate coverage of matters of local significance. Regional commercial television broadcasters in licence areas which overlap with metropolitan television licence areas are concerned that pay TV operators will only retransmit the metropolitan free to air services in areas of overlap. While commercial television broadcasters in regional areas generally receive much of their programming from one of the three metropolitan commercial broadcasters because of their network affiliations, they also televise some local programming, such as news and sport. Local advertising is a major revenue source, without which regional commercial broadcasting would not be financially viable. Pay TV subscribers in these overlap areas who depend on their pay TV operator for access to retransmitted free to air services will not be able to watch the regional commercial television service. This will have a detrimental effect on advertising revenue for the regional broadcaster.

9. A further concern has been expressed by regional commercial television broadcasters in relation to the possible re-broadcast of distant metropolitan commercial television services by pay TV operators. In such a situation, a pay TV operator may, with the agreement of a metropolitan commercial broadcaster, time delay the broadcast or edit it some way and then re-broadcast the modified metropolitan commercial television service. While such re-broadcasts would not technically be retransmissions, they would have the same essential detrimental effect on the viability of regional commercial television broadcasters who consider that the re-broadcasts would circumvent the licence area concept on which their own services are founded.

10. Amendments to the BSA and the Copyright Act are necessary to address these problems. In considering the application of a general consent provision to the retransmission of national broadcasting services and commercial and community broadcasting services within licence areas, it is necessary to have particular regard to remote areas, where retransmission is sometimes the only way that remote residents can receive a full suite of free to air services on the one set of domestic reception equipment.

11. An object of the BSA is to promote the availability to audiences throughout Australia of a diverse range of radio and television services offering entertainment, education and information. The range of television services that is available to Australians living in remote areas is very limited in comparison with the services available to their metropolitan and regional counterparts. On average, remote residents have access to the services of one or both national broadcasters and only one commercial television broadcaster. These services are currently delivered by satellite transmission. Where the different free to air broadcasters have chosen to use different satellite operators, retransmission enables remote residents to receive a full complement of broadcast services using the one set of domestic reception equipment.

12. Revised copyright provisions to complement the proposed new retransmission regulatory regime are being considered separately in the context of proposed amendments to the Copyright Act.

Objectives

13. The objective of this proposal is to provide a practicable regulatory framework which will:

• permit pay TV operators to retransmit national broadcasting services, and commercial and community broadcasting services within their licence areas, only with the consent (and possible remuneration) of the broadcasters involved and with compensation of the underlying rights holders;

• continue to permit persons, who have the primary purpose of improving or obtaining reception (ie self-help cases) of the national broadcasting services, or commercial or community broadcasting services in their licence area, to retransmit these services without the consent of the originating broadcasters or the need to compensate the originating broadcasters and underlying rights holders;

• enable the retransmission of remote area broadcasting services without the consent of the originating broadcasters in order to allow remote residents to receive a full suite of broadcasting services using the one set of domestic reception equipment;

• ensure that regional commercial television services are retransmitted by pay TV operators in areas of metropolitan/regional licence overlap, if those operators retransmit the related metropolitan commercial television services;

• prohibit, without the permission of the ABA, the retransmission of a commercial or community broadcasting service outside of the licence area for that service; and

• prohibit, without the permission of the ABA, the provision by a pay TV operator in a regional television licence area of metropolitan commercial television programming that is substantially similar to that of a regional commercial television broadcaster.

14. The ABA will be responsible for the administration of the proposed revised retransmission provisions to be incorporated into the BSA.

Options

15. There are three broad options for regulating the retransmission of free to air television services:

(a) allow carriage arrangements to be determined by consent;

(b) introduce a scheme which relies primarily on consent arrangements but provides for limited departures where there is a clear public interest; or

(c) impose a universal must carry regime which would require pay TV operators to carry all free to air television services in their licence/coverage area.

16. Option (a) would give policy priority to the right of free to air television broadcasters to control the use of their broadcast signals and to negotiate the terms and conditions of that use. However, this option would not make any special provision for self-help cases or remote areas or the carriage of regional commercial television broadcasters in areas of metropolitan and regional licence overlap.

17. Option (b) would preserve the primacy of the consent regime while providing scope to waive the need for consent in order to allow retransmission in public interest situations such as self-help cases and in declared remote areas. The terms and conditions of retransmission would normally be subject to negotiation and underlying rights holders would be compensated. However, where the need for consent might compromise carriage arrangements which have a clear public interest, the need for compensation of the primary broadcaster and underlying rights holders would be over-ridden. Option (b) also provides flexibility to enable retransmission of a regional commercial television service where a related metropolitan commercial television service was being retransmitted in an area of metropolitan/regional licence overlap. This will enable pay TV subscribers to receive their local commercial television services in situations where, for example, poor reception makes them dependent on their pay TV service for access to retransmitted free to air signals.

18. Option (c) seeks to ensure that subscribers to pay TV services have access to all local free to air television services, but would override the right of free to air broadcasters to control the commercial use of their broadcast signals. This option could not be fully implemented by all pay TV operators (eg capacity is relatively limited on pay TV services using MDS as the delivery technology).

19. Under each option, amendments would also be necessary to section 212 of the BSA to ensure that the provisions, which require ABA permission for the retransmission of broadcasting services outside of licence areas, would also apply to the transmission in a regional television broadcasting licence area of metropolitan television programming that is substantially similar to programming broadcast by a regional commercial television licensee. This will overcome a possible means of circumventing the retransmission regime and preserve the integrity of commercial television licence areas.

20. The possible introduction of retransmission rules for carriage of additional digital broadcasting services will be addressed separately in developing a policy framework for the introduction of these services.

Impact analysis

Option (a) - Consent

21. This is the only option which would provide for the financial value to both broadcasters and pay TV operators of free to air programs on pay TV services to be established through normal commercial negotiations between the two parties. This option would also provide free to air broadcasters with total control over the commercial use of their signal, whilst allowing pay TV operators the choice of which signals they wish to carry, subject to the consent of the broadcaster. By the same token, it would provide for the remuneration of free to air broadcasters where pay TV operators were willing to pay for retransmission of the broadcast programs, whilst allowing pay service providers to decline to carry free to air services where the asking price was too high. Where there is a coincidence of interest between free to air broadcasters and pay TV operators in disseminating the free to air broadcast signals, it is possible that carriage of the signals themselves could become the established market price for retransmission.

22. Option (a) would, in part, satisfy the Government’s announced support for retransmission arrangements which recognise the property right in the broadcast signal. However, this option would be inconsistent with some of the objects of the BSA - ie those dealing with the availability of diverse broadcasting services to audiences throughout Australia and the provision of appropriate coverage of matters of local significance. For example, option (a) would not address public interest concerns about; possible denial to self-help groups of access to improved reception of broadcasting services; possible denial to residents in declared remote areas of a full suite of remote broadcasting services using a single set of domestic reception equipment; and availability of regional as well as metropolitan television services on pay TV systems. Option (a) would also not address legitimate concerns about the commercial detriment to regional commercial television licensees in areas of metropolitan/regional licence overlap where only metropolitan commercial television services could be retransmitted.

Option (b) - Consent with Public Interest Exceptions

23. This option permits, as a general rule, the free to air broadcasters to control and seek remuneration for the commercial use of their signals and enables compensation of the owners of copyright in the underlying works retransmitted. At the same time, the public interest exceptions will allow the consent and compensation requirements to be over-ridden to allow retransmission by self-help groups to obtain improved reception of broadcasting services, and the consent requirement to be over-ridden in declared remote areas to enable residents to receive a full suite of remote broadcasting services using the one set of domestic reception equipment.

24. Option (b) will also permit, subject to consent and compensation arrangements, a requirement to be placed on pay TV operators for the retransmission of a regional commercial television service, in an area of metropolitan/regional licence overlap, where a pay TV operator proposes to retransmit the metropolitan commercial television signal. This will ensure that pay TV subscribers, who depend on their pay TV systems to receive the retransmitted free to air signals, have access to their local commercial television services and that regional commercial television broadcasters are not commercially disadvantaged in their own licence areas by their metropolitan counterparts. The possibility of involuntary costs being incurred by pay TV operators for the retransmission of regional commercial television programs in the very few areas of metropolitan/regional licence overlap is seen as warranted if regional commercial TV licensees are not to be deprived of advertising revenue and pay TV subscribers the choice of regional TV programs.

25. The general requirement under option (b) for pay TV operators to obtain consent consistent with copyright principles, could result in additional costs for pay TV operators if they choose to retransmit free to air broadcasting services. The order of any additional costs to the sector will be established by commercial negotiations between the broadcasters and the pay TV operators, and will depend on the perceived benefits to the respective parties at the time of negotiation. As with option (a), where there is sufficient mutual interest between the broadcasters and pay TV operators in retransmission, carriage of the signals could prove to be the market price of retransmission. Experience with the US retransmission regime has been that agreements have been in the form of guaranteed carriage or additional capacity, rather than financial payments by the pay TV operators. The proposed new copyright arrangements mean that it is also possible that the parties will be unable to agree on terms of retransmission, with the result that subscribers will be denied access to retransmitted free to air broadcasting programs on their pay TV services, but will still be able to rely on normal free to air reception.

26. Option (b) satisfies the Government’s support for broadcasters’ control over their own signal, overriding this objective only where there is an overriding public interest in facilitating retransmission of the free to air broadcast signal.

Option (c ) - Must Carry by Pay TV Operators

27. This option would override any arrangement to establish the value of free to air signal carriage on pay TV systems through commercial negotiation by the interested parties. The free to air broadcasters would forego both control over the use of their own broadcasting signal and the right to be compensated for the commercial use of the signal. However, carriage of all broadcasting signals - including the less commercially attractive national and regional services - would be guaranteed. For pay TV operators, transaction costs of program acquisition would be removed and they would automatically receive a ‘free’ and currently attractive source of programming. However, by the same token, pay TV operators would be required to carry some free to air services which over time they might otherwise chose not to carry. To the extent that they sought to pass on the additional transmission costs (and copyright costs incurred in compensating underlying rights holders), this option could result in increased costs to their subscribers.

28. Option (c) would not satisfy the Government’s announced support for retransmission arrangements which allow broadcasters to control and be remunerated for the use of their signals. This consideration would, in effect, be seen as secondary to the availability of a high quality broadcasting signal via pay TV systems for those willing to pay for it.

Underlying Rights Holders

29. The Government has agreed to introduce arrangements under the Copyright Act which will require pay TV operators to compensate owners of underlying copyright material in the broadcast where they retransmit free to air broadcasting services. This will bring the Copyright Act into full conformity with Australia’s obligations under the Berne Convention for the protection of literary and artistic works.

30. Option (a) would benefit owners of copyright in underlying works included in broadcasts as pay TV operators would be required to compensate the underlying rights holders for the retransmission of those broadcasts. Currently under the Copyright Act, pay TV operators are not required to provide such compensation.

31. Option (a) would impose new costs on pay TV operators as they would be required to pay copyright owners in underlying works included in broadcasts for the retransmission of those broadcasts. However, the pay TV operators would only be required to pay compensation to underlying copyright owners in those broadcasts which the pay TV operators choose to retransmit through consent arrangements with the free to air broadcaster.

32. As a general rule, option (b) would benefit owners of copyright in underlying works included in broadcasts, as pay TV operators would be required to compensate the underlying rights holders for the retransmission of those broadcasts. As noted above, currently under the Copyright Act, pay TV operators are not required to compensate underlying copyright owners in broadcasts for the retransmission of those broadcasts.

33. Option (b), together with proposed amendments to the Copyright Act, would impose new costs on pay TV operators as they would be required to pay copyright owners in underlying works included in broadcasts for the retransmission of those broadcasts. In areas of metropolitan and regional commercial television licence overlap, pay TV operators may incur additional compensation costs to underlying rights holders by having to retransmit the regional commercial television services even where they only want to retransmit the related metropolitan service. This is warranted on the basis set out in paragraph 27 above.

34. Option (b) would not permit underlying rights holders to seek compensation for the retransmission of broadcasting services by self-help groups. In such cases the amount of compensation involved is likely to be relatively small and its non-availability can be justified on public interest grounds.

35. Option (c) would benefit owners of copyright in underlying works included in broadcasts as pay TV operators would be required to compensate the underlying rights holders for the retransmission of those broadcasts. Currently, under the Copyright Act pay TV operators are not required to pay such compensation.

36. Option (c) would impose new costs on pay TV operators as they would be required to pay copyright owners in underlying works included in all free to air broadcasts for the retransmission of those broadcasts. Option (c) would require pay TV operators to carry all free to air broadcasts in the licence/coverage area, including broadcasts that the pay TV operator might otherwise have chosen not to carry under option (a) or option (b). Therefore, the costs to pay TV operators under option (c) of compensating underlying copyright owners could be greater than under the other options.

Consultation

37. Extensive consultation with interested parties has taken place over an extended period in developing legislative proposals with the object of developing retransmission arrangements that are practicable, workable and balance the competing needs of a majority of the stakeholders.

38. Commercial television licensees prefer an arrangement which requires all commercial broadcasters in an area of operation to agree before retransmission takes place. National broadcasters, and regional commercial broadcasters whose licence areas overlap with metropolitan commercial services prefer a must carry arrangement. Pay television operators would prefer either retention of the current arrangements or an arrangement which mandates the carriage of all services in an area. Underlying rights holders wish to be compensated (except by self-help groups) for the use of their intellectual property no matter what retransmission scheme is put in place.

39. Organisations consulted include the Federation of Australian Commercial Television Stations, Networks Seven, Nine and Ten, representatives of regional broadcasters, the ABC, the SBS, the Australian Subscription Television and Radio Association, the Federation of Australian Radio Broadcasters, Telstra, Optus Communications, the Australian Copyright Council, Audio-Visual Copyright Society, Australian Writers’ Guild, Screen Producers Association of Australia, Australasian Performing Rights Association, the Australian Screen Directors Association and the Australian Film Commission.

Conclusion and recommended option

40. While Option (a) would enable commercial broadcasters to control the commercial use of their signal, it would not adequately protect the interests of self-help groups and remote residents or ensure that regional viewers and commercial television broadcasters are not disadvantaged.

41. Option (c) would ensure the carriage of all free to air television services but would not allow commercial television broadcasters to control the commercial use of their signals.

42. Option (b) is the recommended option. Option (b) represents a balance between the public interest considerations of self-help groups, remote residents, and regional commercial television viewers and broadcasters in areas of service overlap, and the rights of the free to air broadcasters to control the use of their signal. Option (b) is the culmination of an extended development process which has taken into account the views of all stakeholders. Option (b) safeguards those elements of the overall retransmission regime which are most subject to market failure. For the remainder, it is anticipated that, in most cases, there is likely to be sufficient mutual self interest between free to air broadcasters and pay TV operators to ensure carriage of the free to air services under the consent arrangements. The continuing general availability of free to air signals using either an in-door or out-door aerial also argues for a lower level of regulation where there is no overriding public interest consideration. Option (b) is a practicable and workable model which best satisfies the Objectives referred to above and which best satisfies the requirements of the majority of stakeholders.

Implementation and review

43. The proposed arrangements would be implemented through amendments to the BSA and the Copyright Act. A minimum six month period is expected between enactment of the legislative amendments and their proclamation by the Governor-General to enable the conduct of negotiations between the interested parties.

44. Retransmission of free to air broadcasting services will be a normal commercial arrangement between broadcasters and pay TV operators. That is, pay TV operators will have to negotiate with any free to air broadcaster whose service they wish to retransmit about the terms and conditions of carriage. The implementation of arrangements for the compensation of owners of underlying copyright material in the broadcasts by pay TV operators will be part of amendments to be made to the Copyright Act.

45. The ABA will be responsible for administering and ensuring compliance with the new retransmission rules once the BSA is amended.

46. The ABA has a function under section 158(n) of the BSA to monitor, and report to the Minister on, the operation of the Act. In performing this function, the ABA would be expected to report to the Minister on the operation of the new retransmission regime. It is anticipated that, when the new retransmission regime has been in place for 2 years, the Department of Communications and the Arts would consult with representatives of the broadcasting industry and, taking into account reporting by the ABA and the outcome of those consultations, would advise the Minister on whether the legislative scheme had been operating in accordance with the intended policy objectives and whether those objectives are still appropriate.

NOTES ON CLAUSES

Clause 1 Short title

Clause 1 provides for the citation of the Broadcasting Services Amendment Act 1998.

Clause 2 Commencement

Clause 2 of the Bill provides for the Act to commence on Royal Assent, other than Schedules 2 and 3, which are to commence on a day to be fixed by Proclamation.

The amendments in Schedules 2 and 3 are complementary to proposed amendments to the Copyright Act which would provide for a new, broad-based technology-neutral right of communication to the public, which will apply in favour of broadcasters to works transmitted or broadcast to the public.

The standard provisions requiring amendments to commence within 6 months of Royal Assent if not earlier proclaimed have not been included because of the need for Schedules 2 and 3 to commence at the same time as the proposed amendments to the Copyright Act. It is not possible to predict the timing of the Parliament’s consideration of those amendments with any certainty.

Clause 3 Schedules

Clause 3 provides for the making of the amendments or repeals of the Acts as set out in the Schedules to the Bill, and for any other item to have effect according to its terms.

SCHEDULE 1 - ANTI-HOARDING AMENDMENTS

Broadcasting Services Act 1992

Item 1 After Part 10

Item 1 inserts into the Act a new Part 10A entitled “Anti-hoarding rules”.

Division 1 - Introduction

New section 146A Simplified outline

New section 146A sets out a simplified outline of the new Part.

New section 146B Definitions

The terms used in the Part are defined in this section.
The definition of “coverage area” is relevant to national broadcasters. National broadcasters do not hold licences to broadcast in particular areas. However, a commercial television broadcasting licensee may only offer to a national broadcaster the rights it holds to broadcast a particular event or part thereof, and these rights can relate only to its licence area. The coverage area of a national broadcaster for that purpose is therefore an area that corresponds geographically to a commercial television licence area.

The term “live” is defined as having the meaning generally accepted within the television industry. The industry regards an event as being televised live even though there may be some delay in the televising (for example, due to technical delays with satellite transmission links).

The term “supply” is defined to include the conferral of rights to televise programs. This recognises that a program supplier (as defined in section 146D - see below) may not necessarily acquire actual programs to supply to licensees, but may simply acquire the rights to televise an event or a series of events.

New section 146C Designated events and designated series of events

This new section provides for the Minister to make declarations designating events and series of events for the purposes of the Part. Such declarations are also to include the time by which an offer must be made in relation to a particular designated event or series.

New subsection 146C(1) provides for the Minister to declare in writing that a specified event (for example, a one day cricket match) is a designated event for the purposes of the Part. New subsection 146C(2) enables a similar declaration about a series of events. The term ‘series’ is included to cover tournaments and competitions (such as the Ashes cricket series). The notes accompanying these subsections refer to subsection 46(2) of the Acts Interpretation Act 1901, which makes it clear that in making a declaration under either subsection the Minister can identify the designated event or series by referring to a class of events or a class of series.

It is envisaged that the Minister will only use his designation power in limited circumstances. For example, the Minister may designate an event or series where there is a widespread public expectation, based on past practice, that the event or series will be televised live and in full on free to air television. A declaration under this subsection might also be made where events have so grown in importance in the public’s perception over time that the Minister considers that they warrant free to air full live coverage, even though this may not have been the case previously.

New subsection 146C(3) makes it clear that the Minister may designate an event even if the event is part of a series. This gives the Minister flexibility to nominate different offer times (see new subsection 146C(4), below) for different events in a series (for example, each test match in the Ashes cricket series).

New subsection 146C(4) provides that a declaration under subsections (1) or (2) must also designate an offer time in relation to the designated event or series. The offer time is a time that is ascertained in accordance with the declaration, that is, the declaration may state the time itself or may state a formula for calculating that time. The time ascertained will occur before the start of the event or series. It is expected that the Minister would take into account industry practice with respect to program acquisition and scheduling when determining the offer time with respect to any particular event or series to be included in the designation notice.

New subsection 146C(5) gives effect to a declaration under new section 146C.

New subsection 146C(6) provides that a declaration is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act. A declaration may also be varied or revoked in accordance with subsection 33(3) of that Act.

New section 146D Program suppliers

New subsection 146D(1) states that this section sets out three situations in which a person is a “program supplier” for the purposes of the Part. Subsections 146D(2), (3) and (4) set out those three situations.

The first situation is intended to deal with metropolitan commercial television licensees which supply programs to affiliated regional licensees pursuant to affiliation agreements. These metropolitan licensees are “program suppliers” for their affiliates under subsection (2) because, over the period of the program supply agreement between them, they supply or may reasonably be expected to supply the affiliated licensee with at least two-thirds of all the sporting or prescribed programs that are, or are to be, televised by the affiliated licensee. The reference to prescribed programs is to programs prescribed in regulations. Regulations could be made to prescribe programs under this subsection if it appeared that events or series of events other than sporting events or series were likely to be designated, or had been designated, by the Minister under section 146C.

The second situation is set out in subsection 146D(3). It is a common practice in the commercial television industry that a company related to the licensee has the specific role of acquiring the rights to program material (particularly sporting events) for supply to the licensee. This new subsection deems to be the licensee’s program supplier a related body corporate (within the meaning of that term in the Corporations Law) which supplies or proposes to supply the licensee with any sporting or prescribed programs that are, or are to be, televised by the licensee.

The third situation, set out in subsection (4), is intended to reduce any incentive for a licensee to avoid the application of this new Part by creating a program acquisition company which is not a related body corporate of the licensee. The ABA may declare that a person is a program supplier of a licensee if the person supplies or proposes to supply the licensee with sporting or prescribed programs and the ABA is satisfied that the person should be treated as the licensee’s program supplier. The ABA is required to have regard to the purpose underlying the Part, whether the relationship between the licensee and the person was entered into or maintained for the sole or dominant purpose of avoiding the application of these new provisions, and any other matters it considers relevant.

The reference to ‘any other relevant matters’ might cover, for example, the type of relationship between the person and the licensee - for instance, whether the licensee holds any company interests (shares, voting interests, dividend interests, winding up interests) in the person, or vice versa, or whether company interests are held in both the licensee and the person by any other person. The nature of any program supply arrangements between the licensee and the person will also be a relevant matter - their exclusivity for example. It is intended, for example, that the ABA would not declare a bona fide rights broker, who was willing to and did supply programs to any person who would pay the required price for them, to be a program supplier under this provision. In this case there would be no avoidance purpose, and the broker’s bona fides, the non-exclusivity of its arrangements with the licensee and the fact that it had supplied programs to different networks would be relevant matters for the ABA to take into account.

On the other hand, where a regionally based commercial television licensee is not an affiliate of a metropolitan network but instead “cherry picks” programs from more than one network, the provision for an ABA declaration gives scope for the ABA to declare any network that provides sporting or prescribed programs to that licensee to be its program supplier, in accordance with the anti-hoarding purpose of the new Part.

A declaration under subsection 146D(4) must be published in the Gazette and a copy given to both the affected licensee and the declared program supplier (subsection 146D(6)).

Division 2 - Commercial television broadcasting licensees

New section 146E Anti-hoarding rule - licensees

New subsection 146E(1) sets out the anti-hoarding rule as it applies to commercial television broadcasting licensees. The rule applies where a licensee has a right to televise live in its licence area the whole of a designated event or designated series and that right was acquired after the event or series was designated. Such a licensee which either does not televise any part of the event or series, or televises some but not all of it, contravenes the rule if neither the licensee nor its program supplier, before the offer time for the event or series, offers to transfer to each national broadcaster the right to televise live in the corresponding coverage area the relevant non-televised portion of the event or series (the whole or the remainder, as the case may be). Note that in the case where both the licensee and its program supplier hold live television rights to a designated event or designated series of events and the licensee does not televise some or all of the event or series, the licensee which does not offer the unused rights to the national broadcasters will not have contravened the anti-hoarding rule if its program supplier has made such an offer.

The note accompanying this subsection draws attention to the fact that it is a condition of a commercial television broadcasting licence that the rule is not contravened (see clause 7 of Schedule 2 of the BSA as amended by item 3 of this Schedule of the Bill). The term “contravene” is used in the sense referred to in paragraph 22(1)(j) of the Acts Interpretation Act of “fail to comply with”.

New subsection 146E(2) makes it clear that a licensee is taken to have televised live the whole of an event or series as referred to in subsection (1) if the licensee televises all but an insubstantial proportion of the event or series. Examples of items that would constitute an “insubstantial proportion” are given in the accompanying note. They include news breaks and commercials. Clearly, if a licensee failed to televise, for example, the first session of a test cricket match included in a declaration under new section 146C, this would constitute a substantial rather than an insubstantial proportion of the event or series.

New subsection 146E(3) relates to the right acquired by a licensee to televise live the “whole of a designated event”, as referred to in subsection (1). This subsection states that section 146E has effect on a substantial proportion of a designated event as if that proportion is a designated event in its own right. New subsection 146E(4) operates similarly in relation to a series of events. A licensee cannot therefore avoid the application of the rule in subsection (1) by acquiring the right to televise only a substantial proportion, rather than the whole, of a designated event or series.

New section 146F Anti-hoarding rule - program suppliers

This new section sets out the anti-hoarding rule as it applies to program suppliers. New subsection 146F(1) makes it an offence for a program supplier to intentionally or recklessly contravene the anti-hoarding rule.

The anti-hoarding rule is set out in new subsection 146F(2). It applies where a commercial television licensee’s program supplier is entitled to confer on the licensee the right to televise live in the licensee’s licence area the whole of a designated event or designated series and that entitlement was acquired after the event or series was designated. The program supplier contravenes the rule if it either did not confer that right or conferred the right to televise some but not all of the event or series, and the program supplier did not, before the offer time for the event or series, offer to transfer to each national broadcaster the right to televise live in the corresponding coverage area the relevant non-conferred portion of the event or series (the whole or the remainder, as the case may be).

New subsections 146F(3) and (4) make it clear that section 146F has effect on a substantial proportion of a designated event or series as if that proportion is a designated event or series (as the case may be) in its own right. These provisions ensure that a program supplier cannot avoid the application of the rule in subsection (2) by being entitled to confer on a licensee a right to televise live only a substantial proportion, rather than the whole, of a designated event or series.
New subsection 146F(5) ensures the constitutional validity of new section 146F by providing that the section cannot authorise an invalid acquisition of property within the meaning of paragraph 51(xxxi) of the Constitution. New subsection 146F(6) defines terms used in subsection (5).

New section 146G What constitutes an offer to transfer rights to televise live events

New subsection 146G(1) provides that a licensee or program supplier is taken to have made an offer to a national broadcaster to transfer the live rights to whole or part of a designated event or series if, and only if, that offer is to make an arrangement which in substance gives the national broadcaster the relevant rights.

New subsection (2) provides that, in determining whether an arrangement is of the type referred to in subsection (1), the practical effect of the arrangement is to be considered.

New section 146H Offers to transfer rights to televise live events

This new section deals with the form and timing of offers by commercial television licensees and program suppliers to each of the national broadcasters.

The reference to the “first national broadcaster” in new subsection 146H(1) is a drafting device which is used to make it clear that the various obligations created by the section in relation to a particular offer apply to the national broadcaster to whom the offer is made (termed the “first national broadcaster”). The section applies to each national broadcaster in relation to the offer made to that broadcaster.

An offer must be in writing (subsection 146H(2)) and must be given to the Managing Director of a national broadcaster (subsection 146H(3)) at or about the same time that a corresponding offer is given to the Managing Director of the other national broadcaster (subsection 146H(4)).

The offer must be open from the time it is made until immediately before the beginning of the event or series (subsection 146H(5)).

New subsection 146H(6) requires that the offer must require the national broadcaster to whom the offer is made to promise to pay a nominal sum ($1) to the licensee or program supplier making the offer, if and when demanded. This promise constitutes the only ‘consideration’, and the arrangement thereby becomes a contract with the attendant legal remedies.

New subsection 146H(7) ensures that the first national broadcaster to accept the offer will be certain that it will gain the rights. However, that broadcaster will be able to consent in writing to the other national broadcaster also accepting the offer. It is intended by this provision to allow the ABC and SBS to engage in complementary broadcasting of a designated event or series if they agree to do so.

If both acceptances occur simultaneously the licensee or program supplier may choose to treat one acceptance as having preceded the other. Again, if the national broadcaster whose acceptance is regarded as having precedence so wishes, it may consent in writing to the other national broadcaster’s acceptance also having effect, so that arrangements for complementary broadcasting of the event or series may be entered into (new subsection 146H(8)).

New section 146J Contracts to acquire rights to televise live events must authorise the transfer of the rights

This new section prohibits a licensee or program supplier from entering into a rights acquisition contract unless that contract authorises the acquiring party to make the kind of offer required by section 146E or 146F, as the case may be (new subsections 146J(1) and (2)). These provisions also cover other contracts (such as ‘Heads of Agreement’) under which a program supplier or licensee may gain a right to acquire, in the future, live television rights to a designated event or series, or under which a program supplier may become entitled, in the future, to confer such rights on a licensee.

Any contract which contravenes this provision is void (new subsection 146J(3)).

New section 146K Simultaneous events in a series

New subsections 146K(1) and (2) apply to commercial television broadcasting licensees. These provisions recognise customary industry practice with respect to the live televising of series, that is, where events in a series overlap in time, a licensee will make an election as to which events it will televise (generally based on commercial considerations). Subsection 146K(1) provides that where there are two or more events in a designated series which wholly or partly overlap in time, and the licensee televises live one of them, the licensee is to be taken to have televised live the other overlapping events. So, for example, if a licensee has the live rights to the Wimbledon tennis tournament, and televises the match on central court, the licensee will be taken to have televised all the other matches taking place at the same time as that televised match. The intention of this provision is to ensure that a licensee does not contravene the licence condition concerning anti-hoarding in these circumstances.

New subsections 146K(3) and (4) make similar provision for program suppliers entitled to confer live television rights on licensees. These provisions ensure that a program supplier in this circumstance will not contravene the provisions of section 146F where the licensee on which the program supplier has conferred the right to televise the televised event follows customary industry practice with respect to the live televising of the series.

Division 3 - National broadcasters

New section 146L Anti-hoarding rule

New section 146L sets out the anti-hoarding rule as it applies to national broadcasters. It is the duty of the Board of each of the national broadcasters to ensure that the national broadcaster does not contravene applicable provisions of any Act, including the BSA (see paragraph 8(1)(d) of the Australian Broadcasting Corporation Act 1983 and paragraph 10(1)(d) of the Special Broadcasting Service Act 1991).

New subsection 146L(2) applies to a national broadcaster which has a right, acquired after designation of an event or series, to televise live in a coverage area the whole of that event or series. The national broadcaster contravenes the rule if it either does not televise any part of the event or series, or televises some but not all of it, and does not, before the offer time for the event or series, offer to transfer to the other national broadcaster the right to televise live in that area the relevant non-televised portion of the event or series (the whole or the remainder, as the case may be).

New subsections 146L(3), (4) and (5) are in similar terms to subsections 146E(2), (3) and (4). The two notes to subsection (3) set out examples of interruptions to televised events or series which would result in an insubstantial proportion of the event or series not being televised; for example, announcements by the ABC (which may be made under paragraph 31(2)(a) of the Australian Broadcasting Corporation Act).

New subsection 146L(6) provides that the section does not apply to rights acquired by a national broadcaster from a commercial television broadcasting licensee or a program supplier, or from the other national broadcaster, pursuant to the anti-hoarding provisions.

New section 146M What constitutes an offer to transfer rights to televise live events

This new section mirrors new section 146G and in effect provides that it is the substance, rather than the form, of an offer that is relevant for the purpose of the application of the anti-hoarding rule in section 146L to the national broadcasters.

New section 146N Offers to transfer rights to televise live events

New section 146N applies to offers of live television coverage rights by one national broadcaster to the other. Its provisions are in similar terms to new subsections 146H(2), (3), (5) and (6). See the notes on those new subsections.

New section 146P Contracts to acquire rights to televise live events must authorise the transfer of the rights

New section 146P is in similar terms to new subsections 146J(1) and (3), and covers contracts such as ‘Heads of Agreement’ under which a national broadcaster may gain a right to acquire, in the future, live television rights to a designated event or series.

New section 146Q Simultaneous events in a series

This new section mirrors new subsections 146K(1) and (2). See the notes on those new subsections.

Item 2 Section 204

This item amends section 204 of the BSA to make available administrative review by the Administrative Appeals Tribunal of an ABA decision under new subsection 146D(4) declaring a person to be a licensee’s program supplier.

Item 3 After paragraph 7(1)(h) of Schedule 2

This item inserts a new paragraph, paragraph (ha), into clause 7(1) of Schedule 2 of the BSA. It thereby becomes a condition of a commercial television broadcasting licence that the licensee will not contravene the anti-hoarding rule set out in new section 146E. Any contravention of this condition will attract the application of any of the usual sanctions for breach of a licence condition set out in Division 3 of Part 10 of the BSA, including prosecution, or suspension or cancellation of the licensee’s commercial television broadcasting licence. The ABA also has power under section 43 of the BSA to impose additional conditions on a licence, including a condition designed to ensure that a breach by a licensee of a condition does not recur (subsection 44(2) of the BSA).

SCHEDULE 2 - PAY TV PROGRAMMING IN REGIONAL AREAS

Item 1 After Part 8

This item inserts a new Part 8A into the BSA, which deals with restrictions on the provision of television services by subscription television broadcasting licensees and their related bodies corporate in regional areas.

Division 1 - Introduction

Proposed section 121A Simplified outline

Proposed section 121A contains a simplified outline of new Part 8A of the BSA.

Unless the ABA gives permission, a subscription television broadcasting licensee, or a related body corporate, must not provide a television service in a regional area if a majority of the program material televised on that service is the same as that televised by a metropolitan commercial television broadcasting licensee.

New section 121B Definitions

New section 121B contains definitions of key terms used in new Part 8A.

New section 121C Designated programs

New section 121C defines the term “designated program” for the purposes of new Part 8A. Subsection 121C(1) empowers the Minister to declare, by writing, that a specified program is a designated program for the purposes of Part 8A. The rule in new subsection 121D(2) applies to designated programs (see explanatory notes below). Any such declaration will be a disallowable instrument.

Division 2 - ABA permission required to provide certain television
services in regional areas

New section 121D Circumstances in which ABA permission is required

Subsection 121D(1) would prohibit, unless the ABA gives permission in writing, the provision by a subscription television broadcasting licensee, or a related body corporate, of a subscription television broadcasting service, a subscription television narrowcasting service or an open narrowcasting television service in a regional area, if the majority of the program material televised on that service during a certain period is the same as the program material televised by a metropolitan commercial television broadcasting licensee during prime viewing hours, Saturday daytime viewing hours or Sunday daytime viewing hours in the previous week.

Prime viewing hours is defined in new section 121D to mean the hours from 6 pm to 10.30 pm each day, or the hours between some other prescribed times on that day. Saturday daytime viewing hours means the hours from 10 am to 6 pm each Saturday, or the hours between some other prescribed times on each Saturday. Sunday daytime viewing hours is defined in similar terms. The mechanism to provide different hours in regulations is included to enable the viewing hours of greatest commercial interest to be more precisely specified, if necessary.

Subsection 121D(2) would prohibit, unless the ABA gives permission in writing, the provision by a subscription television broadcasting licensee, or a related body corporate, of a subscription television broadcasting service, a subscription television narrowcasting service or an open narrowcasting television service in a regional area, if a program televised on that service is a designated program and was also televised by a metropolitan commercial television broadcasting licensee at the same time or during the previous week.

A designated program is a program declared to be a designated program for the purposes of Part 8A by the Minister under new subsection 121C.

This rule, along with the mechanism for the Minister to declare a particular program to be a designated program, is included to enable action to be taken where the proposed rule in subsection 121D(1) is being avoided by the televising of particular commercially attractive programming in a way which does not infringe the primary rule. For example, such programs may comprise the re-broadcast of a metropolitan commercial television licensee’s coverage of a particular sporting event which would not normally be available in the regional area.

The prohibitions in subsections 121D(1) and (2) would apply unless the ABA gives its permission in writing to the provision of the particular service. It is recognised that in certain circumstances the overall public interest will require particular program material, for example, the Year 2000 Olympics, to be available as widely as possible to Australian audiences. It will be appropriate for the ABA to give permission in such circumstances.

Item 2 Section 204

Section 204 of the BSA sets out a table listing the decisions for which an application may be made to the Administrative Appeals Tribunal (AAT) for review. The table also sets out the persons affected by each decision who may make such an application.

This item would amend the table in section 204 by including two further decisions for which review by the AAT may be sought.

A refusal of permission under section 121D (see the explanatory notes to new section 121D above) would be subject to an application for review by the AAT by the subscription television broadcasting licensee or the related body corporate, as the case may be, who has sought the ABA's permission.
A grant of permission under new section 121D would be subject to an application for review by affected regional television broadcasting licensees, that is, by a commercial broadcasting licensee any part of whose licence area is included in the regional area concerned.

Item 3 After paragraph 10(1)(e) of Schedule 2

Clause 10 of Schedule 2 to the BSA sets out conditions applicable to subscription television broadcasting licences.

This item inserts a new condition in clause 10(1) of Schedule 2, requiring a subscription television broadcasting licensee to comply with section 121D (see explanatory notes to new section 121D above).

Item 4 After paragraph 11(1)(a) of Schedule 2

Clause 11 of Schedule 2 to the BSA sets out conditions applicable to the provision of broadcasting services under class licences.

This item inserts a new condition in clause 11(1) of Schedule 2, requiring a person who provides an open narrowcasting television service or a subscription television narrowcasting service to comply with section 121D (see explanatory notes to new section 121D above).

SCHEDULE 3 - RE-TRANSMISSION OF PROGRAMS

Broadcasting Services Act 1992

Item 1 At the end of section 204

Section 204 of the BSA sets out a table listing the decisions for which an application may be made to the AAT for review of the decision. The table also sets out the persons affected by each decision who may make such an application.

This item would amend the table in section 204 by including further decisions for which review by the AAT may be sought.

A refusal of permission under subsection 205P(1) (see the explanatory notes to new section 205P below) would be subject to an application for review by the AAT by the person seeking the ABA’s permission.

A grant of permission under new subsection 205P(1) would be subject to an application for review by a commercial broadcasting licensee, or a community broadcasting licensee, as the case may be, in whose licence area the retransmitted service would be provided.

A refusal of permission under new paragraphs 7(2)(d), 8(2)(c) and 9(2)(d) of Schedule 2 to the BSA (see the explanatory notes to items 4, 5 and 6 below respectively) would be subject to an application for review by the licensee concerned.

A grant of permission to a licensee (the first licensee) under new paragraphs 7(2)(d), 8(2)(c) and 9(2)(d) of Schedule 2 to the BSA would be subject to an application for review by a commercial radio broadcasting licensee, commercial television broadcasting licensee, or a community broadcasting licensee respectively, in whose licence area the first licensee is seeking to provide the particular broadcasting service.

Item 2 New Part 14B - Re-transmission of programs

Item 2 inserts new Part 14B into the BSA. This Part establishes a new regime for the retransmission of radio and television programs to replace existing section 212 of the BSA.

Existing section 212 of the BSA exempts retransmissions of:

• national broadcasting services;

• commercial broadcasting services and community broadcasting services within the licence area of the particular licence; and

• commercial broadcasting services and community broadcasting services outside the licence area of the particular licence, with the permission of the ABA;

from the regulatory regime established by the BSA.
Existing section 212 also provides immunity from certain other laws in respect of those retransmissions to persons who are not licensees.

This immunity includes immunity from the Copyright Act, so that currently royalties are not payable under that Act for exempt retransmissions of free-to-air broadcasts.

As stated above in the Regulatory Impact Statement, section 212 was intended to facilitate the provision of self-help retransmissions but has been used for unintended purposes with the introduction of pay TV into Australia in recent years. Some pay TV operators have been using the provisions in section 212 to retransmit national broadcasting services and commercial broadcasting services without the consent of the particular broadcaster and without paying copyright royalties.

New Part 14B will address this situation by ensuring that subscription television broadcasting licensees and their related bodies corporate will be subject to the provisions of the Copyright Act.

Division 1 - Introduction

New section 205E Simplified outline

This section sets out a simplified outline of new Part 14B. In simplified terms, it sets out the retransmissions that are exempt from the regulatory regime established by the BSA.

New section 205F Scope of Part

New Part 14B deals with retransmissions of certain broadcasting services that are exempt from the regulatory regime established by the BSA.

It is not intended that these exemptions apply to the provision by a broadcaster of its broadcasting service in accordance with its licence or enabling legislation. Any retransmission by a broadcaster of its own service, for example, by the use of a translator, is considered to be part of the delivery of the broadcasting service to its audience and is regulated as provision of the particular broadcasting service concerned.

New subsections 205F(1) and (2) therefore exclude from the scope of new Part 14B retransmission by a commercial broadcasting licensee or a community broadcasting licensee respectively of the licensee’s own service.

Similarly, new subsections 205F(3) and (4) exclude from the scope of new Part 14B retransmission by the ABC of any of its national broadcasting services and retransmission by the SBS of any of its national broadcasting services respectively.

New subsection 205F(5) would exclude from the scope of Part 14B retransmission of parliamentary broadcasting services provided under the Parliamentary Proceedings Broadcasting Act 1946. That Act deals specifically with re-broadcasts of parliamentary proceedings (see especially sections 14 and 15 of that Act).

New section 205G Definitions

New section 205G contains definitions of key terms used in Part 14B.

New section 205H Declared remote area

New section 205H provides a definition of the term “declared remote area” for the purposed of new Part 14B. Subsection 205H(1) gives the ABA the power to determine, by writing, that a specified area is a declared remote area for the purposes of new Part 14B.

It is expected that the ABA will, in most cases, determine existing remote commercial television licence areas to be “declared remote areas”.

A retransmission of a commercial broadcasting service and community broadcasting service within the licence area of the particular service (under new subsection 205N(2)), and a national broadcasting service (under new section 205V(2)), will be exempt from the regulatory regime established by the BSA, where the retransmission is within a declared remote area.

Any declaration made under this section will be a disallowable instrument.

New section 205J Self-help providers

This new section would insert a definition of the term “self-help provider” for the purposes of the retransmission regime in Part 14B. The provision of self-help services occurs in a variety of contexts, including in small communities (often in isolated areas), in houses and homesteads, and in hospitals, hotels, apartment buildings and other settings.

The term “self-help provider” is therefore defined to mean:

• a non-profit body which provides the retransmission for the sole or principal purpose of obtaining or improving reception in a small community (paragraph 205J(1)(a));

• a local government body which provides the retransmission for the sole or principal purpose of obtaining or improving reception in a community (paragraph 205J(1)(b));

• a company which operates a mine, or petroleum, oil or gas installation, or related infrastructure, at an isolated location and which provides the retransmission for the sole or principal purpose of obtaining or improving reception in a community near the relevant site that accommodates the whole or part of the particular workforce (paragraphs 205J(1)(c) and (d));

• a person who provides the retransmission within a building or structure for the sole or principal purpose of obtaining or improving reception for persons in the building or structure (paragraph 205J(1)(e)). This paragraph is intended to cover in-building cabling of apartment buildings and hotels;

• a person who provides the retransmission within one or more places that are all in the same area (within the meaning of section 36 of the Telecommunications Act) for the sole or principal purpose of obtaining or improving reception for persons in those places (paragraph 205J(1)(f)). This paragraph is intended to cover in-building cabling of sites where there is more than one building on one land title, or more than one land title if the properties are contiguous and there is a principal user of all of them, for example, a hospital; and

• a person who is a declared self-help provider in relation to the retransmission (see explanatory notes to new section 205K).

The definition of self-help provider does not include a subscription television licensee or a related body corporate, or a person who is an excluded provider in relation to the retransmission (see explanatory notes to new section 205K).

New section 205K Declared self-help providers and excluded providers

New subsection 205K(1) empowers the Minister, by writing, to determine that a specified person who provides a retransmission of programs for the sole or principal purpose of obtaining or improving reception (and, in subsection 205K(2), in specified circumstances) is a “declared self-help provider” in relation to the retransmission for the purposes of new Part 14B.

While the definition of “self-help provider” in new section 205J of the Bill is intended to cover the main circumstances in which self-help retransmissions are occurring of which the Government is aware, it is considered appropriate that the Minister have the power to declare additional persons to be self-help providers to deal with any anomalous situations which arise during the operation of the legislation.

New subsection 205J(2) makes it clear that the powers in new subsections 205K(1) and (2) are not to be read down by reference to anything in new subsection 205J(1).

Subsection 205K(3) empowers the Minister, by writing, to determine that a specified person who provides a retransmission of programs (and, in subsection 205K(4), in specified circumstances) is an “excluded provider” in relation to the retransmission for the purposes of new Part 14B.

It is considered appropriate that the Minister have these powers to deal with a situation where a person who would not be a “self-help provider” sought to avoid to operation of the retransmission rules. For example, this power could be used to exclude a local government body which undertook to provide the service on behalf of a pay TV broadcaster to enable the pay TV broadcaster to avoid the operation of the rules.

New subsection 205J(2) makes it clear that the powers in new subsections 205K(3) and (4) are not to be read down by reference to anything in new subsection 205J(1).

Any declarations made under this section will be disallowable instruments.

New section 205L Metropolitan/regional overlap area

This new section will define the term “metropolitan/regional overlap area” for the purposes of new Part 14B as the part of a metropolitan licence area of a commercial television broadcasting licence which is within a regional licence area of a commercial television broadcasting licence.

This term is used in the rules in new section 205W relating to the mandatory retransmission of certain programs in metropolitan/regional overlap areas by subscription television broadcasting licensees or related bodies corporate (see explanatory notes to new section 205W).

New section 205M Related regional commercial television broadcasting licensee

This section defines when a regional commercial television broadcasting licensee is related to a metropolitan commercial television broadcasting licensee for the purposes of new Part 14B, and, in particular, the rules in new section 205W relating to the mandatory retransmission of certain programs in metropolitan/regional overlap areas by subscription television broadcasting licensees or related bodies corporate (see explanatory notes to new section 205W).

A regional commercial television broadcasting licensee will be related to a metropolitan commercial television broadcasting licensee at a particular time if:

• a majority of the program material televised by the regional licensee during the previous week is the same as that televised by the metropolitan licensee during that week; and

• a part of the regional licensee’s licence area is within the metropolitan licensee’s licence area.

For the purposes of determining whether a majority of the program material is the same, advertising and sponsorship matter is disregarded (new subsection 205M(2)).

Division 2 - Commercial broadcasting services and community broadcasting services

Subdivision A - Exemptions

New section 205N Retransmission of programs within the licence area of a commercial broadcasting licensee or a community broadcasting licensee

This section sets out the retransmissions of commercial broadcasting services and community broadcasting services within the licence area of the service that are exempt from the regulatory regime established by the BSA and certain other laws.

The regulatory regime established by the BSA does not apply to a service that does no more than retransmit, within the licence area of a commercial broadcasting licence or a community broadcasting licence, programs that are transmitted by the commercial broadcasting licensee or community broadcasting licensee concerned if:

a) the retransmission is provided by:

• a self-help provider; or

• a subscription television broadcasting licensee or a related body corporate, with the agreement of the commercial broadcasting licensee or community broadcasting licensee concerned (new subsection 205N(1)); or

b) the retransmission occurs within a declared remote area (new subsection 205N(2)).

Retransmissions provided by a self-help provider under subsection 205N(1) will be immune from the Copyright Act - self-help providers will not be required to seek the permission of the owner of the copyright in the broadcast or the owner of the underlying copyright material in the broadcast, and they will not be liable to pay royalties in respect of those rights (new subsection 205N(3)).

Other retransmissions mentioned in subsections 205N(1) and (2) will be subject to the provisions of the Copyright Act. It is proposed to bring forward amendments to that Act which will provide for a statutory licence to re-transmit free to air broadcasting services in declared remote areas, which will facilitate viewers in those areas receiving a full suite of available programming.

Persons providing retransmissions mentioned in subsections 205N(1) and (2) will be protected from suit, other than under the BSA or the Copyright Act, in relation to the content of the services broadcast (new subsection 205N(4)). The technology used to make the retransmission may be subject to authorisation under the Radiocommunications Act 1992 or the Telecommunications Act, whichever is relevant, consistent with the technological neutrality of the BSA.

Should a person providing a retransmission wish to alter the service in any way, that is, by inserting local news items, advertising material or community announcements, the “retransmitted” service, including the inserts, would not continue to be a retransmission and would constitute a separate broadcasting service which would fall within the licence categories provided for in Part 2 of the BSA.

Any retransmissions which are delayed beyond what is necessary to make adjustments for different time zones will continue to be taken to be separate services which may require a separate individual licence, or may come under one of the class licence categories, and must comply with conditions of the relevant licence.

It is not intended to depart from the meaning given to the term “retransmission” in the 1996 decision of the Full Court of the Federal Court in Amalgamated Television Services Pty Ltd and others v Foxtel Digital Cable Television Pty Ltd and another.

New section 205P Retransmission of programs outside the licence area of a commercial broadcasting licensee or a community broadcasting licensee

This section sets out the retransmissions of commercial broadcasting services and community broadcasting services outside the licence area of the service that are exempt from the regulatory regime established by the BSA and certain other laws.

The regulatory regime established by the BSA does not apply to a service that does no more than retransmit, outside the licence area of a commercial broadcasting licence or a community broadcasting licence, programs that are transmitted by the commercial broadcasting licensee or community broadcasting licensee concerned if the retransmission is in accordance with permission in writing given by the ABA (new subsection 205P(1)).

Retransmissions provided by a self-help provider under subsection 205P(1) will be immune from the Copyright Act - self-help providers will not be required to seek the permission of the owner of the copyright in the broadcast or the owner of the underlying copyright material in the broadcast, and they will not be liable to pay royalties in respect of those rights (new subsection 205P(2)). Retransmissions provided by other persons under subsection 205P(1) will be subject to the provisions of the Copyright Act.

Persons providing retransmissions mentioned in subsection 205P(1) will be protected from suit, other than under the BSA or the Copyright Act, in relation to the content of the services broadcast (new subsection 205P(3)). The technology used to make the retransmissions may be subject to authorisation under the Radiocommunications Act or the Telecommunications Act, whichever is relevant, consistent with the technological neutrality of the BSA.

Subdivision B - Injunctions

Subdivision B of Division 2 of new Part 14B of the BSA enables the Federal Court to grant injunctions in relation to contraventions or proposed contraventions of the out-of-licence-area rule contained in new section 205P.

New section 205Q Injunctions

A person contravenes the out-of-licence-area rule if that person provides a service that does no more than retransmit, outside the licence area of a commercial broadcasting licence or a community broadcasting licence, programs that are transmitted by the commercial broadcasting licensee or the community broadcasting licensee concerned, and the retransmission is not in accordance with permission in writing given by the ABA (new subsection 205Q(1)).

If a person has engaged, is engaging or is proposing to engage in any conduct in contravention of the out-of-licence-area rule, the ABA will be able to apply to the Federal Court for an injunction to restrain the person from engaging in the conduct. If, in the Federal Court’s opinion, it is desirable to do so, the Court will also be able to require the person to do something (new subsection 205Q(2)).

New section 205R Interim injunctions

Provision is also made for the Federal Court to grant interim injunctions before the Court considers an application for an injunction (new subsection 205R(1)).

The Federal Court will not be able to require an applicant for an injunction under section 205Q, as a condition of granting an interim injunction, to give any undertakings as to damages (new subsection 205R(2)).

New section 205S Discharge etc. of injunctions

The Federal Court will be able to discharge or vary an injunction granted under Subdivision B of Division 2 of Part 14B of the BSA (new section 205S).

New section 205T Certain limits on granting injunctions not to apply

The power of the Federal Court to grant an injunction restraining a person from engaging in conduct of a particular kind will be able to be exercised whether or not:

• it appears to the court that the person intends to engage again, or continue to engage, in conduct of that kind;

• the person has previously engaged in conduct of that kind; and

• there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind (new section 205T).

New section 205U Other powers of the court unaffected

The powers conferred on the Federal Court under Subdivision B of Division 2 of new Part 14B will not limit any other powers of the Court, whether conferred by this Bill or otherwise (new section 205U).

Division 3 - National broadcasting services

New section 205V Retransmission of programs transmitted by a national broadcasting service

This section sets out the retransmissions of national broadcasting services (provided by the ABC and the SBS) that are exempt from the regulatory regime established by the BSA and certain other laws.

The regulatory regime established by the BSA does not apply to a service that does no more than retransmit programs that are transmitted by a national broadcasting service if:

a) the retransmission is provided by:

• a self-help provider; or

• a subscription television broadcasting licensee or a related body corporate, with the agreement of the national broadcaster concerned (new subsection 205V(1)); or

b) the retransmission occurs within a declared remote area (new subsection 205V(2)).

Retransmissions provided by a self-help provider under subsection 205V(1) will be immune from the Copyright Act - self-help providers will not be required to seek the permission of the owner of the copyright in the broadcast or the owner of the underlying material in the broadcast, and they will not be liable to pay royalties in respect of those rights (new subsection 205V(3)). Retransmissions provided by other persons under subsection 205V(1) will be subject to the provisions of the Copyright Act.

Persons providing retransmissions mentioned in subsection 205V(1) will be protected from suit, other than under the BSA or the Copyright Act, in relation to the content of the services broadcast (new subsection 205V(4)). The technology used to make the retransmission may be subject to authorisation under the Radiocommunications Act or the Telecommunications Act, whichever is relevant, consistent with the technological neutrality of the BSA.

Division 4 - Special provisions relating to metropolitan/regional overlap areas

New section 205W Mandatory retransmission of programs televised by certain regional commercial television broadcasting licensees

This section imposes a requirement on a subscription television broadcasting licensee or related body corporate who chooses to retransmit a metropolitan commercial television broadcasting service in a metropolitan/regional overlap area, to also retransmit the related regional commercial television broadcasting service in that area, or, if there is no related regional service, to also retransmit the unrelated regional commercial television broadcasting services in that area. These obligations are subject to the consent of the regional commercial television broadcasting licensee or licensees concerned.
If:

a) a subscription television broadcasting licensee or a related body corporate retransmits, within a metropolitan/regional overlap area, a metropolitan commercial television broadcasting service; and

b) the related regional commercial television broadcasting licensee consents to the subscription television broadcasting licensee/related body corporate retransmitting the service that is provided by the related regional commercial television broadcasting licensee;

the subscription television broadcasting licensee/related body corporate must retransmit within that overlap area, all the television programs that are transmitted by the related regional television broadcasting licensee (subsection 205W(1)).

The term “related regional commercial television broadcasting licensee” is defined in new section 205M (see explanatory notes above).

New subsection 205W(2) addresses the situation where there is no related regional commercial television broadcasting licensee.

If:

a) a subscription television broadcasting licensee or a related body corporate retransmits, within a metropolitan/regional overlap area, a metropolitan commercial television broadcasting service; and

b) there is no related regional commercial television broadcasting licensee whose licence area includes that overlap area;

the subscription television broadcasting licensee/related body corporate must retransmit within that overlap area, all the television programs that are transmitted by each unrelated regional television broadcasting licensee who consents to the retransmission (subsection 205W(2)).

New section 205X Terms and conditions of compliance with obligations

New subsection 205X(1) requires a subscription television broadcasting licensee or a related body corporate to comply with subsection 205W(1) on such terms and conditions as are:

• agreed between the subscription television broadcasting licensee or the related body corporate, as the case may be, and the related regional commercial television broadcasting licensee; or

• failing agreement, determined by an arbitrator appointed by the parties.

New subsection 205X(2) will require a subscription television broadcasting licensee or a related body corporate to comply with subsection 205W(2) in relation to each unrelated regional licensee on such terms and conditions as are:

• agreed between the subscription television broadcasting licensee or the related body corporate, as the case may be, and the unrelated regional commercial television broadcasting licensee; or

• failing agreement, determined by an arbitrator appointed by the parties.

It is possible that a pay TV licensee or related body corporate could seek to avoid or undermine the regional preference rule by insisting on terms to which a regional licensee would never agree. It is therefore proposed that the Bill provide for an arbitration mechanism to resolve any deadlock.

In the event the parties fail to agree on the appointment of an arbitrator, the Minister must, by writing, appoint an arbitrator (subsections 205X(1) and (2)).

Subsection 205X(3) allows the regulations to make provision for the conduct of an arbitration under this section, if this becomes necessary.

New section 205Y Arbitration - acquisition of property

This provision applies to the provisions in new section 205X that authorise the conduct of an arbitration. The provisions would have no effect to the extent, if any, to which they purport to authorise an acquisition of property that is not on just terms and would be invalid because of paragraph 51(xxxi) of the Constitution.

New section 205Z Action to enforce this Division

The provisions in new sections 205Z and 205ZA (see explanatory notes below) of new Part 14B of the BSA enable the Federal Court to grant relief in relation to contraventions or proposed contraventions of the rules contained in new section 205W, which requires subscription television broadcasting licensees and related bodies corporate to retransmit certain programs in metropolitan/regional overlap areas.

If a person has engaged, is engaging or is proposing to engage in any conduct in contravention of section 205W in relation to a particular metropolitan/regional overlap area, a regional commercial television broadcasting licensee whose licence area includes that overlap area will be able to apply to the Federal Court for an injunction, and damages or an account of profits (subsections 205Z(1) and (2)).

New section 205ZA Federal Court powers relating to injunctions

The Federal Court will be able to grant interim injunctions before the Court considers an application for an injunction under section 205Z (new subsection 205ZA(1)).
The Federal Court will be able to discharge or vary an injunction granted under the provisions in Division 4 of new Part 14B of the BSA (new subsection 205ZA(2)).

The power of the Federal Court under Division 4 to grant an injunction requiring a person to do an act or thing may be exercised whether or not:

• it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail again, to do that act or thing;

• the person has previously refused or failed to do that act or thing; and

• there is an imminent danger of substantial damage to any person if the first-mentioned person refuses or fails to do that act or thing (new subsection 205ZA(3)).

The powers conferred on the Federal Court under Division 4 of new Part 14B will not limit any other powers of the Court, whether conferred by this Bill or otherwise (new subsection 205ZA(4)).

Item 3 Section 212

This item repeals existing section 212 of the BSA. The repeal of existing section 212 is consequential on the insertion of new Part 14B, which establishes a new regime for the retransmission of radio and television programs (see explanatory notes to item 2 above).

Item 4 Paragraph 7(2)(d) of Schedule 2

This item amends the licence condition applicable to commercial television broadcasting licensees contained in paragraph 7(2)(d) of Schedule 2 to the BSA, which deals with the provision by a commercial television broadcasting licensee of its commercial television broadcasting services outside the licence area.

Paragraph 7(2)(d) of Schedule 2 currently provides that a licensee will not provide commercial television broadcasting services under the licence outside the licence area of the licence unless the provision of those services occurs accidentally or as a necessary result of the provision of commercial television broadcasting services within the licence area.

This item extends the exceptions to this condition so that, in addition, a commercial television broadcasting licensee can provide commercial television broadcasting services under the licence outside the licence area of the licence if the licensee satisfies the ABA that the provision of those services outside that licence area occurs in exceptional circumstances and the ABA has given permission in writing.

It is considered necessary to allow the provision of a commercial television broadcasting service by the licensee outside the licence area of the licence in wider circumstances than is currently allowed by the condition in paragraph 7(2)(d) of Schedule 2, but only where the licensee satisfies the ABA that it occurs in exceptional circumstances and the ABA gives its permission in writing.

One such example of exceptional circumstances might be where an earthquake or some other natural disaster has caused a large number of transmitters and associated infrastructure of a commercial television broadcasting licensee to be destroyed or rendered inoperative for a significant period of time. In this situation, it may be justified to allow a second commercial television broadcasting licensee, whose licence area borders the licence area of the first-mentioned licensee, to provide its service outside the licence area of its licence for a temporary period until normal services are restored.

Item 5 Paragraph 8(2)(c) of Schedule 2

This item amends the licence condition applicable to commercial radio broadcasting licensees contained in paragraph 8(2)(c) of Schedule 2 to the BSA, which deals with the provision by a commercial radio broadcasting licensee of its commercial radio broadcasting services outside the licence area.

Paragraph 8(2)(c) of Schedule 2 currently provides that a licensee will not provide commercial radio broadcasting services under the licence outside the licence area of the licence unless the provision of those services occurs accidentally or as a necessary result of the provision of commercial radio broadcasting services within the licence area.

The amendment made by this item mirrors the amendment made in item 4, and is made for the same reasons.

Item 6 Paragraph 9(2)(d) of Schedule 2

This item amends the licence condition applicable to community radio and television broadcasting licensees contained in paragraph 9(2)(d) of Schedule 2 to the BSA, which deals with the provision by a community broadcasting licensee of its community broadcasting services outside the licence area.

The amendment made by this item mirrors those made in items 4 and 5 above, and is made for the same reasons.

Item 7 Transitional - permission given under section 212 of the Broadcasting Services Act 1992

Under existing paragraph 212(1)(b)(ii) of the BSA, the ABA may give permission to a person to provide retransmissions of a commercial broadcasting service or a community broadcasting service outside the licence area of the particular service. Where the ABA gives permission, such retransmissions are exempt from the regulatory regime established by the BSA (where the retransmission is provided by a non-licensee).

There are a small number of permissions given by the ABA under paragraph 212(1)(b)(ii) that are still in force. While section 212 is to be repealed by item 3, it is not intended that the amendments in this Schedule disrupt the provision of retransmissions currently being provided under paragraph 212(1)(b)(ii).

This item is a transitional provision which will result in any permission given under section 212 that is still in force having effect after the commencement of this item as if it had been given under the corresponding new provision, new subsection 205P(1) of the BSA.

Item 8 Transitional - re-transmissions covered by section 212 of the Broadcasting Services Act 1992

Existing section 212 of the BSA provides, subject to subsection (2), that the regulatory regime established by that Act does not apply to a service that does no more than retransmit programs as mentioned in subsection 212(1). Subsection 212(2) also provides immunity from certain other laws in respect of those retransmissions to persons who are not licensees.

While section 212 is to be repealed by item 3, it is not intended that the amendments in this Schedule remove the immunities conferred by section 212 in respect of retransmissions that occur before the commencement of this Schedule.

This item is a transitional provision which will result in section 212 continuing to apply after the commencement of this Schedule in relation to retransmissions under section 212 that occur before the commencement of this Schedule as if section 212 had not been repealed.

National Transmission Network Sale Act 1998

Item 9 Section 3 (definition of exempt retransmission)

The National Transmission Network Sale Bill 1997 is presently before the Parliament. It facilitates the sale of the national transmission network and sets in place a regulatory framework for the provision of national broadcasting and other transmission services after the sale.

Part 3 of the Sale Bill applies an access regime to transmission and other services in favour of certain customers, including self-help groups, who are given access rights in respect of “exempt retransmissions”. Clause 3 of that Bill defines “exempt retransmissions” as “a retransmission covered by section 212 of the Broadcasting Services Act”.

This item makes amendments to this definition in clause 3 of the Sale Bill, consequential on the repeal of section 212 by item 3 of this Bill and on the replacement of section 212 with new Part 14B.

This item would replace the reference to section 212 in the definition of “exempt retransmission” with a reference to paragraphs 205N(1)(a), subsection 205N(2) or 205P(1), paragraph 205V(1)(a) or subsection 205V(2).

It is not intended that paragraphs 205N(1)(b) or 205V(1)(b) in Part 14B be included as these paragraphs relate to retransmissions by subscription television broadcasting licensees or their related bodies corporate, who are not self-help groups and are not intended to benefit from the access regime provided for in the Sale Bill.

Telecommunications Act 1997

Item 10 Subsections 48(3) and (4)

This item makes amendments to the Telecommunications Act consequential on the repeal of section 212 of the BSA and its replacement with new Part 14B.

These amendments would allow subsections 48(3) and (4) of the Telecommunications Act to continue to exempt certain persons retransmitting under the BSA from the prohibition in section 42 of the Telecommunications Act relating to the use of network units.

Section 42 of the Telecommunications Act establishes a basic prohibition on the use of network units to supply carriage services to the public unless the owner(s) is a licensed carrier or there is a nominated carrier declaration.

Section 48 enables broadcasters to continue to use network units for certain purposes without becoming subject to the primary prohibition in section 42. Subsections 48(3) and (4) of the Telecommunications Act provide that if a line link is used for the sole or principal purpose of re-transmission of a kind mentioned in section 212 of the BSA, then, subject to certain limitations, the prohibition in section 42 does not apply.

This item repeals the references in section 48 to section 212 of the BSA and replaces them with references to paragraphs 205N(1)(a), subsection 205N(2) or 205P(1), paragraph 205V(1)(a) or subsection 205V(2) of new Part 14B of the BSA.

Item 11 Subsection 93(2)

This item makes amendments to the Telecommunications Act consequential on the repeal of section 212 of the BSA and its replacement with new Part 14B.

These amendments would allow subsection 93(2) of the Telecommunications Act to continue to exempt certain persons retransmitting under the BSA from the regulatory regime applicable to carriage service providers in the Telecommunications Act.

Section 87 of the Telecommunications Act defines a carriage service provider for the purposes of the regulatory regime established by that Act. Subsection 93(1) of that Act exempts carriage services from the carriage service provider definitions if the sole or principal use of the carriage service is to carry communications between broadcasting studios, or between a broadcasting studio and a transmitter, or between a broadcasting studio and the head end of a cable transmission system, for purposes associated with the provision of a broadcasting service.

This exemption also applies to retransmissions under section 212 of the BSA, by virtue of subsection 93(2) of the Telecommunications Act.

This item repeals the references in section 93 to section 212 of the BSA and replaces them with references to paragraphs 205N(1)(a), subsection 205N(2) or 205P(1), paragraph 205V(1)(a) or subsection 205V(2) in new Part 14B of the BSA.

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