14. The Regulator
14.20 The ALRC’s recommendation for a single regulator is a central element of the new National Classification Scheme, and arises as a consequence of regulating the classification of films, television, publications, computer games and online media content under a framework that can be more flexible and adaptive in the context of media convergence.
14.21 Combining a range of functions currently performed by the Classification Board, the AGD, the DBCDE and the ACMA in a single regulator should contribute to a more administratively streamlined scheme. A single regulator, that incorporates classification and media content regulation within a wider portfolio of responsibilities, may be more responsive to the challenges of media convergence than a framework where similar functions are separated on a platform-related basis.
14.22 As discussed in Chapter 1, in the ALRC’s view, the net economic effects of a single regulator and greater industry responsibility for classification would generate significant short-term and medium-term benefits. However, the likely impact on government revenues and expenditures of the establishment of the Regulator is dependent on a number of factors. These include the extent to which the activities of the Regulator are already budget-funded, as part of existing appropriations—for example, of the ACMA. There may also be opportunities for cost recovery in relation to some activities, such as classification decision-making by the Classification Board, the maintenance of the classification decisions database, the approval of industry codes and the provision of training for industry classifiers.
14.23 Stakeholders called for a single regulator under the new National Classification Scheme and generally for measures to reduce the administrative complexity of current arrangements. The ACMA, for example, stated that a single regulator would be:
- Better for citizens: a single approach to the application of community standards and protections within the new scheme.
- Better for the consumer: a one stop shop with less chance of being given ‘the run-around’.
- Better for industry: superior, faster decision-making with increased expertise and a consistent approach.
- Better for Government: cost savings from economies of scale.
- More logical: converging platforms will incontrovertibly require a converged regulator.
14.24 The ACMA noted that many issues in communications and media regulation are ‘inherently inter-dependent and inter-connected’. Areas where broader communications and media regulation is likely to intersect with content classification and regulation under the ALRC model include:
- the handling of complaints, investigations and relevant enforcement functions;
- promoting the development of industry codes and approving and maintaining registers of such codes;
- liaison and interaction with relevant Australian and overseas media content regulators and law enforcement agencies in the areas of online content regulation, cyber-safety and cyber-security; and
- educational activities in the digital environment.
14.25 The ACMA referred to the ALRC’s proposal to provide for the development of industry classification codes, and noted the benefits of ensuring that these codes ‘dovetail with the various existing television and online code regimes which cover both classification matters and other broader areas’ and are administered by the ACMA.
14.26 Foxtel also cautioned the ALRC against ‘recommending a scheme under which classification codes would be developed separately to codes for other broadcasting matters, and which would be registered by different regulators’ and any scheme under which classification codes would be governed by the new classification regulator and non-classification matters regulated by the ACMA under the Broadcasting Services Act.
14.27 The Australian Subscription Television and Radio Association considered that the Regulator should be part of the ACMA because
consumers unsatisfied with a broadcaster’s response to a content-related complaint would have to go to a different regulator depending on the type of content that is the subject of the complaint, and this is likely to create unnecessary confusion.
14.28 The ABC and SBC also expressed support for the Regulator forming one part of the ACMA. The Internet Industry Association expressed concern about ‘a splitting of regulatory responsibility between the ACMA and a new regulator’ if it would require content providers to deal with both.
14.29 Other stakeholders suggested that, rather than merging the functions of the Regulator with those of the ACMA, the Regulator should be within the Attorney-General’s portfolio responsibilities. John Dickie, for example, stated that:
In my view there is a much better chance of the Regulator retaining independence if the issues involved in the new regime are recognised primarily in the area of human rights and civil liberties which have always been the responsibility of the Attorney-General.
14.30 Many of the Regulator’s recommended powers and functions—approving industry classification codes, issuing industry standards, issuing notices with respect to online content and so on—are similar to those currently performed by the ACMA under the Broadcasting Services Act. In addition, under the ALRC model, the Regulator will be responsible for determining matters such as:
- whether particular content has a significant Australian audience;
- what content must be classified by the Classification Board—having regard to matters including the need for benchmarks for popular or new types of media content, and the classification of similar content in other jurisdictions;
- how content providers should mark different types of classified content— depending on the type of content provider and the platform or delivery method; and
- what reasonable steps content providers should take to restrict access to adult content—again, depending on the type of content provider and the platform or delivery method.
14.31 These roles require the Regulator to have an intimate knowledge of the communications and media market and technical capabilities in relation to, for example, parental locks on televisions and media devices, internet filters and online age verification systems.
14.32 More fundamentally, the ALRC does not intend to add new layers of regulation to existing ones. The media content industries should not have to deal with a separate regulator in relation to classification, as well as with the ACMA in relation to other matters of content regulation. Arguably, the functions of the Regulator under the Classification of Media Content Act should be brought together with other aspects of wider media content regulation.
14.33 The Discussion Paper suggested that the proposed Regulator might form one part of the ACMA with its broader responsibilities for the regulation of broadcasting, the internet, radio-communications and telecommunications.
14.34 As discussed above, while the ACMA is a statutory agency within the portfolio of the Minister for Broadband, Communications and the Digital Economy, the AGD is responsible for dealing with classification matters and for administering the Classification Act.
14.35 In considering policy responsibilities for content classification regulation, one question that arises is whether classification—including the powers and functions of the Regulator—is fundamentally a matter of communications or legal policy.
14.36 Classification decision making—that is, the making of classification decisions according to statutory classification criteria—can be conceived of as a matter of legal policy much like, for example, copyright. Like the subsistence of copyright, a classification decision may have consequences for the owner of media content in terms of legal rights to sell and distribute that content, and for the financial value of the content. Further, classification decision making that results in content being banned or restricted has consequences under the criminal law and raises human rights implications in terms of freedom of speech and political communication and protecting certain groups of people, such as children, from harm—in which case, some might argue that it may be appropriate for the Regulator to be within the Attorney-General’s portfolio.
14.37 In the ALRC’s view, however, the recommended new scheme is best characterised as one element of broader media content regulation. Ultimately, it will be the role of Government to design the final form of such a convergent media content regulator.
A convergent regulator
14.38 In the ALRC’s view, there are likely to be advantages in having one regulator responsible for all forms of media content regulation, whether or not regulation is related to classification matters. These benefits are likely to increase significantly in the context of media convergence, discussed in Chapter 3.
14.39 Under the current media content regulatory framework, the ACMA regulates Australian content (including Australian content in advertising) and children’s program content on television under compulsory standards, as well as being responsible for the regulation of television and online content under the Broadcasting Services Act.
14.40 The ACMA also deals with licence conditions regulating matters such as: tobacco and therapeutic goods advertisements; sponsorship announcements on community television; the broadcast of political matter; the ‘anti-siphoning’ scheme; and standards prohibiting the broadcast of programs that encourage people to join or finance terrorist organisations. As noted above, it also has responsibilities in relation to cyber-safety, cyber-security, and educational initiatives in the digital environment.
14.41 The development of convergent regulators has been occurring worldwide during the 2000s. The ACMA was established in 2005 as a convergent regulator—that is, dealing with broadcasting, telecommunications and radio-communications matters that had previously been undertaken in separate Australian government agencies.
14.42 Convergent regulators in other jurisdictions include the Office of Communications (Ofcom) in the United Kingdom and the Media Development Authority (MDA) in Singapore. The International Telecommunications Union has observed that ‘a more consistent approach can be taken within the [single] regulatory authority as it adapts to changing technologies’, and that a single regulator ‘resolve[s] some of the overlap of regulatory functions and bring[s] down the cost of overall regulation’.
14.43 In some instances, convergent regulators deal with matters relating to media delivery technologies and media content, but not with classification. For example, while Ofcom deals with both media carriage and content, films and DVDs must still be classified by the British Board of Film Classification before public release. Convergent media regulators in other jurisdictions do deal with classification as part of media content regulations more broadly. In Singapore, the Singapore Board of Film Censors is a division of the MDA, and classification is a part of broader media content regulation.
14.44 In its interim report, the Convergence Review recommended that a new independent regulator for content and communications be established in Australia. This regulator would ‘operate at arm’s-length from government and industry, with the capacity to address technical, social and economic issues’. The Convergence Review recommended that the new regulator should have the following features and functions:
- Given the pace of change in the digital economy, the regulator needs to have broad powers to make rules within the policy frameworks determined by parliament.
- The regulator should have scope to adopt flexible, managed regulation and to apply self-regulation, co-regulation or direct regulation as the circumstances require. It should also have a range of appropriate sanctions to encourage compliance.
- Within the framework of policies and principles established by legislation, the regulator should operate at arm’s-length from government except for a limited range of specified matters. The regulator should have secure funding and cost-recovery mechanisms.
- The regulator should have broad powers to encourage media diversity.
- The regulator should have flexible powers to deal with content-related competition issues, which will complement the Australian Competition and Consumer Commission‘s (ACCC) economy-wide powers.
14.45 One challenge for convergent regulators is to avoid prioritising infrastructure and service delivery issues over questions of media content. Otherwise, ‘issues of culture would come secondary to arguments on efficient market mechanisms and competition’. The question of how to balance content questions and cultural regulation with carriage functions and economic regulation is a complex issue of regulatory design, and there are important lessons to be learnt from how other convergent media regulators have approached such issues.
14.46 For example, Ofcom has a Content Board, which is charged with ‘understanding, analysing and championing the voices and interests of the viewer, the listener and citizen’ and advises on content-related decisions. Its membership is deliberately drawn from diverse backgrounds, including lay members and broadcasting experts.
14.47 The ALRC suggests that if a new convergent regulator for the digital economy is to be established, as recommended by the Convergence Review, the functions of the new regulator should include classification regulation. In developing such a convergent regulator, it will be crucial that the agency is developed in ways that give equal weight to the social and cultural dimensions of media regulation, including classification regulation, as to economic and technical regulation.
Independence of the Regulator
14.48 John Dickie submitted that the Regulator should be an independent statutory authority with ‘sufficient status and standing in the Government to resist attempts to influence his or her decisions’. Other stakeholders also referred to the need for the Regulator to have statutory guarantees of independence from political influence.
14.49 While the Classification Board is an independent classification decision-maker, and would retain this status under the new Classification of Media Content Act, the ACMA is subject to ministerial policy direction in relation to some of its roles—notably in relation to industry standards for online content.
14.50 For example, under the Broadcasting Services Act, the ACMA may determine an industry standard if a request for an industry code is not complied with by participants in a particular section of the content industry. The Minister may, by legislative instrument, give the ACMA a written direction as to the exercise of its powers under this provision. The Minister also has a power to give directions of ‘a general nature’, under the Australian Communications and Media Authority Act 2005 (Cth), concerning the ACMA’s ‘broadcasting, content and datacasting functions’. The ACMA must perform its functions, and exercise its powers, in a manner consistent with any such directions.
14.51 The extent of the Regulator’s independence from ministerial direction is an important issue that will require further consideration in drafting the new Classification of Media Content Act or any separate legislation establishing the Regulator. While ministerial policy direction may be appropriate, some matters may need to be insulated from any operational direction—for example, decisions on whether particular categories of content have a significant Australian audience and, therefore, require classification.
 See, eg, Arts Law Centre of Australia, Submission CI 2490; Australian Communications and Media Authority, Submission CI 2489; Foxtel, Submission CI 2487; Interactive Games and Entertainment Association, Submission CI 2470; Telstra, Submission CI 2469; SBS, Submission CI 1833; MLCS Management, Submission CI 1241; Bravehearts Inc, Submission CI 1175.
 Australian Communications and Media Authority, Submission CI 2489.
 Australian Law Reform Commission, National Classification Scheme Review, ALRC Discussion Paper 77 (2011), Proposal 11–1.
 Australian Communications and Media Authority, Submission CI 2489.
 Foxtel, Submission CI 2487.
 Australian Subscription Television and Radio Association, Submission CI 2494.
 Joint Submission Australian Broadcasting Corporation and SBS, Submission CI 2521.
 Internet Industry Association, Submission CI 2528.
 J Dickie, Submission CI 2457; I Graham, Submission CI 2507.
 J Dickie, Submission CI 2457.
 See Ch 6.
 See Ch 7.
 See Ch 8.
 See Ch 10.
 Australian Law Reform Commission, National Classification Scheme Review, ALRC Discussion Paper 77 (2011), [12.3].
 Australian Communications and Media Authority, TV Content Regulation (2012) <www.acma.gov.au> at 30 January 2012.
 C Blackman and L Srivastava, Telecommunications Regulation Handbook (10th ed, 2011), 19.
 Ibid, 19.
 An overview of media content regulations in selected countries is provided in App 3.
 Department of Broadband, Communications and the Digital Economy, Convergence Review: Interim Report (2011), 2.
 Ibid, 2.
 Organisation for Economic Co-operation and Development, Convergence and Next Generation Networks: Ministerial Background Report (2007), 49.
 Office of Communications (UK), Functions and Role of the Content Board (2012) <www.ofcom.
org.uk/about/how-ofcom-is-run/content-board/functions-and-role/> at 3 February 2012.
 J Dickie, Submission CI 2457.
 I Graham, Submission CI 2507; Lin, Submission CI 2476.
 See Ch 7.
 Broadcasting Services Act 1992 (Cth) sch 7, cl 91(4). See also Broadcasting Services Act 1992 (Cth) sch 5, cls 68(5), 69(4), 70(8), 71(8); sch 7, cls 92(3), 93(7), 94(7).
 Australian Communications and Media Authority Act 2005 (Cth) s 14(1).
 Ibid s 14(4).