Kevin Rudd

There has been a lot said about Kevin Rudd’s petition for a Royal Commission to ensure a strong, diverse Australian news media’. There was Rod Tiffen’s comment that Mr Rudd then responded to, and a host of other reports including this piece from Margaret Simons on the thinking behind the petition.  And Zoe Samios ran this piece about the difficulty of pinpoint the reach of News Corp in Australia.

There is certainly a lot of history between Mr Rudd and the main targets of his petition – Rupert Murdoch and News Corp – but maybe we can accept that, regardless of Mr Rudd’s views on News’ reporting on the ALP, there are some legitimate questions here about concentration of ownership and media responsibility.

Philip Napoli’s recent book, ‘Social Media and the Public Interest’ asks whether public interest objectives that traditionally attach to news media can be applied to social media and digital platforms. Napoli observes that, just as oligopolistic markets tend to undermine the rationale for a ‘marketplace of ideas’, the idea that ‘counter speech’ is the answer to false news is looking more shaky in a global, digital environment. While there are other reasons for rejecting the marketplace of ideas approach (as our colleague, Kari Karpinnen explained so well in Rethinking Media Pluralism) it still has influence in Australia, particularly in our fragmented approach to media standards.

But while Napoli has asked about applying public interest principles to social media, in Australia it seems we have enough problems applying it to traditional media. The ‘Save our Voices’ campaign, launched by the three regional broadcasting networks with Australian Community Media and fronted by Ray Martin, wants the removal of the one-to-a-market cap on commercial television licences. With the repeal of the cross-media rules and the national audience reach rule, the licence cap is the cornerstone of structural diversity in Australian commercial media. It means that in most licence areas, there will be at least three commercial media operations. Broadcasting law no longer stops mergers between local newspapers, television and radio, and neither does it regulate ownership of online news sites or other digital media, pay TV or national newspapers.  In the concentrated Australian media market, there must be an alternative to further concentration in regional Australia.

It was good, then, to see Michelle Rowland, the shadow communications spokesperson, speak of the need to rethink regulation in a way that ‘takes account of algorithms as much as ownership’ and that considers both media plurality and industry sustainability. She also referred to the research the ACCC commissioned from the Centre for Media Transition – which drew on the work we’ve been pursuing in the Media Pluralism Project – showing the need for ways of measuring media plurality that take account of aspects such as consumption and impact. While the one-licence for TV and two-licence for Radio caps on ownership are important, these shouldn’t be the only two tools (the other being the local area points test) that we have available for assessing plurality. That, of course, is what we’ve been working on at the Media Pluralism Project, and we hope to have a new tool for demonstration very soon.

As we’ve argued before (and as has Des Freedman et al. at the Media Reform Coalition in the UK), in order to maintain and ‘future proof’ a media ecology that is capable of sustaining a range of diverse and conflicting voices and perspectives some genuine media reform is urgently required. At a minimum this would include:

  • A plurality/diversity measurement framework that takes into account cross-market audience share in traditional (TV, Radio, Newspaper) and online news markets. This framework needs to include various methodologies that uses quantitative measures of reach and consumption, and qualitative data on the wider media agenda impact;
  • Regular reviews by an independent regulator to evaluate relevant thresholds based on these cross-media market audience shares. These thresholds would be actively monitored to guide intervention and remedies aimed at promoting a diverse media ecology at the national and local level including in relation to public service media provision;
  • News distribution on digital platforms/intermediaries should be taken into account in assessments of diversity including the impact of algorithms on news brand availability (and the public affairs content of those brands). This kind of monitoring by an independent regulator would, using appropriate metrics, assess whether or not platform algorithms are favouring particular news providers and voices over others; and, very importantly,
  • In the event of mergers between media organisations an independent regulator should be able to apply a public interest test to assess whether the particular combination of media groups will benefit audiences in terms of the provision of public affairs content in the markets if the transaction were to proceed.

Original image available here.

Encouraging local content – especially for people located outside metropolitan centres – is a policy issue often related to, but separate from, media pluralism.

With COVID-19, that may be changing.

The crisis – two decades in the making

In Australia, the challenge of promoting localism across a vast but sparsely populated continent has been the subject of successive policy reviews. In the 2000s, concerns raised in the Local Voices parliamentary inquiry and other forums led to broadcast quotas and then to regular monitoring of both regional radio and TV by the regulator, the Australian Communications and Media Authority. Research, such as that conducted in 2019 by the Centre for Media Transition, has pointed to the importance of local content and also the challenges in making it commercially viable.

In the digital platform era – as advertising revenue moves from news producers to distributors – the story of dwindling diversity has been entwined with the loss of localism. Plummeting ad revenue has resulted in the temporary closure of many regional newspapers. Recent developments include the following:

  • News Corp suspended 60 community newspapers
  • Australian Community Media announced that a large number of newspapers would suspend all print operations, with some moving online, while some daily newspapers would continue
  • Other independent regional newspapers such as The Sunraysia Daily in regional Victoria and The Barrier Daily Truth in regional News South Wales have closed, dramatically reduced their frequency or moved entirely online.

Will the print versions of these publications return when the COVID crisis is over? No one knows the answer to this, but some ideas for further policy change have been fomenting among the larger regional media ownership groups.

These suggestions needs to be considered in light of existing, much reduced, legislation. And rather than risking a temporary response to the coronavirus crisis setting future policy direction, it also might be time to rethink how policy research can help us understand current levels of localism and diversity.

Further calls

Even before the coronavirus, some in the industry had called for more extensive legislative change. In submissions to a Senate inquiry in 2016, for example, both News Corp and the Ten Network said all media ownership rules should be removed. More recently, further change to the ownership rules has been proposed by the new entrant on the media ownership scene, Antony Catalano of Australian Community Media. It was ACM that picked up a large number of regional titles in 2019 after Fairfax Media (publisher of The Sydney Morning Herald and The Age, among other titles) was acquired by the Nine Network in the most significant corporate transaction following changes to media ownership rules in 2017. Catalano called for removal of the rule that limits control of commercial television licences in most markets to one per licence area.

In announcing the suspension of News Corp regional publications in early April 2020, News Corp CEO Michael Miller identified the actions of digital platforms and the regulation faced by local companies as reasons for the dire economic situation of regional publications, even ahead of the collapse in advertising prompted by the coronavirus. He singled out the remaining media ownership laws, saying that only ‘partial reform’ had been achieved so far.

Industry assistance

Soon after Michael Miller took a stand on regulation – an argument for more of one kind and less of another – the Australian government announced a policy response to COVID-19. It included a $50 million funding package for regional media and a 12 month waiver of spectrum tax for commercial radio and television broadcasters, including regional broadcasters. It also included suspension of existing broadcast quotas and financial obligations relating to Australian and children’s programs but – despite speculation that regional television broadcasters were considering an end to some bulletins – did not suspend regional radio and TV quotas.

In a related policy decision, on 20 April 2020 the government announced it would ask the competition regulator to make a mandatory code of practice addressing commercial relations between media organisations and digital platforms, ending a voluntary code development process and thereby supporting calls from local media for stronger government intervention.

So, things are being done to help Australia’s news producers cope with COVID-19 and with the impact of digital platforms. But should further changes to the media ownership rules be pursued as well?

Genuine ‘reforms’?

It’s important to see the proposals from Michael Miller and Antony Catalano as part of a narrative that sees digitisation and much freer access to international media as the reasons for dismantling media ownership rules. This was evident even twenty years ago in reforms attempted by former Communications Minister Richard Alston; it manifested again in the removal of foreign ownership laws and part of the cross-media rules under Helen Coonan in 2006; and it was a key part of the rationale for media reform pursued in 2016 and 2017 under Mitch Fifield, albeit with a new level of urgency injected by the challenge from digital platforms.

The loss of revenue and the additional competition are real. And there is a good argument for strengthening local companies in order to respond to international competitors, even if the link between cost savings and continuity of quality has never actually been demonstrated.

There may still be private, commercial benefit in removing the remaining rules but – unlike past exercises in policy reform – there is no longer any shimmer of accompanying public interest. To understand this, let’s look at the two rules that remain.

  • The rules in ss 53 and 54 of the Broadcasting Services Act 1992 (the BSA) establish that (except in a few smaller markets) there is a limit on any person controlling more than one commercial television licence or more than two commercial radio licences in any one licence area (and there are accompanying rules in ss 55 and 56 for company directors). The rules relate to control rather than just ownership and the Act allows for tracing control through a string of companies and for looking behind surface-level arrangements.
  • There are prohibitions in ss 61AG and 61AH of the BSA on transactions that result in ‘an unacceptable media diversity situation’. There is a complicated mechanism for awarding points to each media group or independent media operation in a local area, as recorded in a register. The scheme is colloquially known as the ‘5/4 rule’ because it effectively stops transactions that cause the number of points in a metropolitan area to fall below 5 or the number of points in a regional area to fall below 4, or to further erode the number of points in an area that is already below these levels.

These rules remain after the removal, in 2017, of the last version of Australia’s cross-media rules. It prevented common control of commercial radio, commercial television and associated newspapers in the one licence area. The 2017 amendments also removed a rule preventing control of commercial television licences with a combined licence area population of more than 75 per cent of the Australian population. The second of these had been characterised in policy terms as a means of ensuring there would be regional commercial networks aside from those based in capital cities.

A measured approach

Looking at the remaining rules, it may well be that the points system governing ‘unacceptable media diversity situations’ can be improved. It gives a single media operation the same value, without reference to its contribution to media diversity. For example, a commercial radio station broadcasting mostly entertainment programs or programs syndicated from metropolitan stations is awarded one point; the same value is given to a local newspaper that employs its own journalists who cover local government, local courts and other local events.

In contrast, as [Derek Wilding] argued in the 2016 media reform process, the licence area caps are crucial to the structural separation of news-producing media organisations in Australia. The one licence cap on commercial television effectively ensures there are at least three commercial media operators in most areas of Australia. Of course, most areas have more commercial media services and these commercial sources are supplemented by the public service national broadcasters as well as community broadcasters.

Already, cross-media ownership of radio, television and print is permitted. In a number of key regional markets across Australia, allowing the three regional television networks to merge could have a serious negative impact on media diversity, even if that means companies such as Australian Community Media are strengthened.

Instead, we need to re-assess the value and operation of the points scheme under the ‘5/4 rule’. But before we can propose meaningful reform, these markets need to be mapped. Benchmarks need to be established based on current levels of local news production.

The measurement of media pluralism in Australia will become a central part of the policy research we conduct in the final phase of the Media Pluralism Project.

Media Pluralism - Ofcom

On 21 January 2020, under their obligations as the main media regulator in the UK to investigate the impacts of mergers on media plurality, Ofcom was issued a Public Interest Intervention Notice (or “PIIN”) by the UK’s Secretary of State (SoS) for Digital, Media, Culture, and Sport (DMCS).

Ofcom was asked to investigate (under section 44A of the Enterprise Act 2002 by 13 March 2020) the public interest impacts of a merger between Daily Mail and General Trust (DMGT) and JPI Media publication groups in terms of a sufficient plurality of views in newspapers in each market for newspapers in the UK. The Competition and Markets Authority (as part of the Public Interest test) was separately required to report to the Secretary of State on the grounds of competition policy.

As we’ve mentioned previously, Australia has no such equivalent public interest test that works on plurality grounds.

Interestingly, the Public Interest test ground on which Ofcom was requested to report by the SoS for DMCS related solely to the impact on the plurality of views in newspapers. But recognising the wide-spread societal changes to the way news is now distributed and consumed in the UK on multiple platforms and devices, Ofcom chose to take into account the wider UK news market.

Investigation of the plurality impacts of the DMGT and JPI Media Publications is the fourth major Public Interest test undertaken in the UK since the introduction of Ofcom’s Media Pluralism framework, but only the second involving newspapers (the first involving Trinity Media, now known as ‘Reach’). Previous investigations involving the Public Interest test on completed acquisitions have included: the said acquisition by Trinity Mirror plc of publishing assets of Northern & Shell Media Group Limited in June 2017; the acquisition by International Media Company of shares in Lebedev Holdings Limited and by Scalable Inc of shares in Independent Digital News and Media Limited in June 2018; and the proposed acquisition of Sky plc by 21st Century Fox Inc. which was ultimately surpassed by a knock out bid by Comcast then only to end up as part of the Disney and News Corp buy out arrangements in March 2019.

It’s worth briefly mentioning key points of perhaps the best known of these earlier investigations, the BSkyB/Twenty First Century Fox merger. The investigation by Ofcom in that merger had two distinct components, one relating to sufficient plurality and the other relating to broadcasting standards. On the question of sufficient plurality, Ofcom’s advice to the SoS for DCMS was that the proposed merger raised significant public interest concerns as a result of the increased influence of the Murdoch Family Trust over the UK news agenda and the political process. As a result it found this may justify making a reference by the SoS to the CMA.

Ofcom recommended, among other options, the option of a specific undertaking whereby Sky News would establish an independent editorial board to mitigate and insulate Sky News from the influence arising from the control by Twenty First Century Fox.

In terms of the Ofcom’s plurality measurement framework which was used to assist Ofcom in making their decision, the share of ‘cross platform audience’ and ‘Share of Reference’ metrics (from their 2018 News Consumption Survey) are shown in the following slides:

Cross Platform Retail Providers

Cross Platform Retail Providers

Retail Provider Share of Reference

Retail Provider Share of Reference







The slides show how, at a retail level, cross platform audience reach is led by the BBC, ITV, Sky and DMGT in that order. For the share of reference metric, it can be seen again to be led by a long way by the BBC, followed by the same players: ITV, Sky and DMGT media groups. Interestingly, the major ‘intermediary’, Facebook, has a greater share than the second, third and fourth media groups.

The most recent Ofcom application of a Public Interest test has been in advice provided to the UK Secretary of State for the Daily Mail and General Trust plc takeover of JPI Media Publications limited in March 2020.

While all the Public Interest test applications following the introduction of the Measurement Framework have relied on the Share of Reference mechanism, this latest decision is particularly interesting for us because of a fairly detailed discussion of brand influence and title ‘voice’, in the context of the assessment of sufficient pluralism. Ofcom have also delved into a distinction long used in pluralism policy and regulation analysis: between the ‘external’ and ‘internal’ pluralism dimensions of the takeover. The former has been applied to the wider newspaper market in the UK, while the latter has been deployed in relation to the stable of DMGT titles themselves.

The overall summative findings in their advice to the SoS are that the “transaction should be considered in the context of the challenges faced by newspapers in a changing news market” and, that Ofcom, “do not expect the transaction to reduce the plurality of views provided across newspaper groups in the UK”. While it is noted that the number of media groups in the UK has dropped from seven to six, the argument is made that the number of titles has not changed. Furthermore, and drawing on the slides shown below, the i newspaper has a relatively small readership with less than 0.1% share of cross media news consumption. It is suggested that this increase in total DMGT share makes little difference to the overall share post-merger. There’s analysis of the audience of the i newspaper indicating that the readership tend to use a larger than typical range of news sources, and this therefore provides an ameliorating effect through the dilution of the i’s impact for this group.

Retail Preference pre and post 2019

Retail Preference pre and post 2019

Reach of platforms pre and post 2019

Reach of platforms pre and post 2019









In their recommendation on the DMGT/JPI Media deal to the SoS, Ofcom gave the merger the green light. Their argument was that the nominal increase of share of reference in ‘retail’ sources flowing from the merged group (see the slides above, where retail reach increases by 1% and share of reference change is less then 1%), and the likely survival of the ‘i’ (newspaper) voice in the DMGT group’s titles (in itself an interesting argument involving insulated editorial control etc.), maintains ‘sufficient pluralism’ and therefore warrants it going ahead.

In recent times ideas of regulation itself are being reassessed in the platform governance space. We can see this in a series of competition law investigations in the European Union in relation to first Google and then Facebook, along with high fines, which we interpret as clear evidence of these shifts. Prior to that, the European Commission imposed a 13-billion-euro fine on Apple Corporation. Appearances by Facebook CEO Mark Zuckerberg before US Congressional hearings and the European Commission also underscore a new phase of regulation.

For Andrew Keen, in his book How to Fix the Future, these developments signal that ‘regulation is, indeed, innovation’. Keen argues that state regulation needs to look to the innovative trends and legislation in the European Union, which has demonstrated a clear desire to rein in what he sees as the hegemony of US corporations.

In Australia, the role of digital platforms in the supply of news is the subject of a two-year inquiry by the national competition regulator, the Australian Competition and Consumer Commission (ACCC). The inquiry was one of several by-products of a wave of legislative and policy change in 2017 which included the repeal of Australia’s remaining cross-media ownership laws. While there are still some sector-specific ownership and control rules, they are limited in number as well as in scope, applying only to legacy media of commercial television, commercial radio and associated (print) newspapers.

The review by the ACCC, and the possibility of a regulatory intervention using competition law, is great significance. In addition to considering aspects of market power in relation to advertising, the inquiry directly confronts the role of search engines, aggregators and social media platforms in the current news environment.  The Issues Paper released in February 2018 noted that the inquiry would consider ‘the potential impact of big data technologies and the use of algorithms by key digital platforms on media diversity’.