Convergence Review - Meeting the regulatory challenge

14 October 2011

As the traditional distinctions between TV, radio and telecommunications blur and dissolve in a converging world, the regulatory framework governing these sectors is no longer working. Revolutionary change is required. Can the Government’s Convergence Review meet the challenge of figuring out how best to regulate traditional and new media, without stifling innovation and ensuring an even playing field?

State of play - broken concepts

In Australia, communications and media is regulated along industry lines -broadcasting, telecommunications and radio – with separate legislation governing each sector. 

While this industry ‘silo’ framework worked nicely 10 years ago, it falters in a converged environment.  Telcos (traditionally regarded as being “dumb pipes”) now act as content providers through the provision of mobile TV and on-demand movies via their mobile and broadband networks.  And television and radio broadcasters have proliferated the distribution of their content through new  channels, such as on-line and mobile, and by licensing content to telcos and new media entrants.  Consumers demand that service providers, operators and content providers offer converged services and products and the digital technologies to enable it.

Regulation of content according to the method by which it is delivered (television or radio broadcast, phone call or via the internet) also no longer works.  In the words of ACMA Chair, Chris Chapman, the regulatory concepts have become “broken concepts” in a converged environment.  The result being regulatory uncertainty, stifled innovation and a regulatory tension between those services that are regulated and those that are not.

Television is not television anymore

IPTV is a good example of the regulatory challenges posed by convergence. 

The rollout of the National Broadband Network will see IPTV become ubiquitous in Australia and present real competition for free-to-air and pay TV broadcasters.  Despite the regulatory uncertainty, it is generally accepted that an IPTV service (provided it is on-demand on a point-to-point basis) does not need a broadcasting licence.  Even if the service is not on-demand (eg. it is Near-Video-On-Demand or a standard “linear” service), then provided it is distributed via the internet, it is also not classified as a “broadcasting service”.  Thus, it does not need a licence under the Broadcasting Services Act (BSA).  It is only if the IPTV service is provided over a proprietary network and not on-demand, that it would need to be licensed.  In reality, an IPTV service is unlikely to be offered in this way. 

IPTV is essentially television, just delivered over broadband rather than through an antenna or cable.  Thus, the limited regulation that applies to IPTV service providers is in stark contrast to the regulatory burden borne by broadcasters (including content quotas and advertising standards). 

The result? Regulatory uncertainty for new IPTV service providers (a recognised barrier to entry) and an uneven playing field for traditional television broadcasters.

International perspective

Australia is not dealing with the regulatory challenges posed by a converged environment in isolation.  Europe, the US, Canada and NZ have all undertaken similar reviews to the Convergence Review.  Although the Department of Broadband, Communications and the Digital Economy is not convinced that any one jurisdiction has “cracked the nut”,

the approach taken by the EU may provide a useful model for Australia.  The EU Audio-Visual Media Services Directive (implemented into law in the UK in 2009) extends certain television regulation to “television-like” services.  The Directive envisages a co-regulatory approach.  The video-on-demand industry in the UK has long been self-regulated by the Association of Television Video on Demand (ATVOD) and the existing ATVOD Code has been extended to cover the additional regulation required by the Directive.

A co-regulatory approach has many benefits and is consistent with comments made repeatedly by ACMA Chair, Chris Chapman, and the guiding principles for the Convergence Review.  It enables regulation to keep pace with technological developments in the communications industries; a critical feature in a converged environment. 

Convergence regulation – levelling the playing field

Maintaining the status quo of existing regulation, particularly within the television broadcasting industry, has the potential to stifle innovation of new services and exacerbate the regulatory disparity between licensed broadcasters and new entrants, like IPTV service providers. 

One idea being explored is the possibility of turning the existing regulatory “silos” on their head.  The result being that the regulatory focus would be on content type rather than the method of distribution (telecommunications, television broadcast or radio broadcast).  It wouldn’t matter which platform the content is distributed over, it is regulated in the same way (essentially platform and device neutrality, with some tweaks).  This approach would have the benefit of, among other things, applying consistent classification and other community standards to all content. 

However, technologically-neutral regulation creates a number of flow-on effects that may not benefit broadcasters, telcos, or content providers.  Different delivery platforms and devices provide different filtering and parental controls, such as verification of age and identity, that are not available to free-to-air linear broadcasters.  Also, is all content really the same?  It is difficult to argue that content produced by, for example, educational institutions, is the same (and should be regulated in the same way) as user-generated content. 

Developing recommendations for regulatory reform that achieve a satisfactory balance between regulatory certainty and not stifling new entrants and creating a level playing field is a major challenge for the Government and requires engagement with industry and the public. 

For a more detailed discussion of the Convergence Review, please click here.

Submissions in response to the Convergence Review: Emerging Issues Paper are due by 28 October 2011

If you would like assistance in preparing a submission or would like more information about the Convergence Review, please send us an email or contact one of our partners listed on this page.

The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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Eddie Scuderi

Partner. Brisbane
+61 7 3228 9319