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Published online by Cambridge University Press: 24 January 2025
During 1999 and 2000 considerable attention was focused on an inquiry conducted by the broadcasting regulator, the Australian Broadcasting Authority (‘ABA’), into the commercial arrangements of a number of commercial radio presenters associated with talkback radio. In May 1999, an Australian Broadcasting Corporation (‘ABC’) program, Media Watch, alleged that, John Laws, a presenter with Sydney Radio Station 2UE, had financial arrangements in place with an organisation representing the major Australian banks, the Australian Bankers' Association. It was alleged that the effect of these arrangements was that Laws would broadcast positive comments about the banks. These comments were independent of any paid advertising run by the station for the banks or the Bankers' Association. Following the Media Watch revelations, the ABA announced that it would conduct an inquiry into the allegations in order to determine whether there had been any breach of the Broadcasting Services Act 1992 (Cth) (‘BSA’) or the licence conditions or codes of practice to which Radio 2UE was subject.
1 Referred to as 'the Inquiry', 'the Radio Inquiry' or 'the Commercial Radio Inquiry'.
2 In early 2002, Alan Jones moved to another Sydney radio station 2GB.
3 Australian Broadcasting Authority, Commercial Radio Inquiry: Final Report of the Australian Broadcasting Authority (August 2000) ('Final Report'). The ABA had already published reports at the end of the investigations of each of the radio stations: Australian Broadcasting Authority, Commercial Radio Inquiry: Report of the Australian Broadcasting Authority Hearing into Radio 2UE Sydney Pty Ltd (February 2000) ('2UE Report'); Australian Broadcasting Authority, Commercial Radio Inquiry: Report of the Australian Broadcasting Authority Investigations into 3AW Melbourne, 5DN Adelaide and 6PR Perth (August 2000).
4 Australian Broadcasting Authority, Annual Report 2000-2001 (2001) 10.
5 ABC Television, 'ABA “Active Monitoring"', Media Watch, 28 October 2002 <http://www.abc.net.au/mediawatch/transcripts/281002_s2.htm> at 19 January 2003. Media Watch has also alleged that John Laws has failed onoccasions to disclose his commercial relationship with NRMA Insurance Ltd when commenting on that company: ABC Television, 'Laws & NRMA Insurance', Media Watch, 28 October 2002 <http://www.abc.net.au/mediawatch/transcripts/281002_s3.htm> at 19 January 2003. The ABA did not announce a formal investigation into this matter but Radio Station 2UE later admitted that there had been on three occasions a failure to disclose the commercial relationship between Laws and NRMA Insurance: Australian Broadcasting Authority, Investigation into Radio 2UE Sydney Pty Ltd -Sponsorship of Mr John Laws by Telstra Corporation Ltd and NRMA Insurance Ltd, Investigation Report (November 2003) 38.
6 Australian Broadcasting Authority, 'ABA Investigation into Telstra Commercial Arrangements' (Press Release, NR 131/2002, 11 November 2002). The ABA found that the licensee of Radio Station 2UE had breached the program standards and licence condition which had been imposed as a result of the Radio Inquiry in relation to the commercial arrangements between Telstra and John Laws. The ABA announced that it would refer the matter to the Director of Public Prosecutions and impose a new licence condition requiring Radio Station 2UE to engage an independent third party to monitor the John Laws program: Australian Broadcasting Authority, 'ABA to refer 2UE Breaches of Disclosure Standard to DPP' (Press Release, 4 December 2003). However, since that announcement, it appears no further action has been taken: ABC Television, 'Laws and Chutzpah', Media Watch, 8 March 2004 <http://www.abc.net.au/mediawatch/transcripts/s1061409.htm> at 3 April 2004.
7 Australian Broadcasting Authority, Terms of Reference for Investigation by the ABA into the Disclosure of Commercial Agreements involving Telstra Corporation Limited, 7 November 2002. It should be noted that there is apparently no direct contractual relationship between Alan Jones and Telstra. However Telstra does have a commercial arrangement with Radio Station 2GB and Alan Jones, through a family company, has an equity interest in the company which controls Radio Station 2GB (and another Sydney radio station 2CH). In April 2004 the ABA announced that it had found no breaches of the program standards in relation to Telstra's commercial agreement with Radio Station 2GB. Inter alia, the ABA found that Jones was under no obligation to disclose this commercial arrangement because he was not a party to the agreement: Australian Broadcasting Authority, 'ABA finds no breaches in Telstra sponsorship of the Alan Jones Program on 2GB Sydney' (Press Release, 5 April 2004). The decision has occasioned considerable criticism: ABC Television, 'Does the ABA have the ticker', Media Watch, 19 April 2004 <http://www.abc.net.au/mediawatch/transcripts/s1090576.htm> at 22 April 2004.
8 BSA s 14.
9 BSA s 4(1).
10 For a discussion of the concept of influence and its role in broadcasting legislation, see Productivity Commission, Broadcasting, Report No. 11 (2000) ('PC Report') 447-9. The PC Report is the outcome of a comprehensive inquiry into broadcasting conducted in 1999-2000. Despite its extensive recommendations, the Government has made no substantive response to the Report.
11 The ABA is empowered under s 43 (with respect to commercial broadcasting services) to impose additional licence conditions upon a licensee. Some guidance as to the scope of this power is given under s 44. (Equivalent powers apply to other licensed services.) One outcome of the Radio Inquiry was the imposition of two new conditions on Radio 2UE relating to disclosure of commercial agreements and the separation of program and advertising matter.
12 BSA s 147.
13 BSA s 139. However, only sch 2 conditions fall within s 139. Breach of conditions imposed by the ABA (additional conditions) only empowers the ABA to issue a notice directing compliance (s 141), breach of which constitutes an offence. Breach of all licence conditions can result in suspension or cancellation of the licence: BSA s 143.
14 BSA s 123.
15 BSA s 123(2)(d).
16 The commercial television code, Commercial Television Industry Code of Practice (April 1999) ('Television Code') has been developed by the industry body, Commercial Television Australia Ltd ('CTVA') (formerly known as the Federation of Australian Commercial Television Stations ('FACTS')) and the commercial radio code, Commercial Radio Codes of Practice and Guidelines (October 1999) ('Radio Codes') has been developed by the industry body for radio, Commercial Radio Australia Limited ('CRA') (formerly known as the Federation of Australian Radio Broadcasters Limited ('FARB')).
17 PC Report, above n 10, 450-1.
18 BSA s 148.
19 Under BSA s 44 for commercial radio and television broadcasting services.
20 BSA s 125.
21 BSA pt 13, divs 2 and 3.
22 BSA s 158.
23 For a detailed account of the Radio Inquiry and the background to it, see Johnson, Rob, Cash for Comment: The Seduction of Journo Culture (2000)Google Scholar.
24 Final Report, above n 3, 14.
25 Ibid.
26 Ibid.
27 Ibid.
28 The ABA similarly examined commercial agreements of the presenters of the other radio stations under investigation.
29 2UE Report, above n 3, 33.
31 Ibid 32.
32 Ibid.
33 Ibid 33.
34 Ibid 34: fax from Mr Stephen Woodhill, National Media Manager, Optus to Mr James Thane, Harry M Miller & Company Management dated 24 March 1999.
35 Ibid.
36 Ibid.
37 Ibid.
38 See, eg, the 2UE Report, above n 3, 38, in connection with the Optus commercial agreement and at 41 in connection with the Walsh Bay Finance commercial agreement. These mentions would still usually follow the scripts or talking points provided by the commercial interest.
39 Agreement with Australian Trucking Association (formerly the Road Transport Forum),ibid 54.
40 Agreement with Star City. This obligation was subject to Laws being satisfied that the matter for comment was entertaining or newsworthy, ibid 62.
41 Agreement with the Australian Bankers' Association, ibid 49.
42 Ibid 47.
43 Ibid 152.
44 Ibid.
45 Ibid 138-9.
46 Ibid (emphasis in original).
47 Ibid 314-15. As part of the arrangements Laws even received a memo entitled 'Script for Unscripted Call to Laws'.
48 Ibid 51.
49 See ibid 319-34 for these and other examples.
50 Ibid 139. The arrangements between Laws and the Bankers' Association also appeared to require Laws to cease making negative comments about the banks when doing live reads for RAMS Home Loans Pty Ltd. However, both Laws and a director of RAMS gave evidence that RAMShad intended to reduce criticism of the banks: at 139-40.
51 Final Report, above n 3, 17 quoting from the superseded Australian Broadcasting Tribunal Radio Program Standard 8.
52 Ibid.
53 Ibid 18.
54 Ibid.
55 Ibid 44. Many of the comments made by the radio presenters actually came from material supplied by the commercial interests.
56 Ibid.
57 2UE Report, above n 3, 25-6.
58 'Political matter' is defined in cl 1, but somewhat tautologically: 'political matter means any political matter, including the policy launch of a political party.' The ABA has guidelines which further explain this concept: Australian Broadcasting Authority, Guidelines for the Broadcasting of Political Matter (1998).
59 Above n 3, 81-9. In relation to four broadcasts made on behalf of the Registered Clubs Association, the ABA was unable to determine finally whether the BSA had been breached because of the lack of a complete transcript, although it was apparent from the summaries available for each of these broadcasts that no required particulars had been given. Whilst the ABA considered that there had been non-compliance it was unwilling to proceed to a determination without access to a transcript: 2UE Report: at 82-6. The lack of transcripts was due to the age of the broadcasts.
60 Ibid 82, 86-9.
61 Ibid 86-8.
62 Final Report, above n 3, 56.
63 Ibid.
64 See generally, 2UE Report, above n 3, schs 13 and 14.
65 Ibid 354-6.
66 See section titled, 'Regulatory Framework'.
67 Australian Broadcasting Authority, 'ABA Imposes Conditions on 2UE Licence' (Press Release, 21 March 2000).
68 Final Report, above n 3, 5.
69 See text at nn 3-7.
70 Australian Broadcasting Authority, 'Extension of Commercial Radio Standards' (Press Release, NR 3/2003, 3 February 2003).
71 Ibid.
72 Final Report, above n 3, 89.
73 Eric Barendt, Broadcasting Law: A Comparative Study (1993) 34 and, see generally, ch 2. It is accepted that freedom of communication will involve the freedom to access other types of programming, eg, entertainment. However, for the purposes of this discussion the focus is on freedom to access information.
74 Of course this begs the question as to why there should be differential regulatory treatment of broadcasting and the press. The reasons for this differential treatment have been well- rehearsed in the academic literature, although not satisfactorily resolved: see, eg, Barendt, above n 73, 3-10. Whether the different treatment can be adequately justified, the fact remains that broadcasting is subject to specific regulation. Indeed the question to be addressed may be why the press is not regulated more closely. For an excellent discussion of this withinthe American context see Judith Lichtenberg, 'Foundations and Limits of Freedom of the Press' in Judith Lichtenberg (ed), Democracy and the Mass Media (1990) 102-35.
75 Commonwealth, Parliamentary Debates, Senate, 4 June 1992, 3599 (Robert Collins, Minister for Transport and Communications).
76 Explanatory Memorandum, Broadcasting Services Bill 1992 (Cth) 10.
77 See Habermas, Jürgen, The Structural Transformation of the Public Sphere: An Inquiry into a Category of Bourgeois Society (1989)Google Scholar; Jürgen Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy (1996), especially ch 8. Habermas' notion of the 'public sphere' has been the subject of much debate but it has nevertheless had a strong influence in discussions on the justification of media regulation. If free and informed public discourse is seen as essential to the democratic process, then the structure of media and its place in that discourse cannot be ignored. For a useful discussion of the tension between the normative principles of the 'public sphere' and its historical concrete elements, and a review of the criticisms of Habermas' theory see Dahlgren, Peter, Television and the Public Sphere: Citizenship, Democracy and the Media (1995) 7-11Google Scholar and generally. See also Garnham, Nicholas, 'The Media and the Public Sphere' in Golding, Peter et al (eds), Communicating Politics: Mass Communications and the Political Process (1986) 37Google Scholar; Jean L Cohen, 'The Public Sphere, the Media and Civil Society' in András Sajó and Monroe E Price (eds), Rights of Access to the Media (1996) 29. These issues are discussed also by Monroe E Price, Television, The Public Sphere, and National Identity (1995) 24-8.
78 Price, above n 77, 27.
79 Ibid 28, in turn quoting from Cohen, Jean L, 'The Public Sphere, the Media and Civil Society' in Sajó, András Price, Monroe E (eds), Rights of Access to the Media (1996) 29Google Scholar.
80 A recent exception to this is the decision of the ABA to impose a licence condition on several regional commercial televisionlicensees requiring them to broadcast material of local significance to each local area within their licence areas.
81 Hoffmann-Riem, Wolfgang, Regulating Media: The Licensing and Supervision of Broadcasting in Six Countries (1996) 283Google Scholar and see generally 283-4.
82 Of course this only truly applies with respect to the ABC. The Special Broadcasting Service (SBS) relies in part for its funding on advertising and sponsorship.
83 Apart from financing, other factors may also be relevant such as the degree of independence the public broadcaster is allowed.
84 Price, above n 77, 24.
85 The UK regime is undergoing substantial reform. In July 2003, the Communications Act 2003 (UK) c 21 became law. The relevant regulatory bodies, including the Independent Television Commission and the Radio Authority will be replaced by a new regulator at the end of 2003, the Office of Communications (Ofcom). New program codes will be developed although for the meantime existing codes will continue. It is likely that there will be a move from the existing close regulatory scrutiny to greater reliance on industry regulation, although Ofcom will have statutory enforcement powers. It is open whether the degree of detail in current programme regulation will remain. However, many of the UK rules are required under European Community law and therefore it is unlikely that the UK with its tradition of detailed program regulation and its EC obligations will abandon completely its current approach.
86 Graham, Andrew, 'Public Policy Issues for UK Broadcasting' in Barnett, Steven et al (eds), E- Britannia: The Communications Revolution (2000) 93, 94Google Scholar.
87 Ibid 93-9 and generally.
88 PC Report, above n 10, 451.
89 Ibid.
90 There is no fixed understanding of 'co-regulation'. Both co-regulation and self-regulation can have different meanings: see Baldwin, Robert and Cave, Martin, Understanding Regulation: Theory, Strategy, and Practice (1999) 133 and, generally, ch 10Google Scholar. See also Robert Baldwin, Colin Scott and Christopher Hood (eds), A Reader on Regulation (1998) 27-8.
91 Obviously, the Radio Inquiry was only concerned with commercial radio's codes of practice but the codes which have been developed for other industry sectors do not differ significantly in this regard.
92 PC Report, above n 10, 453. A Senate Inquiry into Communications self-regulation also referred to criticisms of the lack of pro-active monitoring and enforcement in relation to television: Senate Select Committee on Information Technologies, Commonwealth Parliament, In the Public Interest: Monitoring Australia's Media (2000) [3.60].
93 An exception to this would seem to be the ABA's recent investigation into the broadcasting of matters of local significance. This arose as a result of several commercial television licensees closing their local news bureaux: Australian Broadcasting Authority, 'ABA Requires Increased Broadcast Material of Local Significance', (Press Release, NR 152/2002, 17 December 2002).
94 PC Report, above n 10, 453.
95 But, as the Productivity Commission noted, has seldom been used: ibid.
96 BSA s 148.
97 Final Report, above n 3, 101-6.
98 PC Report, above n 10, 453.
99 Final Report, above n 3, 101-6 and PC Report, above n 10, 477-9.
100 See BSA ss 47 and 41(2) in relation to commercial radio and television licensees. Similar provisions apply to categories of broadcasting services which hold individual licences. Class licences (applicable to narrowcasting services and subscription radio broadcasting services) continue indefinitely.
101 Final Report, above n 3, 74-8.
102 The Communications Law Centre, in a submission to the Inquiry, also suggested that the lack of detail in the Codes may have contributed to the indifference to the ethical standards of the Codes: Communications Law Centre, Submission on the Final Report of the Australian Broadcasting Authority Commercial Radio Inquiry (September 2000) [2.1.1].
103 PC Report, above n 10, 458.
104 Ibid 460-1.
105 Community broadcasting services are allowed to broadcast sponsorship announcements but not advertisements: BSA sch 2, cl 9(1)(b). Subscription broadcasting services and subscription narrowcasting services are allowed to raise advertising revenue, but subscription income has to be the predominant source of revenue: BSA sch 2, cls 10(2) and 11(2) respectively. The public broadcaster, the Special Broadcasting Service, is allowed limited advertising and sponsorship: Special Broadcasting Service Act 1991 (Cth) s 45.
106 Some advertisers may be more interested in small audiences which may represent particular interest or income groups, but as the Productivity Commission points out commercial media operators 'have to seek a balance between the cost and revenue generated from targeting smaller niche audiences and those generated from attracting large, more diffuse audiences.': PC Report, above n 10, 136.
107 United Kingdom, Report of the Committee on Financing the BBC, Cmnd 9824 (1986) [421]. See also the PC Report, above n 10, 94 for similar observations.
108 Congdon, Tim et al, Paying for Broadcasting: The Handbook (1992) 189Google Scholar.
109 Hoffmann-Riem, above n 81, 46. Although Hoffmann-Riem's analysis suggests that there is no continuing role for regulation in the US media context, there is ongoing debate about the role of media regulation and the maintenance of the public sphere. See, eg, Monroe E Price, 'An Access Taxonomy' in Sajó and Price, above n 77, 1, 22-6 and generally; Cass R Sunstein, 'Television and the Public Interest' (2000) 88 California Law Review 499, 504 and generally.
110 Television Code cl 5.1.
111 Radio Codes, Code of Practice 3: Advertising.
112 Ibid cl 3.2. Even this is quite generous: 'the licensee … must not broadcast more than 18 minutes of advertisements in a period of an hour.'
113 PC Report, above n 10, 140.
114 For example, there is scope under cl 5.7 for a broadcaster to increase the amount of advertising to 15 minutes per hour between 6pm and midnight, provided that the average is maintained and certain other limits are met.
115 Television Code cl 5.5.4. To be exempt from the scheduling rules, it must also omit reference to the price of goods or services and it must be clear to the viewer that there is a sponsorship arrangement between the sponsor and the program.
116 Bureau of Transport and Communications Economics, Economic Aspects of Broadcasting Regulation,Report No 71 (1991) 103.
117 Independent Television Commission, Rules on Amount and Scheduling of Advertising (December 1998) rule 3.2(viii).
118 Independent Television Commission, Code of Programme Sponsorship (Autumn 2000) rules 8.1 and 8.2. Sponsorship of radio news bulletins and 'any news desk presentation' are also proscribed: Radio Authority, Advertising and Sponsorship Code (December 2000) rule 3.8(a).
119 PC Report, above n 10, 137.
120 Independent Television Commission, Advertising Standards Code (September 2002) rule 2.1.2.
121 Eric Barendt and Lesley Hitchens, Media Law: Cases and Materials (2000) 225.
122 See text at n 44.
123 ABC Television, 'Advertising Gets Integrated', Media Watch, 2 September 2002 <http://www.abc.net.au/mediawatch/transcripts/020902_s2.htm> at 19 January 2003.
124 Ibid.
125 Ibid.
126 Ibid.
127 Ibid.
128 Whilst noting in its submission to the Radio Inquiry that no specific allegations had been made about commercial television,the Communications Law Centre observed: 'it is clear that many of the same commercial pressures are alive in … [the television] industry and that it is a similarly influential medium. … Most importantly, the public should not have to wait for programs like “MediaWatch” to uncover deception … before appropriate standards are imposed': Communications Law Centre, above n 102, [4.5].
129 PC Report, above n 10, 457.
130 Centre for New Media Research and Education, Bond University, Sources of News and Current Affairs (May 2001) ('Bond Report').
131 Ibid 7.
132 Ibid 9. See also at 90-117.
133 Ibid 9 and 116.
134 Ibid 48.
135 Ibid 205-6. See also at 57 and 107–9. The Bond Report also noted that 60 Minutes, which many of those interviewed put into the category of 'tabloid current affairs', commanded the highest advertising rates for regularly programmed commercial television: 108.
136 Ibid 48.
137 Ibid 208-9.
138 Peter Collingwood, Commercial Radio since the Cross-Media Revolution (1997) 16, cited in Bond Report, above n 130, 163. See generally Bond Report, above n 130, 162-70.
139 Bond Report, above n 130, 330, 335 and 351.
140 Ibid 378.
141 Ibid.
142 Ibid 107.
143 As already described, the Bond Report shows that listeners and viewers whilst using these services may not be completely satisfied with them.
144 Research published in the UK recently has shown that television viewers regard news as the most important program genre, both personally and as an element of public service broadcasting: Independent Television Commission and Broadcasting Standards Commission, 'Viewers Say News is the Public Service Priority, According to ITC and BSC Research' (Press Release, 12 March 2003).
145 PC Report, above n 10, 461.
146 See, eg, the text at nn 116-18 describing the UK approach which differentiates between programs in structuring advertising and sponsorship regulation. But, as argued in this article, such a measure alone would not be sufficient; the regulatory process must also be addressed.
147 Bond Report, above n 130, 378-9.
148 See David Dale, 'Calling Ray: it's time for Nine to get serious', Sydney Morning Herald (Sydney), 26 January 2003, 3; and 'Munro's Affair Over', Sydney Morning Herald (Sydney), 25-6 January 2003, 6.
149 See also generally Price, above n 77.