Host: (Sandy McCutcheon) G'day Australia, this is Australia Talks Back, so welcome to the program. Nice to have you with us, wherever you're listening, around the world through Radio Australia, or around the country with Radio National. First there was radio, then black and white television, then colour and then the Internet and now we're on the verge of wrapping them all up together. the digital age is upon us with the promise that through your television set you can have access to an incredible number of channels and services.

Digital broadcasting also brings with it the potential to dramatically improve the quality of your television picture to cinema standard and television sound up to CD standard. All the major players, of course, in the current media market are eager to have a slice of the action, and are sensitive to any one of their number having an advantage in the race to go digital. Just as satellite television lost out to cable, there are going to be winners and losers in any major technological shift. Well, the Federal Government has come under intense lobbying from media groups in making the decision about how and when to go digital.

The decision, announced yesterday, will give the current free to air networks free use of the spectrum for the next ten years. In addition, they'll also be able to datacast - the jargon for the kind of information services now available on the Internet. So today on Australia Talks Back we'll be talking about the potential of digital broadcasting, its impact on the media as we know it, and what's in it for you - the viewer and listener. The number to ring, right around the country 1800 802 341. ...

We'll start off with the Federal Communications Minister, Senator Richard Alston:, and Senator Alston:, welcome to the program.

Alston: Thank you, Sandy.

Host: Given the Government's belief in the benefits of competition, why was the decision taken to give the free to air networks the free use of the digital spectrum, while at the same time quarantine them from any competition for a decade. It sounds more than a generous offer.

Alston: Well, it's essentially it's the approach that's been taken in the US, where there's a recognition that the free to airs will need to spend probably upwards of $500 million for conversion to digital, both in terms of cameras, editing suites and post-production facilities and also transmission costs at a time when it will be splitting advertising revenue and there's no real prospect of there being any increase in audience numbers - it's really just dividing it between analog and digital - and you've got at the same time the younger demographics spending more time on the Internet and less time watching television. So, for all those reasons, and the fact that they really don't have much choice but to simulcast for a period of time, then clearly it's not a very sensible move to impose additional cost burdens which can only constrain the service that they would provide.

Host: Senator, one of the advantages of digital is obviously it's a good idea to deliver so many more channels. So why give them the spectrum but prevent them from multichannelling?

Alston: Well, you've got to recognise the nature of the industry in this country. We've always had a limit on the number of free to air players, and I don't think it's any coincidence that we've got pretty much the best quality free to air television in the world, we've got fairly high standards in terms of local content requirements, they have to have 55 per cent local content on transmission. At the same time, we've got a fledgling pay-TV industry which is really just getting off the ground, they probably have about 700,000 subscribers, and that industry would be pretty much devastated if it were suddenly confronted by, not just five free to air networks, but 25 which would be the potential capacity if you allowed full multichannelling. So we took the view that in order to ensure that we didn't simply have a pay-TV industry going out backwards despite it having spent quite considerable sums of money, that there was a balance to be struck here, and on that basis I suppose you could regard it as some sort of offset to the fact that the free to airs aren't being required to pay for the spectrum, although of course they continue to pay licence costs which would capture any increase in market share. They are also prevented from subscription television as well as multichannelling.

Host: Why has the Government adopted a different strategy on data broadcasting, as I understand it you're auctioning the spectrum and then in the next decade free to air networks can broadcast data but the pay-TV operators can't broadcast High Definition Television?

Alston: No, there's nothing to stop the pay-TV operators broadcasting in High Definition Television, that's a choice for them. It's going to be a digital world all round, that's really why we want to ensure that as many people as possible can get into it. As far as being, the pay television networks needing to provide a range of services, well, that will be a matter of choice on their part.

Host: Given the convergence of technologies, will you be reviewing cross media ownership laws, as all media providers seek to provide a full range of services? One of the examples that was given by the Australian Consumers' Association was that if ninemsn goes to Web Television, Microsoft might need to be stopped by foreign ownership rules and that the service is mainly text and Nine might be caught in cross media rules.

Alston: Well, the important thing to remember is that there will be an abundance of spectrum to cater for any number of players in terms of datacasting. The free to airs will be able to use their spectrum to the extent their not immediately using for High Definition, but there'll also be even more spectrum available for a raft of other players, whether it be Fairfax or anyone else, News Ltd for example. Now, when you've got no problems with a concentration such as that it doesn't really make sense to be imposing foreign ownership or other cross media rules on the system. You impose them in the area of conventional broadcasting because you do have a very finite number of print outlets, radio and indeed television, and because there's such a scarcity of proprietors then the rule has always been that you ought to restrict their ability to effectively cannibalise each other.

Host: Senator, just one final question on the ABC. The ABC has asked for an injection of funds to digitise. Are you a): happy with the costings and plans that have been submitted to you; and when will the funding decision be taken and what will it depend on?

Alston: Well, I think the first thing to say is that we very much want the ABC and SBS to have a place in the sun. I've already had some pretty useful discussions with Brian Johns (ABC Managing Director), there's more work to be done. They, I think, needed to see the blueprint that we announced the other day before we could complete their costings. They're still in the process of property rationalisations which will determine the amount that they can contribute to the digitisation costs and we'll be addressing those matters as soon as we can. Bear in mind that Mansfield said it wasn't critically necessary to do that until 1999 but I certainly think that the way the discussions are proceeding we should be able to do something well before then.

Host: Are you happy with the pace of outsourcing?

Alston: Well, my view has always been that Mansfield's pretty much right. He recommended that they should move to 50 per cent of outsourcing of non-news and current affairs over a three year period. The ABC regards coproductions as outsourcing and I don't think that's strictly accurate. It prefers the notion of contestability, which also I don't think really ultimately translates into a significant level of outsourcing. So, I think there's still a fair way to go in that regard and clearly they would need to, I think, be conscious of the fact that the more outsourcing you do, while retaining full editorial control, the greater capacity you have to be able to reduce the cost of in-house digitisation.

Host: Senator, thanks very much for your time, it's been good speaking to you. Senator Richard Alston, the Federal Communications Minister.


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