Labor Reports on Telstra/ABC Deal

Date: 13 April 2000

Shadow Minister for Communications, Stephen Smith, today welcomed the tabling of Labor Senators' interim report on the ABC / Telstra online content proposal.

On Thursday 17th February 2000, the Senate referred the following matters to the Senate Environment, Communications, Information Technology and the Arts References Committee:

i. Any existing commercial arrangements for the production, supply or
distribution of Australian Broadcasting Corporation material online, including, but not limited to, mechanisms for ensuring Australian Broadcasting Corporation editorial control and independence;

ii. Any proposed commercial arrangements for the production, supply or distribution of Australian Broadcasting Corporation material online, including, but not limited to, mechanisms for ensuring Australian Broadcasting Corporation editorial control and independence;

iii. Any additions required by way of amendment to the Australian Broadcasting Corporation Act 1983 and the Australian Broadcasting Corporation's Charter to ensure the scope and effectiveness of the operation of the Act and the Charter in the new online delivery environment.

"The Senate Committee has provided an interim report today, dealing with the first two terms of reference, and will produce a final report on the third term of reference by October 30th," Mr Smith said

"The inquiry arose out of public concern over the details of a proposed content deal between the ABC and Telstra, and a perception that this could have an adverse impact on the independence of the ABC," Mr Smith said.

"Concerns raised included:

· A lack of adequate Commonwealth funding to the ABC, forcing it to seek such commercial arrangements;

· The potential impact on the ABC's independence and corporate integrity of increased commercialisation;

· Concerns about specific details of the terms sheet being negotiated between the ABC and Telstra; and,

· A perceived lack of public scrutiny about these matters, and the ABC's role in the growing online environment.

"In the light of such concerns, Labor considered detailed Parliamentary scrutiny of the proposed arrangement as being both necessary and desirable. As a consequence, we moved to establish the inquiry, and I welcome the tabling of the interim report today," Mr Smith said.

"As well, the Committee will now examine whether any additions are required by way of amendment to the Australian Broadcasting Corporation Act to ensure the Act and the Australian Broadcasting Corporation's Charter have the necessary scope and effectiveness of operation in the rapidly growing online environment.

"Parliamentary scrutiny has been beneficial to the ABC, both in providing an opportunity for the community to raise concerns, and for the ABC to advance views on the role of the public broadcaster in the online world.

"While Labor believes that ultimately decisions about this issue are a matter for the ABC Board, Labor Senators believe the Board should approach its decisions with due regard to the concerns raised during the Committee process," Mr Smith said.

EXECUTIVE SUMMARY - LABOR SENATORS' INTERIM REPORT

· The proposed arrangement between Telstra and the ABC has given rise to public concerns at the potential detrimental impact on the ABC and its future independence and integrity.

· Concerns raised in evidence to the Committee include:
· reliance on funds from commercial arrangements;
· self-censorship or undue or inappropriate regard for the views of contractual partners;
· concerns about advertising;
· compromise of the ABC's competitive advantage and result in a failure to realise the potential of ABC online;
· concerns about the privacy of consumers;
· the overall breadth of the agreement which covers topics incidental to the licensing of ABC Online content.

· There are significant differences between the proposed ABC/Telstra arrangement and those arrangements already in place with other corporations.

· It is self evident that the ABC has been forced to pursue alternative sources of revenue as a result of this Government's funding cuts, contrary to the Coalition's 1996 election commitment to maintain existing levels of Commonwealth funding.

· It is ultimately a matter for the ABC Board to determine, within the framework of its Charter and the legislative and regulatory framework, whether and on what terms the ABC will agree to deal with Telstra. Labor Senators believe that the Board should approach its decision with due regard to the concerns that have been raised.

· Concerns relating to the inadequacy of existing editorial controls and consequent concerns about the ABC's independence have been raised with the Committee. Support for the sale by the MEAA and Friends of the ABC was contingent on assurances that the ABC will maintain editorial independence. The ABC must ensure its editorial independence is maintained in the context of commercial arrangements.

· Labor Senators remain concerned at some of the provisions in the term sheet developed between the ABC and Telstra that relate to matters that are at best incidental to the core content arrangements proposed by the terms under negotiation. These concerns include:
· digital spectrum rights: Labor Senators recommend that this provision be omitted from any final agreement with Telstra as it is purely incidental to proposed content arrangements and deals with an area of public policy administration of substantial public interest.

· contract compliance monitoring: there is an apparent lack of clear and specific ongoing contract compliance monitoring practices or guidelines as evidenced by the recent contract breaches by Redrock and Equitycafe. Labor Senators recommend the introduction of clearly articulated, rigorous, ongoing compliance monitoring practices.

· Telstra ongoing right to consult: Labor Senators believe that this provision suggests that Telstra will have the capacity to influence ABC decisions about content mix and variety for a commercial purpose. It may be more reasonable to renegotiate contractual arrangements in their entirety if amendments are proposed, to avoid the perception of undue influence on ABC editorial decisions.

· advertising revenue: the term sheet being negotiated contains provisions for the ABC to share advertising revenue generated by Telstra's website. Labor Senators consider that given that this is contrary to current ABC Board policy, the relevant provisions should be omitted from any arrangement pending detailed consideration of the principles involved, including by the Committee in its final report.

· Telstra "absolute discretion" to present material: Labor Senators are concerned about the granting of absolute discretionary rights in respect of the presentation of ABC content. It may be more appropriate that minimum guidelines for content presentation are developed by the ABC, and incorporated as part of standard third-party content arrangements.

· Labor Senators regard the maintenance of the independence and integrity of the ABC as essential.

· The ABC needs to be transparent in its operations and accountable to the taxpayers who provide its funding. Decisions need to be made in accordance with a principled public policy framework to assure the accountability and transparency of the Corporation's activities.

· The ABC must protect its editorial control and independence in considering a possible arrangement with Telstra. Consideration of the legitimate concerns presented to the Committee in submissions and evidence in public hearings would be essential in the Board's final deliberations on the proposed ABC/Telstra online content arrangement.

For further information

Contact:	Patrick Bindon
Union:	Labor Council of NSW
Phone:	0418 694 878
WWW:	http://workers.labor.net.au/

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