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CONTROVERSIAL CONVERSATION AT ASTRA CONFERENCE 2010

CONFLICT OF INTEREST & MULTI-BILLION DOLLAR REBATE
Kim Williams claims the ABC is taking sides against pay TV as Chair of the Freeview consortium, and again slams the licence fee rebate – which he calculated could cost not $250 million but $2.5 - $3 billion. Here is what Williams said – with feeling - on the two subjects.


Kim Williams - photo courtesy SMH

ON THE ABC
DAVID SPEERS: The ABC in particular has been driving into new areas; ABC2, ABC3. They are launching a news channel, and ramping up online. Kim, is the ABC a threat?

KIM WILLIAMS: Look, frankly I find the ABC a frustrating conundrum. Here is an organisation which is gifted the best part of a billion dollars annually - just given it. And then it has the temerity to start pontificating about competition. It has the temerity to start telling us about content and content value.

It has the temerity as an organisation that gets all of its dollars given to it, to chair Freeview [association of free to air broadcasters], which for me is an irreconcilable and impossible conflict of interest. It has the temerity to say that it is provisioning a national news service exclusively on the HD frequency band, which means if every Australian who had an HD television had an HD tuner attached to it, it would reach 37% of Australians.

These things require accountability - not just because it is frustrating to me, but because it requires accountability at law. It requires accountability to the parliament, it requires accountability to the people because there are a range of completely unacceptable contradictions inside that.

The ABC, under its Act, is always very, very strong in invoking the so called charter. The charter actually requires of the ABC that it take account of the broadcasting landscape and that it act in a complimentary sense with that landscape. How that fits with a news channel, which apparently, according to the initial statements by the Managing Director of the ABC, is coming exclusively from savings … [it would be the] first time I have ever seen a television channel launch a 24 hour a day highly expensive news service done on savings. To be charitable, he's probably not that in contact with the finances of the organisation. There'd be strong resource reallocations taking place.

As you know, David, news takes lots of people, energy, resources, lots of time, lots of bandwidth, lots of studios, all manner of things. It's time we started requiring the national broadcaster clarity in what its purpose and role in a multichannel environment is. The ABC should not chair Freeview. It's a commercial player in the business of trying to eat our lunch and stop our growth. The ABC is not a commercial organisation, it's a national broadcaster and it is highly inappropriate that the ABC adopts a partisan stance against subscription television in terms of the ecology of broadcasting in Australia. It's highly inappropriate; in my view, it's wrong.

ON THE TV NETWORKS LICENCE FEE REBATE
DAVID SPEERS: There was a lot of commentary about the Government giving a licence fee worth $250 million to the commercial networks…

KIM WILLIAMS: Around the world terrestrial television does not enjoy the benefit of the largest anti-syphoning list ever conceived in broadcast history. Let's remember, in a non Olympic, non Commonwealth Games year, there are over 1,300 events on the anti-syphoning list. The British list has 11. New Zealand has none. United States has none. Canada has none. Italy has six. France has five or six in one or other of those countries. This is out of proportion. That's part of a whole package.

Around the world, new entrants have entered broadcasting landscapes regularly. In Australia, uniquely, there's a legislative guarantee that no one can compete. In Australia, uniquely, all of this spectrum has been gifted to the existing incumbent players at no charge and with no content obligations, no public benefit test.

So the licence fee is what the licence fee is, because there's a raft of things that are given uniquely in Australia to the operators of those services from which they commercially benefit. The services were sold with the benefit of a huge legislative change in terms of the removal of the Broadcasting Services Act.

A number of companies realised billions in that process, knowing, in a quiet by the acquirers, they were inheriting a licence fee regime. The Government is now saying it's making a grant to help Australian content without contractual condition, and in recognition of the cost of digital conversion, which took place years ago.

What hasn't happened is they haven't used the spectrum as they were entitled to launch the services earlier. There's one other point. It's not 250 million, so far the gift to the terrestrial television system by the Commonwealth is $670 million, and we are still counting.

That depends on what happens at 1 July next year, with the licence fee rebate. I don't think any of us will be surprised if we see the licence fee rebate extended in perpetuity, in which case it's a transfer from the public to the private of around $2.5 $3 billion in net present value.

That is a gigantic financial transaction in anyone's analysis, and is something for which Government and the recipients need to be accountable. I might add, it's given them a bunch of money we didn't have, and we are operating under the same principles and still having to compete.

Published March 25, 2010
 

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Last week’s ASTRA conference (March 18, 2010), bringing together some 450 practitioners in the subscription television business at the Sydney Convention Centre, devoted its primetime-lunchtime session to a conversation with the CEOs of Foxtel, Kim Williams and Austar, John Porter. It was moderated by Sky News Political Editor David Speers.







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