Ministers for the Department of Communications and the Arts

Senator the Hon Mitch Fifield

Minister for Communications

Minister for the Arts

Manager of Government Business in the Senate

RN Breakfast with Fran Kelly—ABC Radio National

8 August 2017

8.05am

Subjects: media reform, NBN

E & OE

Fran Kelly:
Mitch Fifield is the Communications Minister, he joins us from our Parliament House studios. It's a busy place this morning. Minister, welcome to breakfast.

Fifield:
Good morning, Fran.

Kelly:
It's crunch time for you and this media bill. You're in talks with Pauline Hanson, the Greens, and Nick Xenophon. How close are you to a deal to pass the media reforms?

Fifield:
Well, I'm having very good discussions with those three parties. They've shown a real willingness to engage constructively. And that's been our experience with the Senate crossbench in this Parliament. That they've been willing to entertain good propositions and we've had good success in getting their support for a number of those. I always have a policy of not commenting on the specifics of those negotiations. But they're ongoing. I guess the great disappointment for me in this is that the Labor Party have completely absented themselves. They voted against the entire package in the House of Representatives. They have no interest in ensuring that we have strong Australian media voices.

Kelly:
Labor is opposed to the two-out-of-three ownership rule. Many people have concerns with that. That's the rule that prevents one entity from owning a TV station, a radio network, and a newspaper in the same market. Crossbenchers have been worried about it too until now, worried about a lack of diversity. What concessions can you signal, or have you made, or could be offered to get them across the line on this and reassure them about this lack of diversity they're concerned about?

Fifield:
I think the first point is that the greatest threat to media diversity in Australia would be the failure of an Australian media organisation which is why this package is all about giving them more options. Getting rid the 75% audience reach rule and the two-out-of-three rule is about giving more options to media organisations as to how they configure themselves to support their viability. But we will still have important diversity protections. We're not going to get rid of the two-to-a-market-rule, the one-to-a-market-rule or something called the 5-4 of voices rule which says that you've got to have five independent media voices in metro areas and four independent voices in rural areas. And that is…

Kelly:
Is the fate of Channel Ten one of your trump cards here when you're talking to the crossbench because the two-out-of-three rule would clear the way for Channel Ten's major shareholders Lachlan Murdoch and Bruce Gordon to take over the network. Murdoch and Gordon have already taken their proposed bid to the ACCC for clearance. Though some media analysts say that they should be investigated by ACMA about whether they effectively force the board into administration.

Fifield:
I don't comment on regulatory matters. But Channel 10 have been at the forefront of arguing for the abolition of the two-out-of-three and the abolition of reach. And the reason being that they want to have the option of more dance partners. We can't pretend that the media landscape is the same as it was when these media laws were designed. They were designed in an era before the internet existed. Australian media organisations - print, radio, TV - are facing unprecedented competition from online platforms. What we want to do is provide a shot in the arm for Australian media organisations. And I'm very pleased that the Senate crossbench recognises that this is a real issue and that they're prepared to work constructively with the Government.

Kelly:
Just on that, I mean social media giants Facebook and Google hoover up around $3 billion in advertising revenue by as Nick Xenophon puts it “cannibalising the content of Australian media organisations” and he wants a review of the way in which Facebook and Google distribute original content produced by third parties. And into the effect they're having on genuine news publishers. Is this a good idea, would that be timely, a review into this?

Fifield:
There's no doubt that these platforms are providing huge competition. These aggregators of media and there are a range of…

Kelly:
Well, in fact, it's almost not competitive, they're so huge now, that's the point being made by Nick Xenophon, the Greens, and others.

Fifield:
And there a number of propositions that are raised when we're talking about this. Some people raise issues of copyright law. Some people raise issues of taxation. Others will look at this from the point of view of competition policy. So, these are areas where some of my crossbench colleagues are keen to talk. And I'm willing to do that.

Kelly:
So you could consider a review?

Fifield:
Well, we're having propositions put to us by crossbench colleagues. And I always consider the propositions that they put forward.

Kelly:
Nick Xenophon's also proposing a 40% tax break for smaller publishers to encourage them to employ more journalists. The argument is quality journalism is being squeezed out by the new media landscape. Would it be in everyone's interest to encourage employers to expand rather than shrink their newsrooms? Is there a role for Government or tax policy in this?

Fifield:
We want to see strong media organisations. And part of that is strong newsrooms continuing to employ journalists. That's part of the basis of our media reform package, that you've got media organisations that are more viable, that can configure themselves in ways that support their viability. In the case of free-to-air broadcasters we're looking to get rid of those licence fees that they pay and put a more modest spectrum charge in place. This is all about helping their viability, making sure that they're in a better position to conduct their business. And part of that is employing journalists to continue to hold us all to account.

Kelly:
Would the Government consider something like a tax break for smaller publishers if they're hiring more journalists?

Fifield:
Well as I say, I'm not in the business of providing a commentary on discussions that I'm having with the crossbench. But Nick Xenophon has been public about some of the things that he's putting to us.

Kelly:
Let me try one more. One Nation is apparently pushing for funding cuts to the ABC and SBS with the money to be used to better service remote and regional radio services. Are you inclined to agree to a spending review of the public broadcasters in return for One Nation votes?

Fifield:
We haven't entered any agreements with any parties. We did lay out in the Budget before last the ABC's triennial funding. That wasn't altered in the last Budget. That's the fact. But I think it's important to acknowledge the work that Michelle Guthrie has done within the ABC where she's created a new content fund and part of the purpose of that is to employ more regional journalists. And I think that's great.

Kelly:
You're listening to RM Breakfast. Our guest is the federal Communications Minister Mitch Fifield. Minister, can I turn to the ongoing debate and fury, really, around the National Broadband Network. Last week you asked ACMA to try to get to the bottom of the speed issues and the dropouts that customers are complaining about long and loud at the moment. Once that research is done, what happens then? Who's going to step in to resolve these issues?

Fifield:
There's no one solution to the range of issues that have been raised about the NBN. What we've asked ACMA to do is to get more information from the retailers and more information from consumers about what the experiences have been in terms of connections, what the experiences have been in terms of fault resolution. We want to have maximum transparency. When you've got maximum transparency that means it's easier to see where responsibility lies. When NBN needs to lift its game and when retail service providers need to lift their game.

Kelly:
Some people think it's very clear where the responsibility arrives because a lot of the trouble seems to stem from the fact that the retailers, according to the NBN aren't buying enough bandwidth to service their customers and keep them happy. Retailers say that's because the fees are too high. And the fees are high. The connectivity virtual circuit, the CVC fees are high by international standards and they're high because the NBN has to pay back the Government its $49 billion investment in the network. So, that would suggest the Government's to blame?

Fifield:
Well, I think when you look at the finances of the NBN the internal rate of return that the NBN is aiming for between 3.2% and 3.7% is a very modest return. It's about 1% above the long-term inflation rate. And, we definitely want NBN to be in a position where it can cover its costs. We definitely want NBN to be in a position where in the medium to long term, they've got the capacity to pursue upgrade paths. Because technology doesn't stand still. You've got to always be prepared to make provision for that. But Fran, we also need to take a step back and recognise that there will always be debate between wholesalers and retailers. There have never been retailers who've said that the price charged by a wholesaler is perfect or…

Kelly:
No, that's true but it's pretty easy to see that our costs for data are higher than international costs and the reason is because of the CVC charge. I mean, if the NBN can't cover its costs and the end result of that is that consumers without the consumers paying a lot more money for the speeds they have been getting, let along faster speeds. Would the Government consider dropping or changing the requirement for the NBN to make a commercial return?

Fifield:
Well, Fran, we should recognise that what's known as the CVC charge which is what's in discussion, isn't set in stone. It started off at about $20. It's come down to $14. NBN have revised it a number of times with a new retail discount model that NBN introduced in the middle of the year, that CVC charge can be as low as $8. That charge is not set in stone. NBN have it under constant review. They're reviewing it at the moment. So, this is something that'll work through.

Kelly:
Mitch Fifield, thank you very much for joining us.

Fifield:
Good to be with you, Fran.

[ends]

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