Breen: We're talking to the Communications Minister, Richard Alston. Good morning.

Alston: Good morning, Shannon.

Breen: Let's talk about this issue of competition first up. Why have we given Channels Seven, Nine and Ten the digital spectrum for nothing?

Alston: Well, we're not giving it to them. They are able to use it for a period of ten years after which time it's returned to the Government and we're able to sell it off. The reason it's given to them free, as it is in the US and the UK, is that they will face very significant upfront costs, probably in excess of half a billion dollars in Australia, for conversion of cameras, editing suites, post production facilities. It will split their advertising revenue, there'll be even more competition from other technologies, even the Internet where younger people - Triple J listeners presumably - are spending more time surfing than they are watching free to air television.

Now, if there is any increase in actual revenue for the free to airs then that will be captured by the ongoing licence fees which are paid in Australia to the tune of $190 million. In the Us they don't pay that at all. But the critical thing to remember is that there is going to be datacasting which will allow all of the amazing new technology developments to occur and that will be open to all players. There will be spectrum there, not just for the free to airs, but there'll be even more spectrum available for any new entrants, without limitation whether they're foreigners or anyone else.

Breen: But that won't happen for eight years, why...

Alston: No, no, that will happen right now. In other words, datacasting, as soon as this system comes in, we'll be auctioning off spectrum for datacasting, anyone can bid for that, and we'll make sure that that's charged commercially, there's a level playing field between the free to airs and all the other datacasters.

Breen: But, Minister, given that this Government is interested in selling off other national assets, like Telstra, and you're constantly talking about competition - the waterfront is a perfect example of that - why not open up the market, allow anyone to bid for it and just have an open market so that consumers can choose the service that they want?

Alston: Well, I think you're talking specifically about why don't we let new free to air commercial networks come into the game. Now, the answer to that is not really tied up with digital television, although clearly at a time when they're incurring very significant upfront costs it hardly makes sense to expect them to outlay the necessary investment and then face even more competition. But the reason historically we've limited the number of players in this country for more than 40 years now is that we expect them to meet very high local content requirements - in other words, Australia drama, children's television. There are standards there at the moment. The transmission quota is in excess of 55 per cent Australian content, and the trade off for that is that you have a limited number of players, and I don't think it's any coincidence that we probably have the best quality free to air television in the world.

Breen: There seems to be some perception though that this is a big win, particularly for Channel Nine and Kerry Packer. And given that we are, potentially, in an election year, could people be forgiven for thinking that perhaps some sort of deal has been done and in fact we're kind of assuaging the feelings of media moguls?

Alston: Well, I don't think they could be forgiven for it, but I think it's inevitable that you will find people trying to reduce these things to simple personality games. I mean, it's the easiest headline in the world to say "Kerry Wins, Rupert Loses", or "Kerry, Kerry and Izzy Win and Fairfax Loses", I mean it doesn't take a very great deal of journalistic analysis to come up with that sort of nonsense.

Breen: Is there anything that binds the commercial television networks from providing HDTV from the year 2001?

Alston: Yes, there is. They will be required to start up in digital format and then we'll spell out a progressive timetable for them to move to HD. But you've got to remember, Mara's (Mara Bun, Australian Consumers' Association) quite right in saying that there are going a lot more twists and turns in this story over the years, and you can't predict the precise course of new technologies, and therefore not only will we have reviews as we go along, but you need to see how the business case pans out. If this is a huge consumer demand item, as most other new technologies in Australia have been, then you won't have any particular problem. If, on the other hand, it does take quite a while then obviously you don't want to be forcing the companies to have too high a level of HD when it's really a dead duck. Now, having asked for it in order to provide HD, I think it's only reasonable that we set progressively higher minimum levels but you've just got to be sensitive to that fact.

Breen: And what about this concern that HD is going to crowd out other services like the digital music channel or Internet interactive shopping at home?

Alston: Well, if Fox and Sony are in that I can tell you it's for pay-TV purposes, and they can have advertising free pay channels, and you can have that in Australia right now. Pay can go digital as soon as it likes, so you can have an unlimited number of channels. There are no limits on the number of pay-TV operators and there no limits on what they can do.

Breen: Ok, I guess just finally, and we've just got a few...

Alston: Can I just respond to one of the things that Mara said about cost?

Breen: Yeah.

Alston: I'm amazed to hear that Mara's been around for 60 or 70 years, she looks a hell of a lot younger than that...

Breen: No, she's saying that the American consumers' report, the organisations..

Alston: Yeah, I do. She said the organisations. I was only being flippant. Ah, but she did say the cost of the sets are quite high, and I think you dealt with it in part. But certainly what you can expect, I think, always in these areas is that the price starts high but as volume picks up the prices come down. And we're more worried about the shortage of sets than we are about high costs of them.

Breen: Ok, Richard Alston, in 20 seconds, are you going to give the ABC the money to do digital?

Alston: We're talking to the ABC about money, but we've already given a commitment to ensure that they have a place in the sun. They'll be treated roughly on a par with the free to airs, but they may do even better because they'll be allowed to multichannel in non-commercial areas that don't conflict with their Charter.

Breen: Ok, Communications Minister Richard Alston.


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