Must carry obligations

15.146 The ALRC, in the Issues Paper, noted that calls to strengthen broadcasters’ rights in relation to retransmission have included suggestions that a US-style ‘must carry’ regime should be implemented.^[131] Under such a regime, free-to-air broadcasters have the option of either requiring that free-to-air broadcasts be carried on cable or another platform, or requiring that the free-to-air broadcaster is remunerated where the other platform chooses to retransmit the signal.^[132]

15.147 Many jurisdictions have must carry regimes. These were designed primarily to ensure that locally-licensed television stations must be carried on cable providers’ systems, mainly to protect local broadcasters from distant competitors and, in Europe, to protect local language channels. For example, in the absence of must carry obligations cable providers might only carry major capital city channels.

15.148 In Australia, the apparent purpose of a must carry regime would be to provide a framework for commercial negotiations between free-to-air broadcasters and subscription television companies about payments for broadcasts retransmitted by the latter. A must carry regime would also ensure that, in future, free-to-air broadcasters are not forced to pay for carriage on subscription platforms—particularly if IPTV becomes a primary platform with the advent of the NBN.

15.149 A number of stakeholders addressed the issue of must carry regimes in submissions to this Inquiry. Free TV was emphatically in favour of the introduction of such a regime—a view that was opposed by other stakeholders.^[133]

15.150 Free TV submitted that a US-style ‘must carry/retransmission consent’ regime should be introduced in Australia to ensure certainty of carriage and provide broadcasters with the ability to withhold consent and negotiate fees and terms of retransmission. This, it was said, would ensure that broadcasters are fairly compensated, while viewers can continue to access free-to-air services. The rollout of the NBN and the ‘likely proliferation of new entertainment platforms’ were said to highlight the need for urgent action.^[134]

15.151 In contrast, Screenrights submitted that a must carry regime is not necessary in Australia and that such a regime would be both ‘unworkable and anti-competitive’ and contrary to the interest of underlying copyright owners.^[135]

15.152 Screenrights considered that the context of retransmission in Australia is significantly different from that in overseas jurisdictions that have must carry regimes. First, the Australian retransmission rules effectively limit retransmission of commercial channels to local signals only—removing concerns about retransmission of distant signals.^[136] Secondly, for a must carry regime to be applied in Australia, it would have to include existing satellite based television service providers such as Foxtel and Austar. Screenrights submitted that it would not be ‘commercially viable to retransmit local signals via satellite due to the large number of small licence areas’.^[137]

15.153 Foxtel also contrasted the US position with that in Australia, suggesting that it would be inappropriate to implement must carry in Australia. It stated that, while the key objective in the US was to ensure that consumers could continue to receive signals in circumstances where cable television penetration was high and consumers did not have access to television signals via aerials, in Australia, almost 99% of the population has access to free-to-air television and cable and satellite penetration is significantly lower.^[138]

15.154 ASTRA highlighted the fact that successive Australian Governments have ‘invested many hundreds of millions of dollars since 2001 to ensure universal access to digital FTA television by terrestrial means, or by satellite where terrestrial reception is not feasible’.^[139]

15.155 Free-to-air broadcasters not only want the free-use exception removed but also favour the imposition of must carry obligations on subscription television services. The ALRC has concluded, however, that it should make no proposal on whether reform of the retransmission exception applying to broadcast copyright should involve the imposition of must carry obligations on subscription television service providers.

15.156 Essentially, must carry provisions would operate to impose obligations to communicate copyright materials (broadcasts), at the behest of the copyright holder. This issue does not directly concern the operation of copyright exceptions, which are the subject of the Terms of Reference. Further, the policy rationales for must carry regimes are clearly based primarily on communications and media policy and are not issues that can, or should, be driven by the ALRC in the context of reform of copyright laws.