14. The current framework for the classification of media content in Australia is based on the Commonwealth Classification Act and complementary state and territory legislation. Online content is primarily regulated under schs 5 and 7 of the Broadcasting Services Act. These regulatory regimes are summarised below.
National Classification Scheme
15. The National Classification Scheme (NCS) was established following recommendations made by the ALRC in its 1991 report, Censorship Procedure (ALRC Report 55). The report recommended establishing a legislative framework that would enable the Commonwealth, states and territories to take a national approach to classification.
16. The NCS is an example of a Commonwealth-state cooperative scheme. The legislative framework is based on the Classification Act and complementary state and territory legislation (state and territory enforcement legislation). It is underpinned by the Intergovernmental Agreement on Censorship (IGA). The IGA provides that Australian Government, State and Territory Censorship Ministers must consider and approve certain changes to the Scheme, including amendments to the National Classification Code and classification guidelines.
17. Under the NCS, the Classification Board, an independent statutory body, classifies certain publications, films (including videos and DVDs), and computer games. The Classification Review Board, also an independent statutory body, can review original classification decisions in certain circumstances and provide a fresh classification decision.
18. The Classification Act provides for a range of classifications for each of the three media formats. Material must be classified in accordance with the National Classification Code and Classification Guidelines—both agreed to by the Commonwealth and the states.
19. State and territory enforcement legislation, among other things:
prohibits the sale, distribution and advertising of unclassified material; and
restricts the sale, distribution and advertising of classified material in various ways.
20. To comply with state and territory laws, producers of classifiable products are expected to submit products for classification; retailers and other distributors of classified products must enforce relevant point-of-sale age restrictions and adhere to advertising and display requirements; and individuals must ensure that certain restricted material is not accessible to minors. Enforcement of these classification laws is the responsibility of states and territories.
21. In addition, the Australian Customs and Border Protection Service (Customs) identifies and confiscates ‘objectionable material’ at the border. The definitions of ‘objectionable material’ in the Customs (Prohibited Imports) Regulations 1956 (Cth) and Customs (Prohibited Exports) Regulations 1958 (Cth) substantially mirror the definition of RC material in the National Classification Code. These regulations are intended to prevent the import and export of material that would be classified RC.
22. The Broadcasting Services Act establishes a co-regulatory scheme for regulating online content and content provided by mobile carriers. Schedule 5 of the Broadcasting Services Act sets out provisions in relation to internet content hosted outside Australia, and sch 7 does so in relation to content services, including some content available on the internet and mobile services hosted in or provided from Australia. Broadly, the scheme constrains internet service providers (ISPs) and content service providers of online content.
23. Under the scheme, the Australian Communications and Media Authority (ACMA) investigates complaints about online content that the complainant believes to be ‘prohibited content’ or ‘potential prohibited content’ with reference to the National Classification Code.
24. Schedule 7 defines prohibited or potentially prohibited content. Generally, prohibited content is content that has been classified by the Classification Board as X 18+ or RC and, in some cases, content classified R 18+ or MA 15+ where the content is not subject to a ‘restricted access system’. Content is potential prohibited content if the content has not been classified by the Classification Board but, if it were to be classified, there is a substantial likelihood that it would be prohibited content. The Classification Board will classify online content on receipt of an application for classification.
25. ACMA must investigate all complaints that are not frivolous, vexatious, made in bad faith, or made to undermine the effective administration of the schedules. It may also investigate on its own initiative.
26. The action ACMA must take depends, among other things, on where the content appears to be located. Where prohibited content is hosted in Australia, ACMA must issue a final notice to the content service provider seeking removal of the content, the link, or service or placement behind a restricted access system, depending on the nature and classification category of the content. ACMA must issue an interim notice for Australian-hosted potential prohibited content and apply to the Classification Board for classification of the content. Content hosts must undertake the action required by the notice by 6pm the next business day, and financial penalties apply for failing to comply with a notice. Where Australian-hosted prohibited or potential prohibited content is also considered to be sufficiently serious, ACMA must notify law enforcement agencies.
27. Where prohibited or potential prohibited content is hosted outside Australia, ACMA notifies filter software makers accredited by the internet industry in accordance with the code of practice in place under sch 5. The filters are made available by internet service providers to their customers for free or on a cost recovery basis. Where prohibited or potential prohibited content hosted overseas is also considered to be sufficiently serious, ACMA notifies the member hotline in the country where the content appears to be hosted. Where no member hotline exists, ACMA notifies the Australian Federal Police for action through Interpol.
Strengths and weaknesses of the current system
28. Commentators have characterised the current classification system as having a number of important strengths and weaknesses. Some of these are discussed briefly below.
29. Compared to the pre-1995 scheme’s ‘complex network’ of laws—under which classifying one film might have involved 13 pieces of legislation in various jurisdictions—the current classification system is widely acknowledged as an improvement. Each year, the Classification Board makes thousands of decisions within prescribed time limits. Few decisions attract controversy, and commentators have suggested that distributors generally have realistic expectations about eventual classifications.
30. The Classification Board and the Classification Review Board are independent statutory bodies, operating apart from government, industry and each other. This formal independence has been described as one of the system’s ‘very important features’.
31. The current classification system is well-known and widely understood by the public. In a 2005 survey, virtually all respondents were familiar with the classification system for film and video, and the vast majority believed that classification symbols were useful.
32. It has been argued that the co-regulatory system based on industry codes of practice has worked reasonably well in relation to broadcast television in particular. In 2009–10, ACMA received 194 complaints and finalised 39 investigations into classification matters for broadcasting content. This figure has remained relatively static, suggesting that the bulk of viewer concerns about program classification matters are suitably dealt with by the broadcasters themselves, and that this framework has reduced the costs of regulatory compliance since its introduction almost 20 years ago. The question of whether such co-regulatory models provide guidance for other industries, particularly in the fast-changing digital content sectors, will be a matter considered in this inquiry.
33. Technological developments have altered the media landscape and challenged many of the underlying assumptions of, and justifications for, content regulation. In Australia today, 72% of households have broadband connections, and it is estimated that this penetration rate will reach close to 90% by 2014. It is also estimated that 3.5 million Australians will be mobile internet subscribers by 2014. Against this background regulators face an enormous amount of internet content, much of which is more mutable, housed outside Australia, and less amenable to border-based regulation than offline content.
34. The structure of media delivery has also changed. With the influence of media convergence, content is now available across platforms and devices that previously had distinct functions. Media convergence dramatically alters the practical implementation of classification principles, as news, information and entertainment services are increasingly accessed across multiple platforms.
35. For example, new devices allow for private viewing of media that once would have been available only in public stores or venues and which, in some instances, decrease the need to protect others from unsolicited material. Conversely, in other situations it is harder to protect consumers—an individual’s age, for example, is more difficult to authenticate online, undermining the effective implementation of age-based restrictions.
36. These broad shifts in the media landscape have manifested themselves in practical weaknesses in the classification system. The regulatory status of new types of media, such as mobile phone games and ‘apps’, has been ambiguous and uncertain. Despite frequent discussion about the need to treat similar content consistently across media platforms, there are numerous inconsistencies—for example, the same online content is treated differently depending on where it is hosted, and RC material can be accessed online by those seeking it.
37. Inconsistent or ineffective compliance and enforcement has also emerged as a significant issue across media contexts. Controlling access to, and enforcing penalties for, online material poses significant challenges. Other issues concern offline material, including distribution of unclassified or incorrectly marked material, distributors not complying with call-in notices, the resources required to investigate and prosecute breaches, and inconsistent enforcement provisions.
Broadcasting Services Act 1992 (Cth) schs 5, 7.
Classification (Publications, Films and Computer Games) Enforcement Act 1995 (NSW); Classification (Publications, Films and Computer Games) (Enforcement) Act 1995 (Vic); Classification of Publications Act 1991 (Qld); Classification of Films Act 1991 (Qld); Classification of Computer Games and Images Act 1995 (Qld); Classification (Publications, Films and Computer Games) Enforcement Act 1996 (WA); Classification (Publications, Films and Computer Games) Act 1995 (SA); Classification (Publications, Films and Computer Games) Enforcement Act 1995 (Tas); Classification (Publications, Films and Computer Games) (Enforcement) Act 1995 (ACT); Classification of Publications, Films and Computer Games Act 1985 (NT).
 Queensland, South Australia, Tasmania and the Northern Territory also have concurrent classification powers.
 G Griffith, Censorship in Australia: Regulating the Internet and Other Recent Developments—Briefing Paper No 4/02 2002 New Parliamentary Library Research Service; D McDonald, ‘Sense and Censorbility’ (Paper presented at Currency House Arts & Public Life Breakfast, Sydney, 2007); Australian Law Reform Commission, Censorship Procedure, Report 55 (1990), [1.11].
 Senate Legal and Constitutional Affairs Legislation Committee—Parliament of Australia, Estimates: Transcript of Public Hearing 18 October 2010, 10–11 (D McDonald) (6,468 decisions made in financial year immediately preceding review, all of which were made within the statutory time frame).
 See, eg, J McGowan, ‘Classified Material’ (2007) 22 Law Society Journal, 22.
 See D Hume and G Williams, ‘Australian Censorship Policy and the Advocacy of Terrorism’ (2009) 31 Sydney Law Review 381, 386. See also M Ramaraj Dunstan, ‘Australia’s National Classification System for Publications, Films and Computer Games: Its Operation and Potential Susceptibility to Political Influence in Classification Decisions’ (2009) 37 Federal Law Review 133 (describing current system as ‘superior to ones of the past’, but discussing ways in which political influence still exists).
 Office of Film and Literature Classification, Classification Study (2005), 6, 17, 32.
 Australian Communication and Media Authority, Overview of the Australian Communications and Media Authority’s interaction with the National Classification Scheme, paper prepared for the ALRC, May 2011.
 See, eg, V Scott and C Fankhauser, ‘It’s Different on the Internet: Regulating Online Content’ (2010) Internet Law Bulletin 200, 200; H Coonan, ‘Reforming Australia’s Media Legislation to Meet the Challenge of a Multi-Media Revolution’ (2007) 30 University of New South Wales Law Journal 232, 233; Interactive Games and Entertainment Association, Submission to Parliament of Australia Senate Legal and Constitutional References Committee Inquiry into the Australian Film and Literature Classification Scheme, 4 March 2011.
 PriceWaterhouseCoopers, Global Entertainment and Media Outlook 2010–2014 (2010) <http://www.pwc.com/gx/en/global-entertainment-media-outlook> at 11 May 2011.
 See Department of Broadband, Communications and the Digital Economy, Convergence Questions and Answers <http://www.dbcde.gov.au/digital_economy/convergence_review/questions_and_answers> at 21 April 2011.
 See generally L Lessig, ‘The Law of the Horse: What Cyberlaw Might Teach’ (1999) 113 Harvard Law Review 501 (an early articulation of the ways in which the internet altered the regulatory paradigm, with particular discussion of age-based ‘zoning’ laws).
 An ‘app’ refers to computer software designed for performance of a specific task. While it has typically referred to applications related to documents (eg, graphics or accounting software), the term is increasingly used to refer to small items downloadable onto handheld devices such as mobile phones and tablet computers that have a myriad of purposes, from productivity tools to games to news and information.
 Attorney-General’s Department, Submission to Parliament of Australia Senate Legal and Constitutional Affairs References Committee Inquiry into the Australian Film and Literature Classification Scheme, 4 March 2011, 15; Interactive Games and Entertainment Association, Submission to Parliament of Australia Senate and Legal Constitutional Committee Inquiry into the Australian Film and Literature Classification Scheme, 4 March 2011.
 Senate Legal and Constitutional Affairs Legislation Committee—Parliament of Australia, Estimates: Transcript of Public Hearing 18 October 2010, 11 (D McDonald).
 See, eg, Attorney-General’s Department, Submission to Parliament of Australia Senate and Legal Constitutional Committee Inquiry into the Australian Film and Literature Classification Scheme 4 March 2011, 14.
 Senate Legal and Constitutional Affairs Legislation Committee—Parliament of Australia, Estimates: Transcript of Public Hearing 18 October 2010, 11, 14 (D McDonald); Attorney-General’s Department, Submission to Parliament of Australia Senate Legal and Constitutional References Committee Inquiry into the Australian Film and Literature Classification Scheme, 4 March 2011, 6.