LEGISLATIVE INSTRUMENTS ACT 2003
Section 87A - Explanatory Statement
Additional conditions on Community Television Licensees – conditions relating to other matters
Part 6 of the Broadcasting Services Act 1992 (the BSA) provides for the Australian Broadcasting Authority (the ABA) to allocate community broadcasting licences, including Community Television (CTV) licences. Under the BSA, Community broadcasting services are broadcasting services that:
- are able to be received by the general public,
- are provided for community purposes, and
- are not operated for profit, or as part of a profit-making enterprise.
On 9 June 2005, the ABA imposed two conditions on all CTV licences. The imposition was made under section 87A(7) of the BSA and is referred to in this explanatory statement as “the instrument”.
The power to impose conditions
The BSA provides that community broadcasting licences are subject to licence conditions set out in Schedule 2 to the BSA and for the ABA to impose additional licence conditions on individual licensees.
Section 87A of the BSA provides conditions that apply to CTV licences that do not apply to other community licences. Section 87A(1) states that the intention of Parliament is that services provided under CTV licences are to be regulated in a manner that causes them not to operate in the same way as commercial television broadcasting services.
Subsections 87A(2), (3) and (4) of the BSA sets out additional conditions relating to the sale of access to air-time by CTV licensees. Under subsections 87A (6) and (7) of the BSA, the ABA, by written determination, may impose additional conditions on all CTV licensees, including conditions relating to the sale of access to air-time and the governance of CTV licensees.
Intended impact and effect
The instrument imposes two additional conditions on all CTV licences.
The first condition requires a CTV licensee who becomes aware of financial difficulties that appear likely to cause it to enter into either or both of receivership or voluntary administration:
- to notify the ABA; and
- to make regular reports to the ABA about the measures it has taken in relation to the financial difficulties notified to the ABA and the progress of its financial affairs.
The second condition requires CTV licensees to make and keep a register of all persons to whom it sells air-time. The register must contain particular details in relation to the purchase of the air-rime.
The second condition also requires that CTV licensees actively monitor their compliance with the licence conditions in subsections 87A(2) and (3) about sale of access to air-time to people who operate businesses for profit or as part of a profit-making enterprise.
The intended effect of the instrument is to ensure that services provided by CTV licensees do not to operate in the same way as commercial television broadcasting services and, in particular:
- to assist the ABA to monitor compliance with special conditions imposed on CTV licensees under subsection 87A (2), (3) and (4) in relation to sale of access to air-time; and
- to enhance corporate governance of CTV licensees; and
- to provide early warning to the ABA of the chance of a CTV licensee going into either or both of receivership or voluntary administration.
The ABA does not intend that the first condition have the effect of limiting the range of reporting options open to industry, including informal communications, or to discourage licensees from seeking ABA assistance early.
Consultation
Before imposing the conditions the ABA sought public comment on the proposed conditions by calling for submissions.
- On 7 December 2004, the ABA placed an advertisement in The Australian seeking public comment by 17 January 2005.
- The ABA also wrote to the Community Broadcasting Association of Australia (CBAA) and all CTV licensees (including trial licence holders) explaining the process, the purpose of the proposed conditions and seeking their comment. A copy of the draft proposed CTV licence conditions was included with the letter.
- The ABA received three submissions in response to the advertisement and the letters.
- A meeting was held between the CBAA, and the ABA to discuss the issues further.
- The ABA assessed the submissions with particular consideration given to concerns raised by the CBAA on behalf of the sector.
- Rrecognising that the industry is still in a developmental stage, the ABA agreed to amend the proposed conditions in light of the submissions received.
- On 19 April 2005 the ABA wrote to the CBAA advising it of amendments to the proposed conditions, offering it a final opportunity to comment of the final conditions.
- On 6 May 2005, the CBAA advised the ABA of its acceptance of the proposed amendments to the conditions.
Description of the provisions of the instrument
Clause 1 of the instrument provides that it is to be referred to as the Broadcasting Services (Additional Conditions – CTV Licence) Determination 2005.
Clause 2 of the instrument provides that it will commence on 1 July 2005.
Clause 3 provides a definition for a term used in the instrument.
Clause 4 provides that the two conditions in Schedule 1 to the instrument are imposed on CTV licences.
Subclause (1) of condition 1of Schedule 1 to the instrument requires a CTV licensee to advise the ABA of the existence of financial difficulties that appear likely to cause the licensee to enter into receivership and/or voluntary administration.
Under Subclause (2) of condition 1, if subclause (1) applies, the licensee must provide the ABA with a written report of the actions it has taken in relation to its financial difficulties, and the progress of its financial affairs. A report is required within a month of advising the ABA of its financial situation and, thereafter, monthly reports to the ABA are required until the financial difficulties are resolved.
The ABA has included a note to emphasise that the condition does not have the effect of limiting the range of communication options open to licensees and to encourage licensees to seek ABA assistance early.
Subclause (1) of condition 2 of Schedule 1 to the instrument requires CTV licensees to make and keep a register of all persons with whom it has agreements or arrangements in relation to the sale of access to air-time.
Subclause (2) of condition 2 requires the register to contain the following details:
- whether the purchaser operates a business for profit or as part of a profit-making enterprise;
- whether the purchaser is a company that has a sole or dominant purpose of assisting a person in education or learning;
- the amount of air-time to which access has been purchased;
- the date of the air-time to which access has been purchased;
- the time of day of the air-time to which access has been purchased.
Subclause (3) of condition 2 requires CTV licensees to actively monitor their compliance with the requirements of subections 87A (2) and (3) of the BSA. Those provisions impose conditions regarding the sale of access to air-time to persons who operate businesses for profit or as part of a profit-making enterprise.