Aussie ASTRA fights fee rebates

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Australia’s subscription TV lobby group, ASTRA, has branded the licence fee rebates the government will give to Seven, Nine and Ten “anti-competitive and against the interests of consumers”.

ASTRA (the Australian Subscription Television and Radio Association) has announced itself “surprised and disappointed” with the government’s decision to grant the large licence fee rebates to what it calls the “old commercial TV networks”.

The rebates are worth around A$240 million to the networks over the next two years, representing rebates of 33% in 2010 and 50% in 2011.

Announcing the measure, Communications Minister Stephen Conroy said: “Broadcasters have a unique role in preserving our national culture and the commercial television sector invests hundreds of millions of dollars each year in the production of local content.

“However, they are faced with a converging media environment and switch to digital television, as well as the impact on revenue created by a decline in advertising spend as a result of the Global Financial Crisis.

“New media platforms are bringing a wealth of choice to Australian viewers, but the Government recognises that Australian television broadcasters have an important role in ensuring that Australian stories remain at the centre of our viewing experience.”

But ASTRA’s chief executive Petra Buchanan said: “Taxpayers are yet again being asked to subsidise the businesses of foreign owned broadcasters to help them meet existing content obligations – it’s an outrageous affront to Australians.

“Giving the old TV networks yet more protection just to maintain existing standards is the antithesis of modern media reform. It is couch potato policy that reduces their incentive to invest, compete and innovate, and ignores innovators such as the subscription television sector, which has no trouble meeting its own Australian content obligations year after year without a cent of Government assistance. By using taxpayers’ money to prop up the old players, innovation and competition in the television space will continue to be curbed.”

ASTRA’s statement additionally pointed out what it vcalls “the already very generous terms of access to spectrum”. These are: the networks’ spectrum allocation was doubled without an increase in their fees; they were gifted spectrum licences rather than having to obtain them at auction; and they failed to deliver a digital switchover by 2008 (the original date set many years ago), despite being gifted spectrum in exchange for this.”

“In addition,” continued the statement, “the pricing mechanism used to set the network’s licence fee provides the networks with riskless access to spectrum (as the fee is related to their revenue). In contrast the subscription television sector pays full commercial rates for access to satellite and cable bandwidth and bears all of the commercial risk.”

But the government’s move has, of course, been welcomed by Free TV Australia, the trade body representing the free-to-air networks.

Julie Flynn, Free TV’s chief executive said: ““The licence fee rebates are a timely recognition of the key role played by commercial broadcasters in delivering Australian content on television.

“Free TV broadcasters are the major underwriters of Australian content despite the challenge of competing media platforms and fragmenting audiences.”

Free TV produced figures claiming that at A$282 million, licence fees paid by Australian broadcasters are A$12.95 per head, compared with the equivalent of A$1.08 per head of population in the UK and just A$0.07 in the USA.

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