Communications Update October 2006

Contents

Legislation
Cases
Regulatory developments
Competition
Industry developments

Legislation

Content diversity vital in media reform

On 10 October 2006, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, announced changes to her media reform proposals that aim to ensure protection for local content and diversity while providing a framework for the transition to digital TV and new media services.

This changes to the reform proposals include:

• a requirement that the applicant for the new Channel B licence (which is intended to be used for innovative new services such as mobile TV) submit an Australian Competition and Consumer Commission access undertaking
• minimum levels of local content (to be developed following a review into the matter) 
• a guaranteed minimum of 12.5 minutes of local news, five days a week, in rural areas, and
• a two out of three rule restricting media ownership to a maximum of two only—a commercial TV or radio licence or associated newspaper in any radio licence area, in addition to the four/five voices test.

Responding to the Senate Committee report, the amendments are designed to address concerns that relaxation media ownership laws would impact local content diversity.

For further information see the DCITA website.

Amendment assists in privacy protection

On 19 October 2006, the Telecommunications Amendment (Integrated Public Number Database) Bill 2006 (Cth) (Bill) was introduced into the House of Representatives. The Bill addresses the competing interests of privacy standards and the need to access information considered to be in the public interest.

The integrated public number database (IPND) contains all residential and business phone numbers, with related information, and its maintenance and operation is currently the responsibility of Telstra.

Only a person authorised by the Australian Communications and Media Authority will be able to obtain IPND information for purposes specified by the minister. Criminal penalties will apply if the IPND information is used other than in the manner authorised.

For further information see the ParlInfo website.

Cases

High Court rules on notorious defamation case

On 28 September 2006, a High Court majority overturned the decision in the Supreme Court of Tasmania granting an interlocutory injunction restraining the broadcasting of a documentary film imputing that the plaintiff, O’Neill, was responsible for the deaths or disappearance in the 1960s of the three Beaumont children. Mr Davies and Roar Film Pty Ltd produced the documentary under contract with the Australian Broadcasting Corporation (ABC).

The majority held that in deciding whether to grant the injunction it must consider whether the plaintiff had demonstrated the existence of a serious question to be tried and whether damages would be an adequate remedy. The defence of justification was considered, with both truth and public benefit the requisite elements (as the case was considered under the Tasmanian defamation laws prior to the reformed national code).

While public discussion, carried out in good faith, will generally be seen to be in the public interest, there are exceptions such as threats to security. Moreover, courts will also be cautious when considering potential interferences with free speech. The court at first instance, decided that the amount of speculation surrounding the incident amounted to ‘trial by media’, a situation that was not in the public interest.

The High Court majority allowed the appeal referring to the importance of free speech and the failure by the lower court to properly weigh the possibility of an award of only nominal damages at trial. The court noted that public allegations of misconduct could produce benefits in appropriate circumstances and that, ‘the idea that the investigation and exposure of wrongdoing is, or ought to be, the exclusive province of the police and the criminal justice system, bears little relation to reality in Australia’.

For further information see Australian Broadcasting Corporation v O'Neill [2006] HCA 46 (28 September 2006)

Regulatory developments

Communications Alliance new fact sheets clarify consumer rights

On 27 September 2006, the Communications Alliance (CA) released four new fact sheets aimed at enhancing the effectiveness and transparency of consumer compliant handling in the telecommunications services.

The new fact sheets cover:

• the best ways, as a service provider, to handle a complaint and work with the Telecommunications Industry Ombudsman
• the obligation of service providers to inform customers of their rights to complain and seek resolution 
• complaint handling rules, principles and timeframes, and
• information consumers are entitled to request or receive.

The fact sheets are prepared to further the CA’s aim to maximise consumer satisfaction and promote best practice on the part of service providers.

For further information see the Communications Alliance website.

Spectrum available for digital radio mondiale

On 28 September 2006, the Australian Communications and Media Authority (ACMA) imposed embargoes on some frequency bands, not used by conventional broadcasting services, that are appropriate for services using digital radio mondiale (DRM).

The embargo is part of the introduction plan for DRM. As a digital broadcasting technology, DRM has attracted considerable interest in Australia and could deliver substantial benefits to the public.

Frequency allocation in these freshly demarcated bands will be for authorised purposes only. ACMA is receiving applications for trial licenses looking into DRM operations.

For further information see the ACMA website.

Newman comment breaches code

On 28 September 2006, the Australian Communications and Media Authority (ACMA) ruled that the licensee of 3MMM Melbourne was in breach of the Commercial Radio Code of Practice (Code) by falling short of contemporary standards of decency.

The investigation centred on an offensive comment made by Mr Sam Newman during the Saturday Football program earlier this year. Since then he has been suspended from his position and relevant staff are undertaking education on the Code. In an effort to ensure the incident is not repeated ACMA says it will continue to supervise the licensee and its actions in this area.

For further information see the ACMA website.

Ombudsman delivers semantic instruction

On 3 October 2006 the Telecommunications Industry Ombudsman (TIO) warned against the use of misleading labels in relation to ‘capped’ mobile phone plans.

Ombudsman John Pinnock found that a plan could not be aptly described as ‘capped’ when is an absence of spending limit resulting in excessive charging. Terms such as ‘unlimited’ and ‘free’ should also be given their natural meaning when selling telephone and internet products.

When the TIO  handles a complaint over an alleged capped, unlimited or free service it will consider whether, on the facts of each case, it was fair and reasonable for the consumer to assume the term was given its everyday meaning.

Acting on a finding that plan was confusing, or gave insufficient information, the TIO can either:

• set aside the additional charges
• discharge the customer’s contractual obligations, or
• pursue a course of action which leaves the customer in a financially neutral situation.

For further information see the TIO website.

ACMA signs off on premium protection

On 5 October 2006, the Australian Communications and Media Authority (ACMA) endorsed the Mobile Premium Services Self-Regulatory Scheme (scheme), which offers a raft of new protections tailored to the needs of children and adult mobile users.

The scheme was developed with the help of mobile phone companies and the providers of mobile content. Premium services provide customers with access to sports, music, ring tones, wallpapers, games, chat rooms and age-restricted content. The scheme recognises these new services require new regulations and protections.

Additional and customised protections include:

• service providers can issue a text ‘STOP’ command thereby halting undesirable services
• assessment and removal of adult or prohibited content 
• clear information dissemination of related costs and conditions of services 
• formal complaints process administered by the Telecommunications Industry Ombudsman, and
• guidelines for parents concerned about the wellbeing of children mobile users.

The scheme can be located at the Communications Alliance website.

For further information see the ACMA website.

ACCC crackdown on unreal ring tones

On 9 October 2006, the Australian Competition and Consumer Commission (ACCC) issued a warning to traders marketing ‘real’ or ‘true’ tones in a misleading fashion.

With images of popular artists being displayed in relevant advertisements many people have been duped into purchasing ringtones that are only cover versions. Consequently, the ACCC has put operators on notice and has emphasised the importance of prominent disclaimers if the ring tones offered are cover versions.

The ACCC will continue its supervision of this trend and points consumers to its guide Ring tone mayhem, available at the ACCC website.

Options kept open for new TV channel

On 9 October 2006, the Australian Communications and Media Authority (ACMA) embargoed the band 518 MHz–520 MHz for the potential development of UHF television channel 27 (520–526 MHz).

In contrast to other television channels being 7 MHz, channel 27 is only 6 MHz. While the future for the channel remains uncertain, the embargo represents the start of replanning process that could see an eventual transformation. Its potential release for mobile television, however, is still several years away.

For further information see the ACMA website.

ABC show lacked scientific precision

On 11 October 2006, the Australian Communications and Media Authority (ACMA) decided that the Australian Broadcasting Corporation (ABC) breached its own Code of Practice 2004 in falling to take reasonable steps to guarantee the factual integrity of The Science Show.

The information program, aired on ABC Radio National, investigated instances of possible scientific fraud. Not only was accuracy an issue, but ACMA was also critical of the ABC’s failure to include the opinions of the parties involved. This would have addressed the relevant balance issues.

The ABC’s decisive response, remedying the factual error and seeking the complainant’s viewpoint has alleviated the concerns of ACMA.

For further information see the ACCC website.

Updated information standards cater special needs consumers

On 17 October 2006, the Australian Communications and Media Authority (ACMA) registered a telecommunications industry code seeking to improve the transparency of information concerning telephone handsets for those with special needs.

ACMA views the code as offering significant benefits to consumers. Manufacturers and importers are required to make available all necessary information and armed with an effective and informed choice, consumers can now select the most suitable handset for their needs.

A copy of the code is available at the Communications Alliance website.

For further information see the ACMA website.

NBN found to be factually inaccurate

On 17 October 2006, the Australian Communications and Media Authority (ACMA) ruled that NBN Limited breached the Commercial Television Code of Practice (Code) with an edition of the Evening News on 16 May 2006 by failing to meet the accuracy threshold for current affairs programs contained in clause 4.3.1 of the Code. The program contained inaccurate statements regarding exploration licence holders rights to access private property.

NBN’s response did not satisfy ACMA, with a letter merely acknowledging the complaint. ACMA did not regard this as a substantive response. While not threatening further action, ACMA will continue to oversee developments and NBN’s actions in this area. NBN have informed its journalists that, wherever possible, the relevant legislation should be viewed to test the veracity of the interviewee’s claims.

For further information see the ACMA website.

ACMA seeks view on government spectrum holdings

On 18 October 2006, the Australian Communications and Media Authority (ACMA) commissioned an independent review of the nature and process of government spectrum holdings so as to maximise public utility.

In the face of continually increasing demand for spectrum ACMA recognises the importance of maintaining the correct balance between government and public access. SpectrumWise Radiocommunications Consulting will conduct the six-month review, which will entail widespread discussion with affected stakeholders.

More information regarding the review is available at the SpectrumWise website.

For further information see the ACMA website.

Competition

ACCC tests Telstra on key indicators

On 4 October 2006, the Australian Competition and Consumer Commission (ACCC) issued its twelfth imputation testing and non-price terms and conditions report for the February to June quarter under the enhanced accounting separation regime for Telstra.

Telstra was found not to be systematically discriminating against its wholesale customers. The report contains an imputation analysis of Telstra’s retail prices against what it charges other service providers. Further, the report comments on Telstra’s ability to meet particular non-price terms and conditions for its customers. Among other things, the report concluded that:

• imputed margins for fixed-line services have declined for all except for fixed-to-mobile calls and residential international calls, and
• for services offered over the unconditioned local loop core service, imputed margins are negative except when used to supply a bundle of ADSL and voice services to business customers.

For further information see the ACCC website.

Notification of access disputes

On 13 October 2006 the Australian Competition and Consumer Commission (ACCC) received notification from Optus Networks Pty Ltd, pursuant to Part XIC of the Trade Practices Act 1974 (Cth), of two access disputes with Telstra Corporation Limited. The disputes relate to:

• supply price of local carriage service, and
• supply price of wholesale line rental service.

The ACCC has commenced arbitration proceedings for these matters.

For further information see the ACCC website.

Radio still important amid technological change

On 18 October 2006, the Australian Competition and Consumer Commission (ACCC) announced its intentions to remain vigilant against anti-competitive manoeuvrings and to ensure technological developments are not inadvertently stalled as a result of merger activity in the media market.

While radio was highlighted as a medium experiencing less change, the ACCC was still wary of technological change affecting listening patterns.

Technological change has been consistently emphasised as an inevitable and powerful force. With the current reforms of the media, the ACCC stressed the vital importance of no one entity controlling all forms of media. Additionally, diversity of content would be a key influential factor in future determinations as traditional media market boundaries shift.

For further information see the ACCC website.

Industry developments

ACMA annual report released

On 19 October 2006, the Australian Communications and Media Authority (ACMA) issued its first annual report.

The report drew attention to ACMA’s actions in the area of internet and email services. ACMA’s success in this area includes:

• registering the world’s first legislative code of practice for internet and email service providers
• undertaking of prosecution of deemed offenders under the Spam Act 2003 (Cth) (Act), and
• introduction of the expedient spam reporting mechanism, SpamMATTERS.

The security and practical efficiency of online technology was identified as a significant issue.

Despite the complexity of the communications market, ACMA spoke confidently of its ability to meet its responsibilities and stakeholder interests. The upcoming allocation of the two new television channels was pinpointed as a crucial event.

ACMA chairman, Chris Chapman highlighted radiofrequency spectrum allocation and management as an important forthcoming issue. Other highlights of the report include:

• investigations, including investigations into complaints concerning the notorious Big Brother Uncut 
• national Do Not Call Register launched, and
• enhanced transmitter device protocol.

To access the ACMA Annual Report 2005–06 see the ACMA website.

This article was written by Duncan Giles, Special Counsel and Naomi Messenger, Solicitor.

For more information please contact

Name : Duncan Giles
Title : Special Counsel
Office : Sydney
Phone : +61 2 9225 5954
Fax : +61 2 9322 4000
Email : duncan.giles@freehills.com