A proposal by the federal government’s Convergence Review to create a new
regulatory watchdog has received a harsh welcome from media companies who say
such a move would create excessive regulation and compliance costs for the media
industry, according to a report by The Australian Financial Review.

The review’s final report introduced additional regulation intended to force more
media groups to produce local video content.

The report, released Monday, also abolished existing ownership rules and
recommends a “public interest test” for big media mergers and acquisitions. “Foxtel
is concerned that overall the review recommends needless new regulation that will
stifle competition and innovation and does not recognise market reality,” Foxtel chief
executive Richard Freudenstein said, according to the AFR. “In particular, a new
public interest test would be broad and subjective, and by the review’s own
admission, it may increase regulatory burden.”

Ten Network Holdings chief James Warburton reportedly said there was “no
justification” for the proposed changes when free-to-air broadcasters “invest more
than $1.2 billion in local productions.”

The changes would define all major media companies as Content Service Enterprises
required to increase Australian video production, although digital companies such as

Google, Facebook and Apple would not be included in the definition.

The review committee’s head, Glen Boreham, defended the idea of a new watchdog.
“It’s not a super regulator,” he said, according to The Australian. “The new body may
be smaller than the existing one.”

Published 5:06 AM, 1 May 2012 – Business Spectator