Reforming Free-to-Air Broadcasting in Australia

Abstract

The Australian model of free-to-air (FTA) broadcasting is stuck in the 1950s. This paper reviews the existing Australian approach to FTA broadcasting which provides incumbent networks with complete control over the available spectrum albeit tied down by a range of regulatory constraints. We argue for reform that would split current commercial broadcasting licenses in two, separating ownership of the spectrum (the 'multiplex') from broadcasting. Three commercial multiplex licenses would be auctioned and the successful bidders would either be able to use them for their own broadcasting and/or 'sublet' spectrum to other broadcasters.

The public service obligations on commercial broadcasters would largely be eliminated, assisting new entry. These obligations would revert to the two government-owned broadcasters, the ABC and the SBS. The government-owned broadcasters would not need to bid for their multiplexes. They would, however, receive the revenue raised by the spectrum auctions and also be allowed to sublet their spectrum. These sources of revenue would ensure the long-term viability of the ABC and the SBS.

Our suggested reforms are similar to existing practice in the UK. We believe that these reforms will increase viewer choice, promote more efficient use of the spectrum, and create both stable funding and a long-term role for the government-owned broadcasters.

Keywords: free-to-air television, spectrum management, broadcasting reform

JEL Classification: H40, K20, L82