Australia: Easing the regulatory burden on regional commercial radio broadcasters - the Broadcasting Services Amendment (Regional Commercial Radio) Bill 2011

The Broadcasting Services Amendment (Regional Commercial Radio) Bill 2011 (Bill), introduced into the Senate on 24 November 2011, proposes to amend various provisions of the Broadcasting Services Act 1992 (BSA) that relate to obligations imposed on regional commercial radio broadcasting licensees.

The Explanatory Memorandum to the Bill states that:

The Bill also provides exemptions to the local content requirements for specific broadcasters, amends previsions relating to "trigger events" and ensures consistency with Australia's international obligations under the Australia – United States Free Trade Agreement (AUSFTA)

Current obligations for regional commercial radio broadcasters

1.Local Presence

A local presence licence condition applies to regional commercial radio broadcasting licensees which requires:

1. all licensees to keep records of existing levels of local presence from 1 April 2007 and to submit annual reports to the Australian Communications and Media Authority (ACMA) about the licensees' compliance with this notice during the financial year; and
2. licensees affected by a 'trigger event' after the proclamation date of 4 April 2007 to maintain existing levels of local presence (defined by reference to staffing levels directly related to the licence and active studios and other active production facilities that existed in the three months prior).

A "trigger event" is defined as the transfer of the licence, the formation of a new registrable media group, or the change of controller of a registrable media group (which includes a commercial radio broadcasting licence).

Following a trigger event, affected licensees must meet minimum service standards for local news (at least 12.5 minutes of local news between 5am and 8pm five days per week), local weather, local community service announcements, emergency warnings and, where applicable, designated local content programs.

Following a trigger event, affected licensees must also give the ACMA a draft local content plan within 90 days. The local content plan must set out how the licensee will comply with the applicable minimum service standards. The plan is subject to approval by the ACMA. Once approved, the licensee must take all reasonable steps to ensure compliance with the plan, and submit an annual compliance report.

2.Local Content Requirements

A summary of the proposed changes

The BSA requires a review of local content, local presence and trigger events every three years and in March 2010, the Minister for Broadband, Communications and the Digital Economy, Senator the Hon Stephen Conroy, released a local content discussion paper in response to feedback from the Productivity Commission, the ACMA, and regional commercial broadcasters. There was a general consensus that the compliance burden for the local content and local presence provisions for regional commercial radio licensees is considerable and affecting the operation and viability of regional radio services. In addition, the submissions called for a more balanced approach which considered the commercial and public interest.

In summary, the Bill:

• amends the existing local presence licence condition by reducing the local presence requirements resulting from a trigger event from perpetuity to 24 months. This will require broadcasters to maintain an existing level of local presence for a period of 24 months after a trigger event. Remote area service radio licences and regional radio licences will be exempt from the local presence condition;
• modifies the current local content conditions imposed by the BSA by reducing the number of weeks (from 52 weeks to 47 weeks per year) that broadcasters must provide local content and local news and information. The period will be continuous and will begin on the second Monday in December each year (the ACMA may specify a different period for certain licences);
• provides exemptions from local content requirements for remote service radio licences, regional racing service licensees and a small number of licensees operating outside the broadcasting services bands (those licensed under section 40 of the BSA);
• exempts remote area service radio licences and racing services licences from the local presence and additional local news and information requirements after a trigger event;
• broadens the definition of a 'trigger event' to include certain types of changes in control of a licence, being when "a person starts to be in a position to exercise control of a regional commercial radio broadcasting licence", or when "a person ceases to be in a position to exercise control of a regional radio broadcasting licence" and provides the ACMA with discretion to determine the extent to which the trigger event provisions apply to allow for improvements to business practices (including internal corporate restructures where the ultimate controller does not change) and reduce unintended consequences from events which are not initiated by licence holders (including involuntary administration, bankruptcy and court orders);
• clarifies that changes to local content licence conditions do not apply in respect of the Australian music content required to be aired by regional radio broadcasters; and
• ensures consistency with Australia's obligations for radio local content under the AUSFTA by integrating the current separate requirements for Australian music and regional local content so that local content provisions will in the future 'concern Australian music'.

How will the Bill impact regional commercial radio broadcasters?

As mentioned above, the Bill intends to strike a balance between the interests of regional commercial radio broadcasters and regional and rural audiences by reducing the compliance burden and costs under the current legislation, while ensuring that regional and rural Australians receive local content in addition to that provided by the national broadcaster.

Regional commercial radio broadcasters will have less compliance requirements and greater flexibility in meeting their local content requirements, as the Bill will reduce the local content requirement to 47 weeks of the year, providing for industry working arrangements such as employee annual leave entitlements. Further, the new provisions also take into account the limited on-air staff available in some regional areas and the difficulty obtaining short-term replacements for staff on leave and reducing the record keeping and reporting requirements.

Under the current provisions, the local presence requirements following a trigger event apply indefinitely. The introduction of a 24 month period on the local presence obligations will substantially reduce the long term regulatory and compliance requirements of regional licensees. Licensees will benefit from improved technical, business practices and/or economic circumstances, subsequently encouraging innovation in regional radio businesses. This will also give licensees an opportunity to gauge community expectations about local presence before making further changes. In addition, the implementation of the 24 month period will significantly reduce compliance costs because, after the 24 month period expires, licensees are no longer required to maintain the same level of local presence or report on compliance with the obligations. This reduces the ongoing regulatory compliance costs for regional radio broadcasters and provides greater flexibility in meeting the local content requirements.

In addition, the scope of the 'trigger event' is broadened. However the definition excludes circumstances that are beyond the control of regional commercial broadcasting licensees or that do not lead to a significant change in control of licence. For example, where a control event is attributable to a transfer of shares without financial consideration between relatives (i.e. death followed by inheritance).

The introduction of the Bill will also ease the burden on licences that cover a wide geographical area or provide highly specialised content (i.e. racing) by exempting them from the local content provisions. These changes, however, will only affect a small number of licences and therefore have minimal impact.

The new provisions ensure localism is still provided to regional audiences by requiring licensees affected by a trigger event to provide local news, information and emergency warnings. Additionally, the amendments do not prevent regional radio licensees from broadcasting more than the minimum amount of local content required under the BSA.

This Bill is currently before the Senate. Holding Redlich will provide an update at such time as the Bill is passed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.