The need for fundamental reform

2.59 In the Issues Paper, the ALRC asked whether, in this Inquiry, the focus should be on developing a new framework for classification, or on improving key elements of the existing framework.^[45] The ALRC sought community input on the question of whether incremental ‘fine tuning’ of the National Classification Scheme was appropriate, or whether more fundamental reform was required.

2.60 Most stakeholders to this inquiry advised the ALRC that the National Classification Scheme requires fundamental reform in order to address the challenges of a convergent media environment. The current scheme was described as ‘an analogue piece of legislation in a digital world’^[46] that has failed to respond to the challenges of media convergence.

2.61 Telstra argued that there was a need for the ALRC to undertake a holistic examination of the National Classification Scheme with the objective of developing a new classification framework for the new media environment:

Despite its worthy underlying intent, successive Governments have responded to challenges to the system posed by rapid technological change with a series of issue specific regulatory responses. After more than a decade of incremental changes, the National Classification Scheme as it stands today is a complex arrangement of parallel and sometimes overlapping systems of classification … In this context, rather than seeking to address the issues with the classification scheme that have emerged as a result of rapid technological change with further ad hoc reforms … the ALRC should undertake a holistic examination of the National Classification Scheme with the objective of developing a new classification framework for the modern media environment.^[47]

2.62 The Australian Home Entertainment Distributors Association argued that it

supports the intent of the Scheme as it currently stands but also strongly supports reform to recognise the realities of digital distribution, simultaneous release of content across platforms, the explosion in volume of content (including user generated) and the current fractured jurisdictional nature of the Scheme.^[48]

2.63 SBS questioned the continued relevance of a National Classification Scheme that applies different rules for different media platforms.

The current classification scheme adopts an ‘old media’ view that applies stricter controls to delivery platforms that previously had greater influence than others and that assumes that consumers have limited control over what they, or their children, watch. These underlying assumptions are, increasingly, less valid and distinctions between distribution platforms will ultimately become meaningless … There is a need for a framework that applies across platforms in a consistent and equitable manner, and which takes into account the growing availability of tools which enable consumers to control access to content.^[49]

2.64 Google observed that there has been a shift from ‘vertical media silos’ and stand-alone media platforms, to what it termed a ‘horizontal model of networks, platforms and content’:

The media environment has changed dramatically in the twenty years since the ALRC last considered censorship and classification. The existing classification regime was developed in an age where the media landscape was characterised by technologically distinct vertical media silos: radio, television, Internet etc. These media publishers created the content to be consumed by a passive audience.

Today’s media landscape is very different. The ‘audience’ of passive recipients of content has been replaced by citizen creators and citizen journalists engaging interactively with media platforms/services such as YouTube, Facebook, Yahoo!7 and ninemsn, to create and distribute content. Vertical media silos have been replaced by a horizontal, converged landscape of platforms, content providers and users, facilitated by communications networks … In this changed environment, how we determine the appropriate policy approach to regulation of content needs to be fundamentally reconsidered.^[50]

2.65 Analysis of the responses to the Issues Paper was also informed by text analysis software that demonstrated considerable support for the view that the development of a new classification framework was required for Australia, rather than continuing to modify the existing framework.^[51]

2.66 In the Convergence Review: Interim Report, the Convergence Review Committee argued that

Australia would benefit from a new policy framework that reflects the vitality of services provided on new and existing communications infrastructure. There should be a flexible approach to regulation that can keep pace with these opportunities. Policy and regulatory levers will need to promote open access, competition and innovation. They will also need to encourage a range of voices and provide incentives and government support to ensure that Australian and local content are still widely available in a global environment.^[52]

2.67 The Senate Legal and Constitutional Affairs References Committee, in its 2011 report Review of the National Classification Scheme: Achieving the Right Balance, argued that the National Classification Scheme is ‘flawed, and cannot be sustained in its current form’:

This is primarily because the scheme has not been successful in achieving a uniform and consistent approach to classification in Australia. Further, the current situation where the National Classification Scheme is loosely paralleled by co-regulatory and self-regulatory systems is far from adequate, particularly given the increasing convergence of media.^[53]

2.68 While a convergent media environment presents major new challenges for the National Classification Scheme, there continues to be an important role for the classification of media content in Australia, and community expectations are that media content will continue to have classification markings based on well understood classification categories.

2.69 The ALRC considers the major principles that have informed media classification in Australia—such as balancing the rights of adults to make informed media choices with the protection of children—to continue to be relevant. However, the framework that underpins these principles is in need of reform.

2.70 In the context of media convergence, there is a need to develop a framework that focuses upon media content rather than delivery platforms, and which can be adaptive to innovations in media platforms, services and content. Failure to do so is likely to disadvantage Australian digital content industries in a highly competitive global media environment.

2.71 The current classification framework is highly fragmented, with different guidelines and regulatory arrangements for different media platforms, and unclear lines of administrative responsibility. The relationship between the Commonwealth, states and territories in particular requires significant reorganisation, and there is a case for a new Act governing all media content classification, as well as revised regulatory arrangements.

2.72 The costs and regulatory burden of the current classification framework align poorly to community standards and expectations. There is too much top-down regulation of some media content and platforms, while regulatory requirements are unclear in relation to other media.

2.73 The ALRC is of the view that a more co-regulatory approach would better align the activities of government agencies to community expectations, by enabling a greater role for industry in classifying content, and allowing government regulators to focus on the content that generates the most concern in light of community standards and the protection of children.