Convergence Review’s thankless task

Running a Convergence Review must rate highly on the global scale of thankless tasks. The challenge of trying to create a single regulatory framework to govern the Australian telecommunications, broadcasting and digital content sectors is fiendishly complex and made even harder by the fact that the whole shooting match is moving and changing on a near-daily basis.

Add to that the delights of impassioned players and lobbyists - with friends in high places - all determined to generate a particular outcome and you have a recipe for chaos.

To its credit, the Australian Convergence Review Panel - former IBM Australia Chief Glen Boreham, ex-SBS MD Malcolm Long and Louise McElvogue - has worked hard to maintain a culture of wide and transparent consultation throughout its work over the past 18 months.

Now we are getting to the pointy end, with the recommendation contained in the panel’s interim report proving controversial and divisive while the panel works on its final report, due to be presented to Communications Minister Stephen Conroy by late March.

Internet players and fledgling digital content providers are rightly concerned that the proposal to expand Australian content requirements to cover new digital platforms will undermine the growth of the Australian digital economy, place Australian online content businesses at an international disadvantage and potentially deter the supply of some sources of content to Australian consumers.

The Interim Report’s proposal to capture new, non-traditional generators of digital content under the newly created banner of Content Service Enterprises (CSEs) and to make them subject to Australian content regulation risks impeding the tremendous growth of Australian online content.

One wonders whether the outrageously successful Queensland online game creator Halfbrick Studios (think Fruit Ninja ...) would have flourished in Australia if it were subject to the same Australian content requirement as the Nine Network.

The beauty of the digital economy is the explosion of new content types and sources it engenders. Ironically, some of the government’s Australian content policy objectives are being achieved for it by unregulated people doing interesting things on the web and sharing them with the world.

Another complication for this recommendation is that Australia’s newspaper- and magazine-based companies, for example, are becoming major generators of digital content - will they be CSEs and, if so, what are the ‘freedom of the press’ implications?

Equally unpopular, so far, is the recommendation to create a new ‘super regulator’ for the digital economy with sweeping new rule-making powers. The panel probably erred in tossing this idea into the public domain before being able to describe the proposal in detail - there’s nothing easier to object to than a poorly defined regulator in a proposal the seems to run counter to the Review’s stated ambition of reducing regulation.

There are, however, some very positive elements to the interim report - most telco players strongly support the proposed move to a market-based pricing approach to spectrum allocation. The next five years will be full of tough decisions around how to make the best use of finite spectrum resources. This will likely including the task of trying to persuade the Department of Defence to make do with less spectrum - while searching for additional spectrum to meet the burgeoning demand for mobile data services.

Market-based pricing for spectrum will help provide an economically rational way to attack what will nonetheless be difficult challenges.