We are seeking views on whether Australia’s national broadcasters (ABC and SBS) are operating in line with competitive neutrality principles.
Australia’s media landscape continues to evolve rapidly in response to shifting global and consumer trends and this has forced changes to how our national broadcasters operate.
It is timely to consider how the ABC and SBS operate within the market and the basis on which they are competing with the private sector.
Competitive neutrality principles provide that government businesses activities should not enjoy net competitive advantages by virtue of their public sector ownership.
The Inquiry will examine whether the ABC and SBS are operating in a manner consistent with these principles.
The Panel will consult relevant stakeholders during the Inquiry and be supported by a Taskforce in our Department.
The Panel have prepared an Issues Paper outlining the consultation process and encouraging participation in the Inquiry. A number of specific questions are included throughout the paper and are available to respond to online.
Responses to the questions in this Issues Paper and submissions to this Inquiry will be made publicly available on the Department’s website. If you would like to make a confidential submission or include information that is commercially sensitive, please clearly indicate this in your response.
The public broadcasters will be asked to justify to a government inquiry why they should continue providing free online news and catch-up TV when they are competing with commercial media players.
Read the earlier links regarding the terms of reference and what competitive neutrality is. Australian media would be much the poorer without The ABC and SBS.
The ABC has been “competing” with commercial broadcasters for decades over identical media.
It’s just that the butthurt newspaper companies (i.e. Murdoch) have sought to blame the ABC for their lack of ability to set up online paywalls to push their own agenda, because they hate the fact that the ABC has stepped into their traditional territory, text-based news, due to technological advances allowing them to do this.
Don’t forget, almost every commercial broadcaster (except Ten) offers online news content for free as well, which has almost certainly affected the paywall plans of legacy newspaper outlets.
Why do they get a free pass to do this while the ABC and SBS are lynched for it?
and if the ABC or SBS weren’t doing online media then they’d be accused of being archaic and redundant. Andrew Bolt would be having a field day berating them for being irrelevant in an era of digital media. So they can’t win.
New Corp and Fairfax etc like to begrudge the ABC and SBS (but mostly ABC) for offering “free” news and media, but in reality we’ve already paid for it through our taxes.
And how much tax has News Corp contributed to society lately? And how many government handouts has News Corp had lately? Something about a $30 million gift to Foxtel for nothing in particular ring a bell?
But I can appreciate the concern that SBS is perhaps over stepping the mark in terms of ignoring its charter and adopting commercial and US-centric programming models such as Food Network and Viceland. Are these ventures appropriate? I think perhaps not even if the profit derived from these channels is used to fund other programming ventures.
I think SBS Television has gone outside it’s purpose and needs to be reigned in. I’m not envisioning any type of government or parliamentary interference in programing, just SBS being told that it is not abiding by its charter and that the board and management needs to ensure that it does. If they can’t, then I would be happy for it to be merged into the ABC.
I think there is a place for a publicly owned broadcaster which uses commercials to support their budget.
Channel 4 in the UK does their job very well and it’s basically identical to SBS but without the multicultural flavour.
What I think should happen is the SBS’s multicultural remit (including NITV) should be absorbed into the ABC, while SBS keeps the more mainstream stuff and its news division (which I would want to see remain unchanged). Strip all government grants from SBS (leaving them to rely entirely on advertising) and allocate them instead to the ABC to make up for the shortfall.
ABC reinforces value to media sector and Australian society
The ABC’s submission to the Federal Government’s inquiry into competitive neutrality has reinforced the value of public broadcasting to both Australian society and the media sector.
The submission rejects any notion that the ABC has an unfair advantage or is crowding out commercial media companies.
ABC Managing Director Michelle Guthrie said public and commercial media had successfully co-existed since the founding of the ABC 86 years ago.
“This mixed media model has contributed enormously to media diversity, a well-informed public and a richer Australian culture,” she said.
“As its submission shows, the ABC is well aware of its privileged position in Australian society. The ABC uses its government funding efficiently and effectively to deliver on its Charter obligations to provide
comprehensive and innovative public broadcasting and digital media services to Australian audiences.
“It rigorously supports the principles of competitive neutrality – that public and commercial sector entities should function on a level-playing field – and applies them appropriately.
"Far from disadvantaging commercial media, the evidence shows the ABC has a positive influence on the broader media sector, including in its focus on innovation and its ability to serve as a launchpad for ideas and fresh talent.”
Ms Guthrie said the transformed media landscape was affecting all media organisations. As people consumed more content online, the ABC had a public responsibility as well as a legislative remit to ensure its taxpayer-funded output was accessible to as many Australians as possible.
“Any move to curtail the ABC’s activities would serve only to punish Australian audiences who trust and value us,” she said.
"The ABC looks forward to engaging further with the Panel and having an opportunity to respond to the concerns raised by other participants in the inquiry.”
The ABC’s submission to the Competitive Neutrality Inquiry and the RBB Economics executive summary are available at abc.net.au/future.
Key points in the ABC submission:
The ABC is driven by the mandate in its Charter, not profit incentives or competition for advertising dollars. The ABC is guided by and operates within its legislative obligations, including the ABC Charter. Unlike commercial content suppliers, the ABC is not guided or driven by profit motivations or advertising dollars.
The ABC strives to create high-quality, innovative and distinctive content. In accordance with its Charter, the guiding principles in the ABC’s strategy are to ensure that its content is of a high quality, innovative and distinctive from that offered by the commercial and community sectors.
The ABC supports the principles of competitive neutrality and applies them in its business activities. The ABC recognises the importance of competitive neutrality and acts in a way that is consistent with the Commonwealth’s Competitive Neutrality Policy in its business activities, including by accepting complaints made about the ABC. There has been one such complaint made previously to the Australian Government Competitive Neutrality Complaints Office, the outcome of which was that the ABC’s pricing of the relevant services was determined to be consistent with competitive neutrality principles.
The ABC appropriately takes into account the interests of the commercial and community sectors in all of its activities. The ABC focuses on providing distinctive content, and actively takes account of services provided by the commercial and community sectors. The ABC’s activities do not crowd out commercial and community content suppliers. To the extent that there is any competitive overlap between the ABC and commercial and community sectors, the ABC enhances competition and innovation, resulting in better outcomes for audiences. The ABC also delivers benefits to the Australian creative community and media sector by investing in that sector and developing capability and talent over time.
The regulatory obligations on the ABC do not provide it with an unfair competitive advantage. The ABC operates under strict regulatory obligations. Although these obligations are different to those of commercial content providers, the ABC does not enjoy any unfair competitive advantage as a result of differential regulatory treatment when the relevant regulations are examined holistically.
News Corp Australia has called on the government to review the charters of the ABC and SBS and to restrict the public broadcasters from unfairly competing with its newspapers, websites and Sky News.
The publisher of the Australian and Daily Telegraph wants the ABC to be barred from promoting its news stories online using Google ads.
News Corp had also asked the government to ban the ABC from selling its content to third parties like outdoor advertising companies and Qantas lounges because the commercial supply of news content was an important revenue stream for Sky News.
An independent panel made up of eminent Australians has found the ABC and SBS are meeting their competitive neutrality obligations, but recommended they be more open about their competitive activities.
Minister for Communications and the Arts Mitch Fifield today released the expert panel’s report on the inquiry into the competitive neutrality of Australia’s national broadcasters.
“The panel recognised all media organisations are operating in an environment of heighted competitive pressure, driven by changes in the way audiences engage and the entry of global companies into the Australian media market,” Minister Fifield said.
The panel found the national broadcasters are applying a ‘best endeavours’ approach to meet competitive neutrality requirements but recommended they improve their transparency, reporting and other processes relating to their competitive activities and Charter performance.
The panel also noted the ABC and SBS Boards should give greater guidance on how they take account of other media market participants.
Minister Fifield said he recognised that the Charters of the national broadcasters are broad and allow flexibility in how they are implemented by the respective Boards.
"It is now up to the national broadcasters to act on these recommendations,” he said.
Earlier this year the Government appointed Robert Kerr (former head of office at the Productivity Commission), Julie Flynn (former CEO of Free TV) and Sandra Levy AO (former Director of ABC TV) to undertake the inquiry and determine whether the national broadcasters are operating in a manner consistent with the general principles of competitive neutrality, as defined by the Commonwealth Competitive Neutrality Policy.
The inquiry received a total of 6,839 submissions from members of the public, commercial media, industry stakeholders and the national broadcasters themselves.
This Inquiry is about whether the National Broadcasters—the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS)—are competing fairly with the private sector. The National Broadcasters have pursued new opportunities in changing media markets and new competitive circumstances have emerged.
Most significant competitive pressures for news, entertainment and advertising are coming from giant international companies. Nonetheless, the National Broadcasters are forces in Australian markets, with their competitive weight enhanced by secure funding at a time of higher commercial risk, supported by relatively high productivity growth.
Competitive neutrality seeks to ensure that competition is not distorted by public entities taking inappropriate advantage of government ownership. It is not intended to prevent public entities from competing, nor to relieve discomfort from competitive processes which are bringing benefits to consumers as they rapidly adopt and enjoy new services.
The Commonwealth’s Competitive Neutrality Policy (CNP) is focussed on government trading corporations and its relevance to the National Broadcasters is more limited. Nevertheless, the National Broadcasters operate under a best endeavours approach to competitive neutrality.
With respect to their business activities (with user-charging), the National Broadcasters are abiding by a best endeavours approach to competitive neutrality. It is unlikely to be front of mind but mostly conforms to good internal business organisation. There is no evidence that costs are not appropriately allocated. And prices are generally set to market rates.
Different regulatory circumstances facing the National Broadcasters, compared to the private sector, represent Parliamentary decisions which are difficult to bring to financial account.
Some improvements in transparency and internal procedures are possible. The separate Treasury review of the CNP may clarify improvements arising from the recommendations of the Harper Review of Competition Policy.
Beyond the application of the competitive neutrality management guidelines to business activities, the question arises as to how competitive neutrality principles about competing fairly without distortion might apply to the free services delivered by the ABC and SBS.
Free ABC and SBS services are having some competitive impact. Submissions included complaints about the ABC’s online news service and SBS’ multi-channel and streaming services. But the National Broadcasters are established and funded to provide free services. So long as they operate within their statutory Charters they are operating in the public interest.
Submissions questioned whether the ABC and SBS were operating within their Charters. The Charters are written very broadly, and reporting against the Charters is not detailed or robust enough to settle doubts. Accountability is difficult, especially as there is no opportunity for Charter complaints to be addressed.
Given their market shares, and other factors, this Inquiry considers the National Broadcasters are not causing significant competitive distortions beyond the public interest.
While the National Broadcasters are not prohibited from competing, some improvements in the way they interact with markets should be contemplated.
Yep, I agree. An government inquiry into how Australia’s commercial media outlets operate would’ve been far more worthwhile, but of course this is unlikely to ever happen.
Obviously there are few people out there who really don’t like the prospect of paying $14.60 of their taxes to the ABC each year, but haven’t recent surveys shown that a decent majority of Australians place quite a lot of value and trust in the ABC?
Presuming that’s the case as I suspect it is, any federal government which attempts to privatise the national broadcaster will likely be met with mass protests in the streets and condemnation by the general public.