The Federal Budget held no surprises for the communications sector, given the announcement of a media reform package by the Communications Minister a few days before the Budget. The key reforms in that package include:

  • The previously announced changes to the media merger rules which, if implemented, will allow an entity to control a television licence covering up to 100% of the Australian population and will also allow an entity to control television and radio licences, together with associated newspapers, in the one licence area (the current rules restrict ownership to "2 out of 3" of these platforms in the one market).
  • The abolition of licence fees for commercial television and radio broadcasters, to take effect from 2016-17. The loss of revenue from these fees will be partially offset by a new fee for broadcasting spectrum, to be imposed with effect from 2017-18.
  • A proposed content review, to consider whether the Government's measures currently in place to support the production and delivery of Australian and children's content remain fit for purpose.
  • Further restrictions on gambling advertising for live sporting events, which will apply across all platforms (ie, free to air television and radio broadcasting, subscription television and streaming services).

Although the Government has announced these initiatives as one media package, it is not clear that all elements will be implemented. The changes to the media merger rules do not have support from the Labor Party or the Greens (who argue that the "2 out of 3" rule should be retained) and it is not assured that the minor parties and independents in the Senate will support these reforms. For example, Nick Xenophon has indicated that he believes new taxes should be imposed on Facebook and Google to reflect the advertising revenue these entities earn in Australia. Notwithstanding the gambling ad ban included in the package, the Xenophon Party senators may withhold support for the legislation necessary to implement this package if (as expected) the Government does not move to impose such a tax. Therefore the uptick in share prices in media companies – particularly Ten Network – that occurred on the announcement of the media reform package may be both premature and overly optimistic.

The Budget also included funding for the ACCC's broadband speed monitoring program, an initiative first announced in February. This program will assist the ACCC in its monitoring of potentially misleading and deceptive conduct from telecommunications companies in advertising speeds of their services. It is expected that the ACCC will commence this program in the second half of 2017, notwithstanding continuing industry objections.

On the technology side, many initiatives were announced across multiple portfolios, reflecting the Government's focus on digital delivery of its own services and support for the digital economy and open data. These initiatives include, for example, funding for the development of a program for Australians to have an electronic health record (which raises interesting privacy issues), the announcement of an "open banking" scheme to allow customers to access their banking data, and the establishment of a new Cyber Security Advisory Office.

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