Convergence Review Framing Paper – April 2011

Louise McElvogue, has been appointed as the 3^rd member of the Convergence Review Committee (joining Glen Borham (Chair) and Malcolm Long).  Louise has worked in the United Kingdom including launch of ‘SeeSaw’[1]  a video-on-demand (VOD) platform operated by Arqiva, which acquiring the remnants of Project ‘Kangaroo’ (the defunct broadband TV joint-venture from BBC Worldwide, ITV & Channel 4).  Louise previously worked on the launch of ‘4oD’, the Channel 4 (UK) VOD platform.[2] Louise McElvogue adds expertise in delivery of content on broadband systems which is a welcome addition as VOD and IPTV platforms have the potential to add the diversity and competition to the Australian media environment.

My blog of 12 April 2011 provided a review of the process of the Convergence Review 2011– the medium and the message.  The ‘Framing Paper’,[3] issued on 28 April 2011, is a step in the review process leading to the ‘Issues Paper” in June and hearings by the committee in July 2011.

Timeframe of Convergence Review

Framing paper submissions close:	10 June 2011
Emerging Issues paper released:	June 2011
Hearings:	July 2011
Detailed discussion papers:	August 2011
Final report:	March 2012

The ‘Framing Paper’ sets out the committee’s thinking on principles that should guide media and communications regulation in Australia, so as to provide a ‘starting point’ to indentify the objectives of the convergence review.  The principles identified in the Framing paper cover diversity and competition of media sources, a focus on Australian content, an acknowledgment of the importance of reflecting community standards in the delivery of content and addressing the interests of Australians as ‘consumers’ of content delivered on convergent media and the public interest in the allocation of spectrum by which important communication services operate:  The principles stated in the Framing Paper’ are:

DIVERSITY & COMPETITION

Principle 1: Australians should have access to a diversity of voices, views and information

Principle 2: The communications and media market should be innovative and competitive, while still ensuring outcomes in the interest of the Australian public

Local and Australian content

Principle 3: Australians should have access to Australian content that reflects and contributes to the development of national and cultural identity

Principle 4: Australians should have access to news and information of relevance to their local community

Community standards

Principle 5: Communications and media services available to Australians should reflect community standards and the views and expectations of the Australian public

Consumer and citizen rights

Principle 6: Australians should have access to the broadest range of content across platforms and services as possible

Principle 7: Service providers should provide the maximum transparency for consumers in how their service is delivered

Spectrum allocation

Principle 8: The government should seek to maximise the overall public benefit derived from the use of spectrum assigned for the delivery of media content and communications services

Having stated these principles the committee invites comment on the appropriateness of the principle as a starting point for the review, as well as asking for submissions on whether there are other principles that a relevant to the convergence review and inviting submissions as to what policy issues do the principles raise in relation to the evolving media and communications environment.[4]

The Convergence Review avoids the controversial topic of sporting rights; by coincidence the release of the Framing Paper occurred on the same day as press speculation that Australian Football League (AFL) television rights from 2012 to 2016 will be licensed to Fox Sports, Channel Seven and Telstra for A$1 billion.[5]

I will repeat a paragraph of my previous blog on the Terms of Reference of the Convergence Review: The Committee will address what are potentially contentious areas of regulation of audiovisual services.  The existing free-to-air and pay television services are facing new TV-like services such as IPTV, internet TV and video on demand, all of which emerging services compete with traditional free-to-air and pay TV services for viewers.  The treatment of advertising controls, programming classification and Australian content obligations that are directed to “the development of national and cultural identity” are likely to see the existing players arguing for positions that achieve a ‘level’ regulatory playing field across the different media technologies that can deliver TV or TV-like services.[6]  Both existing media players and emerging players will be focused on arguing for what they see as a conducive competitive environment for each play or industry sector.[7]

Further information is available at the DBCDE website http://www.dbcde.gov.au/digital_economy/convergence_review#submissions

 

Twitter @DBCDEgov

Review secretariat - Tel: 02 6271 1255

convergence@dbcde.gov.au

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[1] http://www.seesaw.com/

[2] http://www.channel4.com/programmes/4od

[3] http://www.dbcde.gov.au/digital_economy/convergence_review

[4] Framing Paper, page 19.

[5] Caroline Wilson, AFL's billion dollar baby looms, Sydney Morning Herald, 28 April 20110: http://www.smh.com.au/afl/afl-news/afls-billion-dollar-baby-looms-20110428-1dxly.html#ixzz1Kn8zN55o

[6]  The Terms of Reference in paragraph 5 b. refer to “ensuring the ongoing production and distribution of local and Australian content that reflects and contributes to the development of national and cultural identity” http://www.dbcde.gov.au/digital_economy/convergence_review/convergence_review_terms_of_reference

[7] The Terms of Reference in paragraph 5 a. refer to “the development and maintenance of a diverse, innovative, efficient and effective communications and media market that operates within an appropriately competitive environment and in the best interest of the Australian public” http://www.dbcde.gov.au/digital_economy/convergence_review/convergence_review_terms_of_reference

The diagnosis & treatment of allergies to ACCC legal action over FaceBook posting by ‘fans’ of a company

Allergy Pathway operates clinics for the diagnosis and treatment of allergies.  In 2009 the Australian Competition and Consumer Commission (ACCC), as competition regulator, formed the opinion that the way in which Allergy Pathway promoted its services in traditional media and on the web breached the Trade Practices Act 1974 (Cth) in the following ways: Allergy Pathway engaged in misleading or deceptive conduct (s 52); falsely represent that services are of a particular standard or quality (s 53(aa)); represent that services have benefits they do not have (s 53(c)); and engage in conduct that is liable to mislead the public (s 55A).

Justice Finkelstein in the Federal Court, accepted the claims of the ACCC and ordered Allergy Pathway to carry out corrective advertisement, including on “all websites which are owned, operated, controlled or maintained by or on behalf of” Allergy Pathway;[1] in addition a trade practices compliance training program was ordered to be implemented by the company. The matter should have ended there but for a later social media marketing campaign that included a YouTube video uploaded by the company, which was linked to FaceBook and Twitter posting by Allergy Pathway.

This marketing campaign ended up with the company facing contempt of court proceedings for breach of the 2009 orders.  The outcome was that fines of $7,500 were imposed (the ACCC was asking for $10,000).

The YouTube video, FaceBook posting and Twittering by the company seem an uncomplicated claim, however part of the ACCC’s claim against the company was the posting by ‘fans’ on the Facebook wall and Twitter messages was the responsibility of Allergy Pathway and was part of the company’s contempt of the court orders.

In a February 2011 judgment Finkelstein J. describes the ACCC’s allegation as being that the contempt of the 2009 orders was made up of publications that were grouped into several categories: ‘(1) statements and links to statements posted by Allergy Pathway on its website and Facebook and Twitter pages and in a video posted on YouTube and embedded on its Facebook and Twitter pages; (2) testimonials written by clients and posted by Allergy Pathway on its website and Facebook and Twitter pages; (3) testimonials written and posted by clients on Allergy Pathway’s Facebook “wall”; and (4) Allergy Pathway’s responses to queries posted by members of the public on its Facebook wall.”[2]

Allergy Pathway conceded that most of the statements in categories (1), (2) and (4), breach the 2009 orders. The category (3) statements were the subject of argument before Finkelstein J. as to whether statements posted on the respondent’s Facebook and Twitter pages by others constitutes publication by Allergy Pathway. To restate part of the 2009 orders the company undertook not “make or publish or cause to be made or be published, in any internet website”[3] statements (set out in the judgment) that had been determined to breach the Trade Practices Act.

To determine whether the social media campaign was caught by this 2009 undertaking, Finkelstein J. considered cases from defamation law in order to focus on the meaning of the words “publish” and “make”.  There are pre-internet cases on posting on walls of the golf club premises in England and the walls of lavatories in Texas bars, which put the responsibility on the person in charge of the premises to remove defamatory material, after it has been brought to their attention. I cover these cases in a 1997 article on defamation on the internet.[4]

Since that time there have been a number of internet cases that confirm, with regard to defamation law, that the person in charge of a ‘virtual’ wall has responsibilities to remove defamatory material, after it has been brought to their attention.  Finkelstein J. commented that that Allergy Pathway had conceded that it “knew that persons had published testimonials on its Twitter and Facebook pages and that it took no steps to have them removed. I infer that one reason Allergy Pathway did not remove the testimonials was that it wanted to take the benefit of the praise for its services. Another possible reason is that Allergy Pathway thought the testimonials added legitimacy to its business.”[5] Applying the line of reasoning from the defamation cases Finkelstein J. concluded that Allergy Pathway became the publisher of the testimonials and “accepted responsibility for the publications when it knew of the publications and decided not to remove them”. [6]

The end result of the social networking campaign for the company was that it had to pay the fines, the full legal costs of the ACCC (on an indemnity basis) and carry out further corrective advertising on the front counter of its clinics, its website and Twitter and Facebook pages. Allergy Pathway was also required to send a letter (electronically or otherwise) to all of its customers explaining what has occurred.

What can be taken from this case is that for whatever media is being used – is that first you have to get the message compliant with Federal trade practices legislation[7] and the fair trading legislation of the States or Territories; the second take out from the case is the social media campaign has to be actively managed.

Any virtual ‘wall’ that customers can post to, must be edited to keep it on message and avoid statements that the ACCC or state or territory fair trading departments may jump on.  Not all praise from customers is good news; such as if it acts to mislead other customers or potential customers (in way prohibited by trade practices and fair trading legislation). 

If any messages act to misrepresent the products or services or otherwise are misleading or deceptive messages; then if they remain for a significant time on the virtual ‘walls’ set up as part of any social media campaign, the company responsible for setting up and managing the virtual ‘walls’ will be accepted as taking responsibility for the publishing of the misleading messages – which can have consequences as described above.

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[1] ACCC v Allergy Pathway Pty Ltd [2009] FCA 960 (27 August 2009)

[2] ACCC v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74 (10 February 2011) [8].

[3] ACCC v Allergy Pathway Pty Ltd [2009] FCA 960 (underlining added for emphasis).

[4] Morris Averill, ‘Defamation – The Internet & the World-Wide Web’, published in ‘Internet Law Anthology ‘, Prospect Publishing (1997).

[5] ACCC v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74 [32].

[6] Ibid. [33].

[7] The Trade Pactices Act 1974 (Cth) has been superceded by the Competition and Consumer Act 2010 (Cth) but the obligations remain the same.

review of the process of the Convergence Review 2011

The Federal government’s Convergence Review is getting underway.  The review does not involve a review of the National Broadband Network (NBN) legislation or the implementation of the NBN business plan to roll out the nation-wide high speed broadband network; with the support of the independent members the NBN legislation passing through the Federal parliament at the end of March so that political controversy is over;[1]  at least for a short time until the renewed public attention of the NBN when the termination of the construction tender hit the headlines this week.[2]

The Convergence Review also avoids the controversial topic of sporting rights – as the anti-siphoning list for sports was reviewed in 2010 to determine which AFL or NRL games get broadcast on free-to-air television and which games the pay TV platforms can bid for exclusive transmission rights.[3]  The terms of reference also narrow the scope of the review to delivery media and content issues and not to the regulatory environment for data and voice telephone services.[4]

The Federal government has directed to Australian Law Reform Commission (ALRC) to review the National Classification System to address emerging technologies.[5]  So that the Convergence Review is likely to pick up the ALRC recommendations as to the content of audience classifications for material, with the Review limited to covering the ‘take down’ notice procedures of Schedule 7 of the Broadcasting Services Act 1992 (Cth), which provides a scheme for dealing with prohibited content on the internet.  That was controversial at the time the ‘take down’ notice procedures were being developed, although the Internet Service Providers (ISPs) seem content with the  ‘light-touch’ approach to regulating prohibited content that exists in the current’ take-down’ notice system. 

Senator Stephen Conroy, the minister responsible for the Department of Broadband, Communications and the Digital Economy (DBCDE) has appointed two members of the Convergence Review Committee (Glen Boreham as chairman and Malcolm Long).  A third member is to be appointed - my guess is someone with extensive experience with telecommunications and/or cable television systems.

The members of the Committee have expertise that covers computers & IT, broadcast regulation & content creation; with Glen Boreham being the former managing director of IBM Australia and current chairman of Screen Australia; and Malcolm Long having experience in broadcast regulation at the Australian Communications and Media Authority and experience of subscription television channel management as well as content creation at the Australian Film Television and Radio School.

The Convergence Review Terms of Reference direct the Committee to review the operation of media and communications regulation in Australia so as to advise on the effectiveness of the regulatory regime in the convergent era. The Committee are to consider the operation of the Broadcasting Services Act 1992, the Radiocommunications Act 1992 and the Telecommunications Act 1997, particularly as they relate to the regulation of content and converging content delivery platforms.[6]

The process of convergence is recognised as an ongoing process that impacts on the operators of the ‘pipelines’ through which data is delivered and the suppliers of the data (the ‘content’ being delivered via the pipelines) and the consumers of the content. The Convergence Review is directed to the regulatory environment for all forms of digital content including internet content delivered to consumers via broadband and wireless and delivery to all forms of digital devices including computers, internet enable television sets, mobile phones and other hand held digital devices.

The convergence of different communication technologies results in what were separate delivery systems for Internet, telephone calls and audiovisual programming being delivered on common telecommunications networks designed to carry any form of digital data. This triple play service is evolving into the so-called quadruple play service that integrates mobile phones and WiFi devices.  The Convergence Review is asked to determining “how best to manage the provision of media and communications services in this new environment.”[7]

The Committee will address what are potentially contentious areas of regulation of audiovisual services.  The existing free-to-air and pay television services are facing new TV-like services such as IPTV, internet TV and video on demand, all of which emerging services compete with traditional free-to-air and pay TV services for viewers.  The treatment of advertising controls, programming classification and Australian content obligations that are directed to “the development of national and cultural identity” are likely to see the existing players arguing for positions that achieve a ‘level’ regulatory playing field across the different media technologies that can deliver TV or TV-like services.[8]

Both existing media players and emerging players will be focused on arguing for what they see as a conducive competitive environment for each play or industry sector.[9]

Hard on the heels of getting the NBN legislation through the parliament the Federal government have given advance notice of the release of a National Digital Economy Strategy, which is intended to enable Australia firms to leverage the National Broadband Network (NBN) infrastructure so that Australia will become a world leading digital economy by 2020. The National Digital Economy Strategy is to be released at the end of May 2011.[10]

The DBCDE Convergence Background Paper (2010) describes the opportunities that brave new world of a convergent environment that will emerge with the continuing switch to digital-only television and the future rollout of the National Broadband Network.[11]

The Convergence Review formally commenced on 2 March 2011 with the opportunity for public submissions to be delivered the Committee in 2011.

Further information is available at the DBCDE website http://www.dbcde.gov.au/digital_economy/convergence_review#submissions

 

Twitter @DBCDEgov

Review secretariat - Tel: 02 6271 1255

convergence@dbcde.gov.au

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[1] The National Broadband Network Companies Bill 2010 and the Telecommunications Legislation Amendments (National Broadband Network Measures—Access Arrangements) Bill 2011 were by House of Representatives and the Senate on 28 March 2011. Media Release 28 March 2011 http://www.minister.dbcde.gov.au/media/media_releases/2011/152

[2] Alan Kohler, The secret circuits of NBN Co (4 April 2011 ) http://www.businessspectator.com.au/bs.nsf/Article/TLS-Telstra-NBN-Siemens-Leighton-Silcar-Conroy-Qui-pd20110404-FKT73?OpenDocument&emcontent_Kohler

[3] http://www.dbcde.gov.au/television/antisiphoning_and_antihoarding/sport_on_television_review_of_the_antisiphoning_scheme

[4] http://www.dbcde.gov.au/digital_economy/convergence_review/questions_and_answers

[5] http://www.alrc.gov.au/inquiries/national-classification-review

[6] http://www.dbcde.gov.au/digital_economy/convergence_review/convergence_review_terms_of_reference

[7] http://www.dbcde.gov.au/digital_economy/convergence_review/questions_and_answers

[8]  The Terms of Reference in paragraph 5 b. refer to “ensuring the ongoing production and distribution of local and Australian content that reflects and contributes to the development of national and cultural identity” http://www.dbcde.gov.au/digital_economy/convergence_review/convergence_review_terms_of_reference

[9] The Terms of Reference in paragraph 5 a. refer to “the development and maintenance of a diverse, innovative, efficient and effective communications and media market that operates within an appropriately competitive environment and in the best interest of the Australian public” http://www.dbcde.gov.au/digital_economy/convergence_review/convergence_review_terms_of_reference

[10] Media Release 29 March 2011 http://www.minister.dbcde.gov.au/media/media_releases/2011/151

[11] http://www.dbcde.gov.au/__data/assets/pdf_file/0004/131665/Convergence_Review_Background_Paper_revised_1_March_11-final_.pdf