BROADCASTING SERVICES AMENDMENT (REGIONAL COMMERCIAL RADIO AND OTHER MEASURES) BILL 2020 Explanatory Memorandum

Commonwealth of Australia Explanatory Memoranda

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BROADCASTING SERVICES AMENDMENT (REGIONAL COMMERCIAL RADIO AND OTHER MEASURES) BILL 2020

2019-2020 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES BROADCASTING SERVICES AMENDMENT (REGIONAL COMMERCIAL RADIO AND OTHER MEASURES) BILL 2020 EXPLANATORY MEMORANDUM (Circulated by authority of the Minister for Communication, Cyber Safety and the Arts, the Hon Paul Fletcher MP)

BROADCASTING SERVICES AMENDMENT (REGIONAL COMMERCIAL RADIO AND OTHER MEASURES) BILL 2020 GENERAL OUTLINE Schedule 1 to the Broadcasting Services Amendment (Regional Commercial Radio and Other Measures) Bill 2020 (the Bill) proposes to amend the Broadcasting Services Act 1992 (the BSA) local content requirements for regional commercial radio broadcasting licensees and associated reporting obligations. Overview of local content and local presence obligations Regional commercial radio broadcasting licensees are subject to a range of local content obligations under BSA, which support the ongoing availability of local content in regional Australia. The requirements include general obligations that apply to most regional commercial radio broadcasting licensees, as well as additional obligations which apply following a 'trigger event' (as defined in section 61CB of the BSA). A trigger event is a relevant change in ownership or control of a regional commercial radio broadcasting licence. The BSA includes a range of local content obligations. The obligations impacted by this Bill include:  Material of Local Significance - Regional commercial radio broadcasting licensees are subject to a licence condition requiring the broadcast of material of local significance (local content); and  Minimum Service Standards for Local News and Information - Regional commercial radio broadcasting trigger event licensees are subject to additional minimum service standards for local news and weather, local community service announcements and emergency warnings. Changes proposed by Schedule 1 The Bill aims to provide greater flexibility to commercial radio broadcasting licensees by allowing them to nominate to split exemption periods from local news and information content obligations into two periods, together totalling no more than five weeks. Schedule 1 also simplifies the compliance regime for the minimum service standard obligations which apply after a trigger event occurs. Changes proposed by Schedule 2 Schedule 2 to the Bill inserts a deeming provision into the BSA which relates to compliance with the Australian content multi-channel quota obligation. The deeming provision only applies to commercial television broadcasting licensees in regional and remote licence areas. The number and type of multi-channels provided by regional/remote commercial licensees is often determined by affiliation agreements between these licensees and the metropolitan networks (who, under these agreements, provide regional/remote commercial television broadcasting licensees with content). Licence holders may find it difficult to satisfy the Australian content multi-channel obligation when they have limited or no control over the programming provided on the multi-channels they broadcast, particularly if they carry a reduced number of multi-channels for commercial or technical reasons. 2

The measures in Schedule 2 will permit a regional/remote commercial television broadcasting licensee to be deemed to have complied with the multi-channel Australian content quota obligation, if the amount of Australian content broadcast on the multi- channel(s) it carries is not less than the amount broadcast on the equivalent metropolitan multi-channel during the same year. All commercial TV licensees report annually to the Australian Communications and Media Authority (the ACMA) on whether they have met the Australian content obligation both on their primary and multi channels. The ACMA publishes this information in annual compliance reports. These reports outline, inter alia, compliance with non-primary channel transmission quota (hours) for each licensee by reference to the regional licence area. An extract of the 2017 Reports is shown in Table 3 of the regulation impact statement. Following passage of this Bill, when the ACMA publishes annual reports it will include information about any regional broadcaster that makes use of the deeming provision in Schedule 2 of this Bill in order to be compliant with the non-primary channel transmission quotas. FINANCIAL IMPACT Nil, as financial impacts will be met from existing appropriations. 3

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Broadcasting Services Amendment (Regional Commercial Radio and Other Measures) Bill 2020 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. OVERVIEW OF THE BILL The Broadcasting Services Amendment (Regional Commercial Radio and Other Measures) Bill 2020 (the Bill) amends the Broadcasting Services Act 1992 (the BSA) and the Australian Communications and Media Authority Act 2005 (the ACMA Act) to ease the regulatory and compliance burden on regional commercial radio and regional commercial television broadcasters. In particular, the Bill includes a range of deregulatory measures that aim to allow regional commercial radio broadcasting licensees to satisfy their local content obligations in a more flexible manner by nominating split periods of exemption from local news and information content obligations, together totalling no more than five weeks and by removing the requirement for local news and information to be broadcast on public holidays. The Bill also includes a measure which proposes amending the Australian content multi-channel quota obligation for commercial television broadcasting licensees, to assist certain regional and remote licensees from failing to satisfy the obligation as a result of programming decisions beyond their control. HUMAN RIGHTS IMPLICATIONS Australia is a signatory to the International Covenant on Civil and Political Rights (the ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR). These two conventions are listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The Bill potentially engages two human rights:  Right to freedom of opinion and expression (Article 19 ICCPR)  Right to enjoy and benefit from culture (Article 27 ICCPR & Article 15 ICESCR). Right to freedom of opinion and expression The Bill's objectives are consistent with Article 19 of the ICCPR which sets out a number of obligations on Parties to ensure that everyone can exercise the right to freedom of expression and opinion, including the freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice. The exercise of the rights provided for in Article 19 carries special duties and responsibilities. It may therefore be subject to certain restrictions, but these shall only be such as are provided by law and are necessary: a) For respect of the rights or reputations of others; b) For the protection of national security or of public order, or of public health or morals. The Bill's objectives are directed at continuing to support the ability of regional commercial radio and regional and remote commercial television broadcasters to deliver material of local 4

significance (local content) to their audiences. It achieves this by reducing the regulatory and compliance obligations placed on licensees, and as such, is consistent with Article 19 of the ICCPR by allowing licensees to focus their limited resources on improving the quality of the local content and information services they offer. This in turn enables better access to content relevant to regional and remote audience's interests. Right to enjoy and benefit from culture The objectives of the commercial radio measures of the Bill (Schedule 1), will enable regional commercial radio licensees to better manage their compliance with their minimum service standards for the delivery of local news, local weather, local community service announcements and emergency warnings. Licensees often find these requirements to be inflexible, impractical or overly burdensome. For example, the exemption periods permitted by the BSA are not flexible enough to cover multiple recognised holiday periods throughout a financial year (such as, both Christmas and Easter). This inflexibility leads to an unnecessary burden on industry. A licensee must still hire staff to acquit its obligations in periods, including periods involving culturally significant holidays such as Easter, when it may face staffing and resources pressures affecting the licensee's ability to produce local content to meet the obligations or where audience numbers are significantly reduced. The Bill reduces this burden by enabling the licensee to split its periods of exemption from these requirements, and allows the licensee to self-nominate alternative exemption periods. The Bill also removes the requirement to meet the minimum service standards on weekends and public holidays for trigger event licensees who will only be required to broadcast local news and information on business days. By making these changes, the Bill will enable licensees to offer more flexibility to their staff who will be better able to take part in cultural life, including culturally significant holidays relevant to them. The measure supports the objectives of Article 27 of the ICCPR and Article 15 ICESCR. CONCLUSION This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. To the extent that the measures in the Bill may engage rights in the ICCPR and ICESCR, as outlined above, the measures are reasonable and proportionate to the goal of reducing the regulatory burden on the broadcasting industry. 5

REGULATION IMPACT STATEMENT Context In 2017, 12 regional or remote commercial television broadcasting licensees failed to comply with the Australian content multi-channel transmission quota as they had not broadcast the required amount of Australian content across their suite of multi-channels during the 2017 calendar year. The number and type of multi-channels provided by regional and remote commercial television broadcasting licensees is determined by affiliation agreements between the licensees in regional and remote geographic areas and the metropolitan networks (who, under these agreements, provide regional and non-aggregated remote commercial television broadcasting licensees with content). The 2017 non-compliance was a result of scheduling changes implemented by the metropolitan network that provides the relevant regional or remote licensees with content, changes that the non-compliant licensees had limited control over. The 2017 non-compliance, therefore, demonstrated the lack of market power held by regional and remote commercial television broadcasting licensees to influence scheduling changes undertaken by their metropolitan affiliates. It also raised concerns that the legislative framework had failed to keep pace with the market realities of providing commercial television broadcast content in regional and remote geographic areas of Australia. This RIS reviews the factors that led to the 2017 non-compliance, and provides options to amend the legislative framework to provide some surety to regional and remote commercial television broadcasting licensees that in the future they will not fail to comply with the Australian content multi-channel transmission quota solely due to metropolitan network scheduling changes that are beyond their control. The regulatory framework The Broadcasting Services Act 1992 (BSA) establishes the Australian content regulatory framework. One object of the BSA is to: promote the role of broadcasting services in developing and reflecting a sense of Australian identity, character and cultural diversity ... 1 This role is promoted via programming quotas that require minimum amounts of content produced under the creative control of Australians to be broadcast. Relevantly, the BSA sets transmission quotas, requiring a commercial television broadcasting licensee to transmit minimum amounts of Australian content on both its primary channel and its suite of multi- channels. In relation to multi-channels, section 121G of the BSA requires commercial television broadcasting licensees to transmit at least 1,460 hours of Australian content between 6am and midnight on multi-channels each year. Content production, in particular Australian content, has very high fixed costs. Therefore, quotas ensure that there is a sufficient amount of Australian cultural content provided on broadcasting services. Australian content transmission quotas, such as the multi-channel quota, do not target specific or at-risk genres of cultural content, requiring only that the transmitted content is produced under the creative control of Australians. Licensees tend to meet the Australian content transmission quotas by broadcasting sports, news and reality 1 Section 3(1)(e), BSA. 6

programming content, which is, in comparison to some scripted drama, relatively cheap to produce and appeals to a wide audience. On 12 December 2019, the Government released its response and implementation roadmap to the Australian Competition and Consumer Commission (ACCC) Digital Platforms Inquiry. In its response, the Government committed to a staged process to reform media regulation towards to a platform-neutral regulatory framework covering both online and offline delivery of media. The Government identified Australian content obligations as one of the first issues it would focus on and that it would release an options paper co-authored by the Australian Communications and Media Authority (ACMA) and Screen Australia to look at how best to support Australian stories on our screens in a modern, multi-platform environment. The paper was released on 15 April 2020 for a two month consultation period. The Government expects to continue working with industry to further explore the issues facing the media and screen production sectors, including the impact of COVID-19. The regional television broadcasting market Based on the Department's interactions with industry, it is the Department's view that regional and remote commercial television broadcasters are experiencing a period of significant disruption due to declining advertising revenue as advertisers follow audiences who have migrated online to access news and entertainment content. The ACCC analysed the trends in different types of advertising showing an overall decline in radio advertising since 2004, and a significant increase in online advertising from that point. 2 In particular, broadcast television audiences in regional and remote Australia have declined by an average compound annual growth rate of 6.3 per cent over the last four years, which the Department considers indicates an industry-wide reduction in advertising revenue. For an industry that derives the majority of its revenue from advertising, the reduction in revenue is likely to impact the profitability of regional and remote broadcasters. This trend is expected to continue with the growing popularity and availability of streaming services. Terrestrial broadcasting involves a high level of fixed costs to establish and maintain broadcast towers and other required equipment across a vast geographical area. On top of this, regional and remote audiences are able to access the metropolitan broadcasters' content directly via broadcast video-on-demand (BVOD) platforms, effectively diverting advertising revenue from regional and remote broadcasters to metropolitan broadcasters. It is the Department's view that regional and remote broadcasters have limited capability to create their own BVOD services to compete, as their affiliation agreements with metropolitan broadcasters often do not include the digital rights to the provided content. The Australian Government places high value on ensuring that regional audiences have ready access to broadcasting content, including equivalent content (in terms of both quality and quantity) to metropolitan areas. In addition to this measure, the Government is looking at a range of ways to provide for the continued sustainability of regional broadcasters. The Government is also reviewing the Australian content quotas with a view of working towards an end state of a platform-neutral regulatory framework covering both online and offline delivery of media content to Australian consumers. 2 Australian Competition and Consumer Commission, Digital Platforms Inquiry report, p121. 7

This RIS does not address wider Government consideration of regional broadcasting or content quotas. Rather, it focusses on a critical issue that is currently affecting regional and remote television broadcasters and the introduction of a measure to provide surety for those broadcasters in meeting their Australian content obligations before broader reforms can be undertaken. Delivery of television services in regional and remote licence areas As indicated above, regional and remote commercial television broadcasting licensees rely on affiliation agreements with metropolitan networks to source content for their terrestrial broadcasting services. These affiliation agreements are negotiated between a regional or remote commercial television broadcasting licensee and a metropolitan network, and the Government is not involved in such transactions. They are generally negotiated as a package, such that a regional or remote commercial television broadcasting licensee will be broadcasting content from one of the metropolitan networks, Channel 7, Channel 9 or Channel 10. As Government policy restricts the number of metropolitan television networks to three, the amount of content available to regional and remote licensees is limited. The number of multi-channels a regional or remote licensee carries is ultimately a commercial decision for the licensee. While affiliation agreements provide some scope for regional or remote licensees to slightly alter the viewing schedule their metropolitan affiliate sets for a channel - for example, to broadcast a regional news bulletin instead of a metropolitan-focused current affairs program - the scope for amendment to metropolitan schedules is not clear. As a result of the costs of developing content specifically for regional and remote licence areas, regional and remote commercial television broadcasting licensees are highly dependent on content provided by metropolitan licensees to comply with the Australian content obligations (including the multi-channel transmission quota). For instance, if a metropolitan network did not commission and broadcast enough Australian drama content to meet its first release drama quota obligations not only would it breach its obligation to comply with the requirement, its actions would also likely result in its regional and remote affiliate partners also failing to comply with the obligation. The creation of multi-channels by commercial television licensees initially created an opportunity for additional advertising slots to be sold to local businesses. However, since the introduction of multi-channels in Australia, advertising market revenue has been absorbed by digital platforms (eg Google, social media) and audiences have decreased due to the popularity of alternative forms of entertainment such as streaming services, social media, and gaming. The Department is aware of anecdotal evidence that some regional and remote broadcasters may not be able to fill their advertising slots on some multi-channels. This anecdotal evidence is supported by the lack of advertising present on the multi-channels that are not universally carried by regional and remote broadcasters. As a result, regional broadcasters are less able to sell all the advertising slots available, and advertising slots sold are attracting less revenue. This increasing difficulty in selling advertising means that it may not be commercially viable for some regional and remote commercial television broadcasting licensees to carry all of the multi-channels offered, because the drop in advertising revenue in regional and remote markets no longer allows some licensees to generate sufficient revenue to recover their transmission costs. While it is the Department's view that regional and remote broadcasters are suffering poor profitability, it should be noted that evidence illustrating the profitability of regional and remote broadcasters is commercially sensitive, and was not available at the time of this 8

analysis. However, data from television broadcaster industry group Think TV indicates that for the 12 months to December 2019, the total TV market recorded $3.86 billion in advertising revenue, down 4.8 per cent compared to the 12 months to December 2018. Table 1 - advertising revenue performance by sector 6 months to Dec % change 12 months to Dec % change 19 19 Total TV (excl $1,952,579,234 -5.9% $3,862,357,185 -4.8% SBS) Metropolitan $1,324,109,900 -7.0% $2,615,664,731 -6.1% FTA BVOD $87,347,296 42.8% $154,458,021 38.9% Regional FTA $343,788,749 -7.4% $697,909,655 -4.9% Source: ThinkTV More recently, the advertising market has been further effected by COVID-19, with the related shutdown of many production facilities, and cancellation or suspension of major sporting events meaning that commercial television advertising revenue is likely to further decrease. There is no current publicly available data on advertising revenue post COVID-19. Market analysts have forecast revenue declines of up to 11 per cent in the period up to 30 June 2020.3 On 15 April 2020, the Government announced a package of measures to help Australian media businesses during the COVID-19 pandemic, which include:  tax relief - a 12-month waiver of spectrum tax for commercial television and radio broadcasters;  investing in regional journalism - a $50 million Public Interest News Gathering program for commercial television and radio broadcasters and newspapers in regional Australia;  short-term red tape relief - Emergency suspension of content quotas in 2020;  harmonising regulation to support Australian content - Release of an options paper developed by Screen Australia and ACMA, commencing a fast-tracked consultation process on how best to support Australian stories on our screens; and  bringing forward the release of $5 million from the Regional and Small Publishers Innovation Fund. The measure considered in this RIS is not affected by the Government's announcement. In comparison, operating expenses for regional commercial television licensees have not reduced. The table below shows the operating expenses for two regional broadcasters as 3 Analysis: Free-to-air television advertising in the time of the coronavirus, Ad News, 23 March 2020, https://www.adnews.com.au/news/analysis-free-to-air-television-advertising-in-the-time-of-the-coronavirus 9

detailed in financial reports.4 Despite some variation, these figures demonstrate that operational costs have not decreased in line with advertising revenues, but have increased over time. The majority of operating expenses comprises transmission costs. For example, Prime's broadcasting and transmission costs (including in aggregated and non-aggregated licence areas) between the 2016 and 2019 financial years ranged from 73.5 to 80 per cent of total operating expenses.5 Table 2 - broadcasting and transmission costs for Prime and Southern Cross Media Groups Operating expenses - Prime Media Group Limited and Southern Cross Media Group Limited FY16 FY17 FY18 FY19 Prime Media Group Limited $50,967,000 $50,047,000 $54,978,000 $51,944,000 Southern Cross Media Group $474,853,000 $513,920,000 $500,566,000 $514,471,000 Limited Source: Prime Media Group Limited and Southern Cross Media Group Limited Financial Statements FY16- FY19 The situation for remote licensees is even more stark. These licensees are facing increasingly difficult advertising markets, and continuously increasing transmission costs. Further, because of the vast geographic areas covered by the typical licences of remote commercial television broadcasters, there are very few population centres from which to derive advertising revenue. This revenue from more populated areas could normally be used by licensees to subsidise transmission costs to cover the remainder of the licence area. This ongoing drop in advertising revenue is the most significant factor in considering the commercial viability of broadcasting additional multi-channels. Already, a number of regional and remote broadcasters currently carry only two of the three multi-channels from the channel 7 and channel 9 metropolitan networks due to high transmission costs and lower revenue. However, the Department does not have publicly available evidence on commercial viability to show the profitability of broadcasting multi-channels. Conversely, metropolitan networks have experimented with increasing the number of multi-channels they carry, subsequently spreading the amount of Australian content used to meet the multi-channel quota across their increasing number of channels. In April 2020, the Nine Network added an additional multi-channel, 9Rush, which is not currently carried by regional affiliates. If Nine Network was to acquit any of its Australian content obligations on this new channel, it may place other regional and remote broadcasters in breach of their licence condition. 2017 Non-compliance by regional broadcasters In 2017, 12 regional or remote commercial television broadcasting licensees failed to comply with the Australian content multi-channel transmission quota as they had not broadcast the 4 Note that Southern Cross Media reports on its commercial radio services as part of these financial reports as well as its regional commercial television services. 5 Prime Media Group Limited and Southern Cross Media Group Limited Financial Statements FY16-FY19. 10

required amount of Australian content across their suite of multi-channels during the 2017 calendar year. This represented 60 per cent of regional and remote broadcasters affiliated with the Nine Network and 19 per cent of all regional and remote broadcasters. Non-compliance occurred where regional and remote broadcasters that had affiliation agreements with the Nine Network did not broadcast the 9Life multi-channel. The compliance with the primary and multi-channel quotas for each of the 12 licence holders is listed below. Table 3 - compliance with primary and multi-channel quotas by licence holder Primary Non-primary Regional Channel Channel Company Name Licence Area Transmission Transmission Network Quota (%) Quota (Hours) Broken Hill Southern Television Pty Cross BROKEN HILL TV1 74.03 1377 Limited Broadcasting Spencer Gulf Southern Telecasters Pty Cross SPENCER GULF TV1 74.03 1377 Limited Broadcasting West Digital WIN Television No.2 GERALDTON TV1 71.97 1368.32 Television Pty Ltd Imparja REMOTE CENTRAL Television Pty Other & EASTERN 70.4 1188.33 Ltd AUSTRALIA TV1 WIN Television WIN RIVERLAND TV1 73.82 1379.15 SA Pty Ltd Television WIN Television WIN GRIFFITH AND MIA 75.07 1084.95 Griffith Pty Ltd Television TV1 Mildura Digital WIN MILDURA/SUNRAYS Television Pty 73.65 1360.8 Television IA TV1 Ltd MOUNT WIN Television WIN GAMBIER/SOUTH 73.82 1379.15 SA Pty Ltd Television EAST TV1 West Digital SOUTH WEST AND WIN Television Pty GREAT SOUTHERN 71.97 1368.32 Television Ltd TV1 Tasmanian Southern Digital Television Cross TASMANIA TV1 73.64 1317 Pty Ltd Broadcasting West Digital WIN KALGOORLIE TV1 71.97 1368.32 11

Television No.3 Television Pty Ltd West Digital WIN Television No.4 WESTERN ZONE TV1 71.97 1368.32 Television Pty Ltd Minimum annual 55.00 1460.00 requirement Source: The ACMA Australian Content Regional Compliance Standards Report, 2017 https://www.acma.gov.au/sites/default/files/2019-09/Regional-compliance-results-for-2017.pdf ACMA's compliance report shows that despite the 12 licensees not complying with their multi-channel obligations, they significantly exceeded their Australian content obligations on their primary channels. The ACMA decided to exercise regulatory forbearance in relation to the 2017 non-compliance with the Australian content multi-channel quota obligations, noting that this would be the last time that non-compliance would be overlooked. Each commercial television broadcasting licence is subject to the condition that the licensee will comply with the Australian content multi-channel quota obligation. Non-compliance with the multi-channel quota could result in a breach of a licence condition. Remedies available to the ACMA for a breach of this licence condition, assuming regulatory forbearance is no longer an option, include accepting measures by licensees to improve compliance, accepting enforceable undertakings, issuing remedial directions, suspending or cancellation a licence. These would be significant consequences for a regional or remote commercial television broadcasting licensee to face for actions that it may have limited control over. Australian content programming on multi-channels The amount and type of Australian programming on multi-channels varies between channels and changes throughout the year. Depending on the target audience, some multi-channels will contain significant amounts of new Australian content, while others repeat older Australian programming. Table 4 sets out a current weekly schedule of 9Life Australian programming. Over 2017 and 2018, a regional or remote licensee that did not carry 9Life was more at risk of breach of its Australian content obligations. Of the 17.5 hours of Australian programs, one hour of new Australian content is available. Three hours of Australian programming had premiered in the last two years. Table 4 - Sample of 9Life Australian Content Programming - March 2020 Day Program Program title Year first New programming length premiered (minutes) 30 The Garden Gurus 2013 Repeat Wednesday 60 The Block 2016 Repeat 30 Postcards 2013 Repeat, new to channel 12

30 Getaway 2019 Repeat 60 The Block 2016 Repeat 30 The Garden Gurus 2013 Repeat Thursday 60 The Block 2016 Repeat 60 The Block 2016 Repeat 30 The Garden Gurus 2013 Repeat Friday 60 The Block 2016 Repeat 60 The Block 2016 Repeat 30 Postcards 2013 Repeat Saturday 30 Getaway 2019 Repeat 60 Your Domain 2020 New 30 Getaway 2019 Repeat Sunday 30 Explore TV-Viking 2019 Repeat 60 Your Domain 2020 Repeat 30 Explore TV-Viking 2019 Repeat Monday 30 Postcards 2013 Repeat 60 Your Domain 2020 Repeat 30 The Garden Gurus 2013 Repeat 60 The Block 2016 Repeat Tuesday 30 Explore TV-Viking 2019 Repeat 60 The Block 2016 Repeat The problem The Department has formed the view that the regulatory framework for the delivery of Australian content in regional Australia does not account for the realities of delivering television services in these areas. Broadcasting additional multi-channels imposes a cost on broadcasters, and, while the Department does not have evidence of the commercial viability of broadcasters showing profitability, there may be insufficient advertisers in regional and remote areas to justify the cost of additional multi-channels. A number of regional and remote broadcasters have chosen to limit the number of multi-channels they provide, usually those affiliated with the Seven and Nine networks. Some regional licensees are finding it difficult to meet the Australian content multi-channel transmission quota obligation, particularly where a metropolitan affiliate partner has not taken steps to ensure that it programs Australian content across its multi-channels in a way that there is sufficient Australian content broadcast on the channels most often carried by regional and remote affiliates. 13

The Department is aware that programming decisions by metropolitan licensees are leaving their regional affiliate partners at risk of not complying with the Australian content multi- channel transmission quota obligation. In 2017, 12 of the 20 licensees in regional and remote licence areas affiliated with the Nine Network failed to comply with this obligation. While these same licensees complied with the obligation in 2018, industry has made it clear that compliance was 'fortuitous', rather than an indication that the underlying issues which contributed to the 2017 compliance have been resolved. In that year, licensees achieved technical compliance with the multi-channel obligation by simulcasting content from its primary channel onto one of its multi-channels. While this approach complied with the obligation, it did not contribute to any additional Australian content being available to regional and remote audiences. Going forward, regional and remote licensee compliance with Australian content obligations will continue to be in the hands of metropolitan partners who may choose to continue to diversify content across their suite of multi-channels, or add additional multi-channels. The need for government action The current legislative framework, combined with the commercial arrangements under which regional and remote commercial television broadcasting licensees source television content, leaves most regional and remote commercial television broadcasting licensees vulnerable to program scheduling changes implemented by their metropolitan affiliate partners. With these current market realities unlikely to change in the near future, the Department considers that regional and remote licensees are likely to continue to face greater difficulty complying the Australian content multi-channel transmission quota obligation than their metropolitan counterparts. The Department is of the view that broadcasters' difficulties in meeting content requirements can be taken to be an early warning sign of market failure. In order to fulfil the intention of its policy, the Government will need to take action before market failure occurs, as this would limit regional audience's access to Australian content rather than promoting it. ACMA, who operate at arms-length from Government, are expected to uphold current obligations as required by the BSA. It would be unusual that, as a regulator, it would continue to exercise forbearance over future breaches. Continued inaction is therefore highly likely to leave regional and remote commercial television broadcasting licensees open to future licence condition breaches. This is clearly not an equitable regulatory arrangement compared to metropolitan broadcasters who have a greater ability to avoid licence condition breaches. The Department has formed the view that the Australian content multi-channel transmission quota obligation requires amendment to ensure that regional commercial television licensees are able to comply with the obligation, regardless of the programming decisions of their metropolitan affiliate partners. There are other options available other than regulatory change, including expecting regional and remote broadcasters to carry all channels carried by metropolitan broadcasters regardless of the profitability of those channels. However, the Department does not have publicly available evidence on commercial viability to show the profitability of broadcasting multi-channels. Alternatively, regional and remote broadcasters could abandon affiliation agreements and directly source Australian content. The Department considers that both of these options are likely to impose significant costs on regional and remote broadcasters above the existing costs of the current affiliation agreements. Based on publicly available figures, it is not clear to the Government that regional and remote broadcasters would have access to sufficient revenue to offset these costs. Policy Options 14

Option One: Status quo Description Retain the current Australian content multi-channel transmission quota obligation for all commercial television broadcasting licensees. Assessment Regional and remote television licensees: The risk of a 'do-nothing' option would be that regional and remote commercial television broadcasting licensees would continue to be at risk of non-compliance due to scheduling decisions made by their metropolitan affiliate partners. These decisions, which a regional or remote affiliate would have minimal control over, could lead to future licence condition breaches. If ACMA did not continue to exercise forbearance, licence holders would be subject to a range of penalties. Such a regulatory approach, where a regulated entity is susceptible to breaching its regulatory obligations due to behaviour undertaken by a third party that the entity has little control over, is irregular. In light of the difficult operating environment for regional and remote broadcast licence holders, the status quo may place further financial pressure on regional and remote broadcasters, which may result in vulnerable broadcasters choosing not to offer multi- channels to viewers in its licence areas in order to avoid the risk of inadvertent breaches. Due to shrinking advertising markets and ongoing rises in transmission costs, the Department is of the view that it is unlikely that a change in business practice would generate sufficient additional revenue to increase the amount of multi-channels a licensee can offer. Screen production industry: For the Australian screen production sector, a do-nothing option is likely to minimise any costs to industry. This option provides the most impetus to a regional broadcaster to carry the full suite of multi-channels to avoid the risk of non- compliance, or to commission new Australian content. Metropolitan television licensees: Option one has a small impact on metropolitan television licensees, who may be under pressure form regional and remote television licensees to either adjust the scheduling of their Australian content across channels, or provide access to other Australian programming to enable regional and remote broadcasters to meet their quota. Regional and remote audiences: For regional and remote audiences, this option maximises the possibility of unique Australian content being available to them. In practice, the most likely action for a broadcaster at risk of breach, is to seek the agreement of their metropolitan affiliate to simulcast Australian content from either the primary channel or another multi-channel. This action negates the benefit that would otherwise flow to the Australian screen production sector or regional and remote audiences of the status quo. Regulator: This option would increase pressure on the regulator, ACMA, to take action should any further breaches occur. Regional and remote broadcasters are currently experiencing difficulties in meeting their quotas in some circumstance, and the effect that COVID-19 on the production sector means that all broadcasters are unlikely to meet their quotas in 2020. While the Government has instructed ACMA to exercise regulatory forbearance for the remainder of 2020, with possible extension into 2021, the dramatic effect on advertising revenue and availability of eligible content may constrain regional and remote broadcasters from meeting their quotas for some time even after forbearance ceases. For this reason, the Government's preference would be to regulate to resolve the issues outlined above, rather than continuing to put pressure on the regulator to resolve the situation. 15

Option Two: Deemed compliance with the multi-channel obligation Description Amend the Australian content multi-channel transmission quota obligation to allow a licensee in a regional or remote licence area who is unable to meet the multi-channel quota of 1,460 hours in a particular year to be 'deemed' to have met the requirement for the particular year if the amount of Australian content broadcast by the licensee on their multi-channel(s) during the particular year is not less than the amount of Australian content broadcast on the equivalent metropolitan multi-channel(s) during the same year. Assessment As the main issue facing the 12 licensees that did not comply with the multi-channel obligation in 2017 was the unforeseen scheduling change by their metropolitan affiliate partner (Nine), this option provides regional and remote commercial television broadcasting licensees with an option to be deemed compliant with the multi-channel obligation should similar circumstances occur in the future. As detailed above, it is quite likely that regional and remote commercial television broadcasting licensees will continue to face similar pressures going forward, so this option would provide licensees with important surety over their broadcasting operations. Regional and remote television licensees: Option two provides significant benefit to regional and remote television licensees given the certainty that this measure will provide licensees with in meeting their quota obligations. A relevant licensee will not need to change its current behaviour, in terms of producing and transmitting content, under this approach. It will be able to continue to obtain content commissioned and/or produced by its metropolitan affiliate partner, and transmit that content within their respective licence areas. The only change in behaviour as a direct result of this option will likely be borne from a minor change in compliance reporting procedures, which ACMA administers. This is likely to be information that licensees will already have compiled in the course of usual business practice. Licensees that are likely to be relying on the deeming provision are not likely to be in a financial position to commission or produce significant amounts of Australian content themselves. It is unclear how much scope these licensees would have to alter the content schedules of multi-channels under affiliation agreements. Such a licensee is therefore not likely to be in a position to meet its multi-channel obligation without the deeming provision. A licensee is also not likely to be in a position to alter current practices to maintain compliance with the obligation (short of simulcasting content) in the absence of the deeming provision proposed by option two or some other regulatory intervention. Metropolitan television licensees: Option two has no impact on metropolitan television licensees, and their behaviour will not change as a result of this option. Regional and remote audiences: To the extent that this measure does not encourage regional and remote licence holders to broadcast all multi-channels available to metropolitan audiences, this measure may result in less Australian content being available to regional and remote audiences. The risk of other broadcasters dropping non-profitable channels is dealt with in the risk section below. However, as detailed above the status quo option, in practice it is unlikely to deliver additional Australian content beyond that which they are already receiving. Audiences in the licence areas served by licensees likely to be relying on this provision do not currently have access to the full suite of multi-channels offered by metropolitan networks. This measure is 16

not likely to change the number of multi-channels carried by relevant licensees. In addition, it is important to note that regional and remote audiences will still be provided with significant amounts of Australian television content, specifically in the form of content delivered to satisfy the 55 per cent primary channel quota, as well as sub-quotas for drama, children's content and documentaries. Some regional and rural audiences will also have access to all multi-channels live streamed from metropolitan broadcast video on demand sites. Regional and remote audiences also continue to have access to content delivered by the national broadcasters. Screen production industry: Regional and remote commercial television broadcasting licensees are less likely to commission Australian content, with most content being acquired or commissioned by metropolitan networks under affiliate agreements. Original content produced by regional and remote commercial television broadcasting licensees is generally limited to the production of content required for acquitting local content obligations set by the BSA, which is mostly local news bulletins, and licensees tend to broadcast such content on their primary channel. There is a small risk that an independent producer may receive less payment for a commissioned series where audience numbers are lower (for example where it would be programmed on a multi-channel that is not broadcast to some regional and remote audiences). This impact is likely to be more significant in relation to multi-channels that program large amounts of new Australian content. In relation to the Australian content currently programmed on 9Life in table 4, this impact would likely only fall on the single hour of new Australian programming each week. Risks Construction of the deeming provision proposed by option two could lead to some adverse outcomes. For instance, there is the risk that the deeming provision could lead to, or not inhibit:  regional and remote licensees further reducing the number of multi-channels they carry;  metropolitan networks further diluting the Australian content they broadcast on their multi-channels; and  regional and remote audiences being deprived of first release Australian drama, children's or documentary content. Reduction of multi-channels in regional and remote licence areas: There is little to no risk of this outcome materialising as a direct result of this option. Should licensees choose to further reduce the multi-channels that they carry, it is more likely this will be on the basis of whether the revenue to be made by broadcasting the multi-channel would be outweighed by the costs of transmission. It is unlikely that the deeming provision would factor in the decision. However, the Department considers that market forces will likely dictate that, where a licensee can recover the costs of multi-channel transmission, the suite of multi-channels provided by regional and remote licensees will not be reduced further. Also, where audiences value access to the full suite of channels, broadcasters may continue to broadcast non- profitable multi-channels. However, the Department admits that there is a risk that a regional or remote broadcaster may choose to drop an unprofitable multi-channel as a result of this option. The Department is not aware of any information that leads to the conclusion that there 17

are market factors that will see an impending, significant reduction in the number of multi-channels provided by regional and remote television licensees. Further dilution of Australian content by metropolitan networks: Whilst a further dilution of Australian content is possible, the Department does not consider this to be likely or even probable as a result of this measure. The Department considers that there are market forces acting on metropolitan networks that will see significant amounts of Australian content being broadcast on all multi-channels. Australian content is still highly valued by Australian audiences. It is still the highest rating content on commercial television, including on multi-channels. The metropolitan networks tend to target specific markets and demographics using their multi-channels. As commercial television licensees aim to maximise their audience share, thus maximising their ability to monetise their content on all of their multi- channels, it is unlikely that they would seek to intentionally dilute general Australian content levels. This is evidenced by the high average compliance figures demonstrated by ongoing ACMA compliance monitoring. Further, whilst technically feasible for metropolitan networks to increase the number of multi-channels they carry, actual increases currently seem unlikely. As an example, the Seven Network recently took the step of reducing its multi-channels, by removing its 7Food multi-channel. These factors would indicate this risk to be very low. Reduced Australian drama, children's and documentary content to regional audiences: The potential impact on this risk is low. Broadcasts of first release Australian drama, children's and documentary content is mandated by program standards made under the BSA , and sub-quotas requiring the minimum amount of this content is set by the Broadcasting Services (Australian Content) Standard 2016 and the Children's Television Standards 2009. The measures would have no impact on licensee's sub-quota obligations. Option Three: Exemption from the multi-channel obligation Description Repeal the Australian content quota on multi-channels for regional and remote commercial television broadcasting licensees. Assessment Based on the current market realities of providing television services in regional Australia, especially in relation to the reliance on the provision of content from metropolitan affiliate partners, thought has been given to completely exempting regional commercial television broadcasting licensees from the multi-channel obligation. This option is considered viable as, based on current business practice, regional commercial television broadcasting licensees are only likely to make minimal changes to the content provided under affiliation agreements. There are also market forces (such as the ability to monetise content, audience preferences, scheduling and demographic considerations, and the availability of content, which are detailed in option two above) which, in the absence of regulation, are likely to ensure that no real dilution of content provided by metropolitan licensees on the multi-channels carried by regional affiliate partners eventuates. As option three is quite similar to option two above, the assessment of this option broadly mirrors that of option two. Regional and remote television licensees: As above, any licensee which is likely to struggle to meet the Australian content multi-channel quota obligation is unlikely to be in a position to 18

commission or produce content itself. A complete exemption from the quota is likely to be well received by regional and remote commercial television broadcasting licensees, as this option takes into account the current market realties relevant to the delivery of commercial television content to regional and remote audiences. Metropolitan television licensees: As with measure two above, this measure has no impact on metropolitan commercial television broadcasting licensees and their behaviour would not change under this option. However, the Department is aware that metropolitan commercial television broadcasting licensees have long sought removal of the transmission quota obligations. Without intending to limit any future analysis that may be done in this space, it is clear that there are significant market factors driving the broadcast of Australian content, as broadcasters have continuously delivered above the level required by the transmission quotas. Removing the multi-channel quota for regional and remote licensees only may be considered by metropolitan networks to be granting an unfair advantage to regional and remote licensees. Audiences: As with option two, this measure is very unlikely to have any impact on audiences. This option is not likely to change the amount of content, i.e. the number of multi-channels, carried by relevant licensees, however it should be noted that this option would make it more appealing for a licensee to reduce the amount of multi-channels it offers than option two would. The Department is still of the view that there are significant market forces that will facilitate the continuation of multi-channels being broadcast in regional and remote areas, assuming the advertising market can justify the transmission costs. However, we do believe that a reduction in the number of multi-channels offered is slightly more likely to eventuate under this option. Screen producers: As above, the Department does not consider that this option will have a negative impact on screen producers. Risks This option poses the same risks as option two. Whilst the department considers that the likelihood and outcome of these risks remain minor for this option, it is clear that option three does present slightly increased chances of these risks materialising. Significant market factors remain which suggest that these risks are very unlikely to be realised, however the Department considers that option two presents less risk and a more desirable way of achieving the Government's stated policy objectives. Preferred option Based on the evidence of the policy problem outlined in this RIS, the Department acknowledges the case for government intervention and policy movement away from the status quo is not strong. However, the trends facing all broadcasters are well established, and the Department has no evidence to suggest regional broadcasters are not experiencing the same trends as others in the sector. For the commercial and other reasons outlined in the RIS, it is unlikely that a move from the status quo will materially harm regional and remote consumers. Given this, on balance the Department considers the adoption of option two to be the preferred approach, acknowledging the risks and uncertainties in this analysis. Option two will result in regional and remote broadcast licence holders not having to negotiate agreement to simulcast content from its primary channel. 19

Option two also provides some advantage over option one in that it removes pressure upon ACMA to consider exercise of forbearance where a regional or remote broadcaster is simply re-broadcasting the content of a metropolitan multi-channel without significant change. Metropolitan broadcasters, which have larger audiences and attract more advertising revenue than regional broadcasters, have been effected by COVID-19. Therefore, since the Government has decided to exercise forbearance with regard to some content obligations in order to provide relief to metro broadcasters, it is reasonable that some form of relief is also made available to regional broadcasters, given the dramatic impact of COVID-19. While both options two and three would provide sufficient regulatory surety to regional commercial television licensees in meeting their multi-channel quota obligations, option three is considered to be a less desirable way of meeting the stated objective as it is more likely to have an impact on the total level of Australian content available to regional and remote audiences. Although option three is unlikely to result in any reduction in the volume of Australian content provided on multi-channels, it presents a slightly higher chance of this risk eventuating than option two. As the Department considers that the regulatory framework should ensure equality in the content broadcast to metropolitan and regional audiences, option two is the preferred option. Moreover, the Department does not see this RIS, nor the measures needed to fix the policy problem identified in this RIS, as the appropriate vehicle to consider the removal the transmission quotas. Consultation Initially both ACMA and the industry peak body for commercial television broadcasters, Free TV Australia, were informed of the Government's intention to act following the 2017 licence breaches. In April 2019, the former Minister for Communications and the Arts, Senator the Hon Mitch Fifield wrote to ACMA and Free TV Australia to announce that he would amend the BSA to better provide surety for regional and remote commercial television broadcasting licensees in meeting their multi-channel obligations. This letter informed ACMA and Free TV Australia that this amendment would take the form of the preferred deeming provision option. The Department worked closely with ACMA throughout the development of this measure to ensure that the preferred deeming provision option has enacted the Government's policy without any unintended consequences. This includes sharing and discussing drafting instructions in the development of the deeming provision. Once the Department was in receipt of an exposure draft of the amending bill that proposes to implement the preferred deeming provision option, it began a targeted round of consultation on the measure. This consultation round included ACMA, Free TV Australia and Screen Producers Australia (SPA). ACMA was included in the consultation, in part in order to test the impact of the measure on regional audiences, in line with its role as independent industry regulator and its audience research expertise. ACMA did not raise any concerns from regional consumers as part of consultation. The measure does not lead to a reduction on the current level of content provided by the relevant licensees. ACMA's comments on the measure were generally mechanical in nature. Free TV Australia's consultation comments noted that the measure is an important and indeed urgent one for regional broadcasters, and supports the Bill's introduction in Parliament as soon as possible. Free TV Australia requested that the deeming provision be 20

applied to the entire class of regional and remote commercial television broadcasting licensees, as all regional markets are currently experiencing the market realities that lead to the 2017 licence breaches. SPA claims that the deeming provision does not further specific BSA objects, namely: to promote the availability to audiences throughout Australia of a diverse range of radio and television services offering entertainment, education and information; and to provide a regulatory environment that will facilitate the development of a broadcasting industry in Australia that is efficient, competitive and responsive to audience needs. SPA also raised concerns about the reach of content produced by the Australian television screen production sector. It noted that, per audience figures, regional audiences account for, on average, around 40 per cent of the total Australian audience on television. The main reason for SPA's concerns about the reach of television content produced by the Australian screen production industry is the adverse impact that a reduced audience reach could have on the value, and financial opportunities open to screen producers of Australian drama, children's and documentary content. This sub-quota content is the most valuable content produced by the Australian television screen production sector, and the total audience able to receive these broadcasts is the largest factor relevant to determining the value and financial opportunities of this content. With the regional audience accounting for around 40 per cent of the audience reach of sub-quota content, SPA noted that this is incredibly significant to the value exchange for Australian producers. However, these concerns are significantly offset as sub-quota content appears to be exclusively broadcast on those multi-channels that are offered by regional and remote commercial television broadcasters, as detailed above. In 2017, regional and remote licensees did not broadcast reduced sub-quota content compared to metropolitan networks. Contrary to SPA's view, Free TV Australia, as part of its consultation comments, claimed that the preferred deeming provision option would have no impact on content producers, asserting that multi-channel content is exclusively produced or commissioned by metropolitan networks. Furthermore, there are some minor measures that industry could take to achieve technical compliance, such as simulcasting content, as in 2018, or scheduling unnecessary repeats which would result in no new content being commissioned. The Department agrees with Free TV Australia's assessment that these industry measures to achieve technical compliance are unlikely to provide any suitable public policy benefit to regional and remote audiences. Implementation and Evaluation The preferred option will be implemented by amending the BSA to insert the deeming provision within the same part of the BSA as the multi-channel obligation, Part 9. The deeming provision will apply to all regional and remote television licensees. The Department's view is that the market realities facing regional and remote commercial television licensees are not going away, and acknowledges that the effective obligation to carry multi-channels in order to meet content quotas has not remained aligned with the challenging market. This measure provides industry with immediate regulatory relief from the long-standing issues identified in the RIS. As such, it should be bought forward immediately. 21

The Government will be reviewing the existing Australian content quota obligations that apply to commercial television broadcasters as part of its response to the ACCC's Digital Platforms Inquiry (DPI). In its report, the ACCC recommended that the Government commence a process to implement a harmonised media regulatory framework. On 23 December 2019, the Government released its response to and implementation roadmap for this recommendation. The response committed the Government to commencing a staged process to reform media regulation towards an end state of a platform-neutral regulatory framework covering both the online and offline delivery of media content to Australian consumers. The policy and regulatory frameworks for Australian content production, among other things, will be one of the Government considers as part of its harmonisation efforts. As part of Government's consideration of the Australian content framework, it will consider the Australian content obligations that apply to commercial television broadcasters. As an initial step, Screen Australia and ACMA have been asked to co-author an options paper that will look at how to best support Australian stories on our screens in a modern, multi-platform environment. This paper was released on 15 April for a two month consultation. This process will include consideration of the Australian content transmission quotas, including the multi- channel quota. As a result, the option proposed by this RIS will be evaluated, likely focusing on the implementation, future necessity and real-world impact that the measure has had on the key stakeholders, including the significance for screen producers. The Government keeps the Australian content regulatory framework under constant consideration, and monitors the ongoing effectiveness of the transmission quotas in a number of ways, including ongoing compliance reporting. The Department also keeps across industry views about the Australian content framework to ensure that the regulations remain relevant and continue to have in their intended outcomes. 22

NOTES ON CLAUSES 1. Clause 1 provides that the Bill, when enacted, may be cited as the Broadcasting Services Amendment (Regional and Commercial Radio and Other Measures) Act 2020. 2. Clause 2 details commencement provisions of the Bill. 3. Sections 1 to 3 and anything else not covered in the table, will commence on the day after the Act receives the Royal Assent. 4. Schedule 1 will commence on the 28th day after the Act receives the Royal Assent. 5. Schedule 2 will commence on the day after the Act receives the Royal Assent. 6. Clause 3 provides that legislation that is specified in a Schedule to the Bill is amended or repealed as set out in the applicable items in that Schedule, and any other item in a Schedule has effect according to its terms. There are 2 Schedules to the Bill. Schedule 1 - Regional commercial radio Part 1--Amendments Australian Communications and Media Authority Act 2005 Item 1 - Paragraph 53(2)(k) 7. Item 1 amends Paragraph 53(2)(k) of the Australian Communications and Media Authority Act 2005 (the ACMA Act). Section 51 of the ACMA Act allows the ACMA to delegate any or all of its functions. Section 53 of the ACMA Act provides that Section 51 does not apply to a power to issue a notice under the BSA except in relation to certain Acts. Item 1 has the effect of allowing ACMA to delegate the new type of notice described in new section 61CH of the BSA (see item 15). Broadcasting Services Act 1992 Item 2 - Subsection 6(1) (definition of local content exemption period and remote area service radio licence) 8. Items 2 amends the definitions in the BSA's main interpretation provision, subsection 6(1). 9. Item 1 inserts two new defined terms in subsection 6(1) of the BSA, local content exemption period and regional commercial radio broadcasting licence. 10. A local content exemption period is the period in which a regional commercial radio broadcasting licensee is not required to meet the local content and/or minimum service standards obligations. 11. A regional commercial radio broadcasting licence means a commercial radio broadcasting licence the licence area of which is not one of the listed metropolitan licence 23

areas. This term is currently used in a number of parts of the BSA, however its definition sits in Division 5C of Part 5. Moving the term to the main interpretation provision of the BSA will help the BSA to become more readable and the definition of the term easier to find. Item 3 - Subsection 6(1) (definition of remote area service radio licence) 12. Item 3 omits '(within the meaning of Division 5C of Part 5)' from the definition of remote area service radio licence. This change is a consequence of the insertion of the definition regional commercial radio broadcasting licence into subsection 6(1). Item 4 - Proposed subsection 8AE 13. Item 4 inserts a new section 8AE immediately after existing section 8AD. Section 8AE contains a single exemption provision for both the local content and minimum service standards obligations, introducing the concept of a local content exemption period. Section 8AE is intended to replace the local content exemption arrangements in existing subsections 43C(1A) and 61CD(2) of the BSA, which the Bill proposes to repeal and/or replace (see items 7 and 14). 14. The existing regional commercial radio local content exemption arrangements provide for a default five week exemption period for both the local content and minimum service standards obligations, over the Christmas and New Year holiday period. The current exemption periods must be taken as a single, concurrent block of five weeks. While the existing default exemption periods occur at a time when there is a cluster of public holidays, it is not the only time of the year licensees may face staffing and resource pressures. Furthermore, the current requirements only permit these exemption periods to be varied from the BSA default via a legislative instrument made by the Australian Communications and Media Authority (ACMA), and any varied period is also required to be a single block of time. 15. Proposed section 8AE aims to increase the flexibility of the regional commercial radio local content exemption arrangements by allowing for exemption periods to be split into two periods (equalling five weeks in total) so that licensees are better able to cover significant holiday periods and allowing licensees to, via written notice to the ACMA, self-nominate alternative exemption periods. 16. The conditions relating to the local content exemption period are as set out in subsections (1) to (8). 17. Proposed subsection 8AE(1) sets out the various ways in which a local content exemption period may be specified. It also includes an order of precedence for the various specification methods and specifies a default local content exemption period which applies if a local content exemption period has not otherwise been specified. 18. Paragraph 8AE(1)(a) provides that if the ACMA has, by legislative instrument, specified a period in relation to one or more specified regional commercial radio broadcasting licensees that does not exceed five weeks then that period is the local content exemption period for the specified licensee or licensees. 24

19. Paragraph 8AE(1)(b) provides that if paragraph 8AE(1)(a) does not apply, but the ACMA has, by legislative instrument, specified two periods in relation to one or more specified regional commercial radio broadcasting licensees that together do not exceed five weeks, then each of those periods are the local content exemption period for the specified licensee or licensees. 20. Paragraph 8AE(1)(c) provides that if neither paragraph 8AE(1)(a) or (b) apply, and the ACMA has by legislative instrument specified a period that does not exceed five weeks, then that period is the local content exemption period. 21. Paragraph 8AE(1)(d) provides that if none of paragraph 8AE(1)(a), (b), or (c) apply, and the ACMA has, by legislative instrument, specified two separate periods that in aggregate do not exceed five weeks, then each of those periods are the local content exemption period. 22. Paragraph 8AE(1)(e) provides that if none of paragraphs (a), (b), (c) or (d) apply, and a licensee of a regional commercial radio broadcasting licence has, by written notice to the ACMA, specified a period that does not exceed five weeks, then that period is the local content exemption period for the licensee. 23. Paragraph 8AE(1)(f) provides that if none of paragraphs (a), (b), (c), (d) or (e) apply, and a licensee of a regional commercial radio broadcasting licence has by written notice to the ACMA specified two periods which in aggregate do not exceed five weeks, then the local content exemption period for the licensee is each of those periods. 24. Paragraph 8AE(1)(g) sets the default local content exemption period which applies if none of paragraphs (a), (b), (c), (d), (e) or (f) apply. In particular, paragraph 8AE(1)(g) provides that if none of paragraphs (a), (b), (c), (d), (e) or (f) apply, then the local content exemption period is the five week period beginning on the second Monday in December each financial year. 25. Proposed subsection 8AE(2) makes it clear that a period specified in accordance with proposed subsection 8AE(1) may be a period that occurs only once (paragraph 8AE(2)(a)) or a recurring period (paragraph 8AE(2)(b)). 26. Proposed subsections 8AE(3)-(8) set the procedures that a licensee must meet in order to self-nominate its exemption period. These procedures have been included to balance transparency around the self-nomination arrangements for both audiences and ACMA with flexibility for licensees. 27. Proposed subsection 8AE(3) sets out the requirements for a notice given to the ACMA under paragraph (1)(e) or (f) of section 8AE(3). Subsection 8AE(3) provides that such a notice must be given to the ACMA at least 21 days prior to the earlier of: the period specified in paragraph 8AE(3)(a); and whichever of the times described in paragraph 8AE(3)(b) is applicable. The period specified in paragraph 8AE(3)(a) is the start of the next local content exemption period that, disregarding the notice, will be applicable to the licensee giving the notice. The times described in paragraph 8AE(3)(b) are, in the case of a notice under paragraph (1)(e) the start of the period specified in the notice, and in the case of a notice under paragraph (1)(f) the start of the earlier of the periods specified in the notice. 25

28. In practice, if a licensee chooses to self-nominate a new exemption period, notice should be given at least 21 days before the day that the next applicable exemption period is due to start. For many licensees, in the first such instance after the legislation is passed, this will likely be 21 days before the second Monday in December (which is the current BSA default), however in future years it may be a different date depending on when an amended exemption period is taken. 29. Proposed subsection 8AE(4) provides that a regional commercial radio broadcasting licensee may only give one notice under subsection 8AE(1) in each financial year. Proposed subsection 8AE(5) further provides that a notice given to the ACMA under subsection (1) cannot be varied. A licensee may choose to submit notice to ACMA at any stage of a financial year, 21 days prior to its next impending exemption period. 30. Proposed subsection 8AE(6) provides that if a regional commercial radio broadcasting licensee gives the ACMA its first notice under subsection 8AE(1) (the earlier notice) in a financial year, and then subsequently gives the ACMA another notice under subsection 8AE(1) (the later notice) in a later financial year, and that later is expressed to replace the earlier notice, the earlier notice is taken to cease to be in force when the later notice is given. Subsection 8AE(6) refers to instances where licensees, after giving an initial notice in one financial year, decide to observe a different exemption period in a future financial year. This provision is intended to provide regional commercial radio broadcasting licensees with the flexibility to change their local content exemption period, with the limitation that this cannot be done within the same financial year. The limitation provides a level of certainty to audiences, as well as the ACMA in its role monitoring compliance with the local content obligations, in relation to when local programming will not be broadcast because the licensee has chosen to observe its exemption period. 31. Proposed subsection 8AE(7) allows a regional commercial radio broadcasting licensee to revoke a notice given to the ACMA under subsection 8AE(1) (the original notice). This can occur by written notice to the ACMA, as long as the notice of revocation is not given during a period specified in the original notice (that is, during the specified local content exemption period). Subsection 8AE(7) allows licensees to merely revoke an original notice given to the ACMA under subsection (1); it differs from subsection (6) in that there is no replacement notice (later notice), and will likely apply to a licensee that chooses to revoke an original notice and revert back to the BSA default. 32. Proposed subsection 8AE(8) requires a regional commercial radio broadcasting licensee to publish a notice given to the ACMA under subsection 8AE(1) on its website. This is to help interested members of the public access information about when a local content exemption period will occur. 33. Proposed subsection 8AE(9) requires a regional commercial radio broadcasting licensee to publish a revocation notice under subsection 8AE(7) on its website, if the revocation will result in the default exemption period occurring. This is to help interested members of the public access information about when a local content exemption period will occur. Item 5 - Subsection 8AF(1) 34. Item 5 is a consequential amendment that omits the reference to 'Division 5C of Part 5' from subsection 8AF(1) as the phrase 'regional commercial radio broadcasting licence' is defined by Item 1 in existing subsection 6(1) on commencement of Schedule 1. 26

Item 6 - Subsection 43B(10) 35. Item 6 repeals the existing definition of regional commercial broadcasting licence from subsection 43B(10). The definition is expressly defined by subsection 6(1) at Item 1 above. Item 7 - Subsection 43C(1A) 36. Item 7 repeals and replaces the existing subsection 43C(1A). Subsection 43C(1A) provides that a licence condition imposed by existing subsection 43C(1) does not require a regional commercial radio broadcasting licensee to broadcast material of local significance on a business day included in a local content exemption period for the licensee. In broad terms, this new provision will have the same effect as existing subsection 43C(1A), but with application to the new, more flexible, concept of a local content exemption period (as defined by section 8AE). Item 8 - Subsection 43C(8) 37. Item 8 repeals the definitions of metropolitan licence area, regional commercial radio broadcasting licence and regional licence area from subsection 43C(8). These definitions will no longer be required due to the new defined term regional commercial radio broadcasting licence (see item 2 above). Item 9 - Section 61CA 38. Item 9 repeals the existing definitions of approved local content plan and draft local content plan. These definitions are replaced with the new terms introduced by Subdivision C of Division 5C at Item 15. Item 10 - Section 61CA (definition of eligible local news bulletins) 39. Item 10 repeals the existing definition of eligible local news bulletins from section 61CA and substitute a new definition of eligible local news bulletins. 40. The existing definition provides that to be an 'eligible local news bulletin' a local news bulletin must, among other things, be broadcast on at least five days during the week regardless of whether or not the week contains a public holiday. This existing definition applies inconsistently to the material of local significance obligations and the minimum service standards obligations which means that licensees who are subject to both kinds of obligations are required to broadcast material to satisfy the minimum service standards on days when they are not obliged to provide material of local significance. 41. The new definition addresses this inconsistency by specifying that eligible local news bulletins are local news bulletins broadcast during prime-time hours; which adequately reflect matters of local significance; and none of which consist wholly of material that has previously been broadcast in the licence area concerned. Section 61CE details the circumstances when a regional commercial radio broadcasting licensee's broadcasts of eligible local news bulletins will meet the minimum business day service standards for local news (see item 14). 27

Item 11 - Section 61CA (definition of eligible local weather bulletins) 42. Item 11 repeals the existing definition and replaces it with the definition of local weather bulletins. Item 12 - Section 61CA 43. Item 12 repeals the existing definitions of metropolitan licence area, regional commercial radio broadcasting licence, and regional licence area. These definitions are no longer required, as the new express definition of regional commercial broadcasting licence are (see Item 2 above) sufficiently captures regional licence areas affected by the new local content statement regime in section 61CF. 44. Item 12 also repeals the existing definition of news bulletin. The BSA currently defines news bulletin as 'a regularly scheduled news bulletin.' This definition may frustrate the policy intent of allowing regional commercial radio broadcasting licensees with the flexibility not to satisfy the minimum service standards on public holidays. 45. The amended minimum service standards obligations remove the requirement for licensees to broadcast local news bulletins on public holidays. Instead, a new business day minimum service standard for local news requires broadcasting of local news bulletins on business days only (see Item 14 below); amending the weekly minimum service standard for local news, requiring licensees to meet a set amount of local news bulletins, in terms of time, per week (Item 14 below); and amending the definition of eligible local news bulletins to no longer require these bulletins to be broadcast on 5 days a week (Item 10 above). 46. These amendments effectively allow licensees to average out their local news bulletin broadcasts across the entity of the week, to ensure that they meet the weekly minimum service standard for local news (which is 62.5 minutes per week). While it is anticipated that licensees will continue to provide regularly scheduled news, on weeks with public holidays it is likely that some licensees will seek to broadcast more bulletins on the remaining business days that week. Such news bulletins may not meet the 'regularly scheduled' element of the news bulletin definition; so, the definition is removed. Item 13 - Sections 61CA (definition of weather bulletin) 47. Item 13 removes the words 'regularly scheduled' from the definition of weather bulletin in section 61CA as its inclusion in the definition is not consistent with the policy intention to provide relevant regional commercial radio broadcasting licensees with the flexibility to not broadcast material to satisfy the minimum service standards on public holidays. In line with the removal of the definition of news bulletin, the inclusion of these words in the definition of weather bulletin may frustrate the policy intention of the amended minimum service standards obligations in this Bill (see Item 12). 28

Item 14 - Sections 61CD and 61CE 48. Item 14 repeals existing sections 61CD and 61CE and substitutes new sections 61CD and 61CE. 49. As outlined at item 10, there is an inconsistency between the material of local significance obligations and the minimum service standards obligations which means that licensees who are subject to both kinds of obligations are required to broadcast material to satisfy the minimum service standards on days when they are not obliged to provide material of local significance. 50. New sections 61CD and 61CE provide that minimum service standards for local news and information do not need to be broadcast on public holidays as a consequence of the changes to the definitions, and to correct this inconsistency. 51. New section 61CD details the minimum service standards for local news and information, and describes when a regional commercial radio broadcasting licence holder must meet the minimum service standards obligations (including when they apply to specific licensees, and the application of the local content exemption period). 52. New section 61CE sets out how a licensee meets the minimum service standards for local news and information. 53. In contrast to existing sections 61CD and 61CE (which refer to 'minimum service standards' for various types of content), proposed new sections 61CD and 61CE describe the minimum service standards for various types of content as 'minimum business day service standards' or 'minimum weekly service standards'. To meet the minimum business day service standards a licensee would be required to broadcast a minimum amount of the relevant content on business days. However, a licensee may choose to meet the minimum weekly service standards by broadcasting local content on any day of the week. The minimum weekly service standards provide relevant licensees with the flexibility to avoid broadcasting local content on public holidays and weekends if this is not practicable. 54. Proposed subsection 61CD(1) provides that, if a trigger event for a regional commercial radio broadcasting licence has occurred before the commencement of the section, then after that commencement the licensee must meet the standards mentioned in subsection (3), as amended by this Bill. This means the minimum service standards for local news and information are replaced with those set out in proposed subsection 61CD(3), once that section commences. This will allow licensees to benefit from the changes to the minimum service standards for local news and information proposed by the Bill as soon as possible. 55. Proposed subsection 61CD(2) provides that if a trigger event for a regional commercial radio broadcasting licence occurs after the commencement of this section, then, after the occurrence of the trigger event the licensee must meet the standards mentioned in subsection (3). 56. Proposed paragraphs 61CD(3)(a) - (f) set out the new minimum service standards that must be met by a trigger event regional commercial broadcasting licensee, except during the local content exemption period. As indicated, the proposed new minimum service 29

standards differentiate between minimum business day service standards and minimum weekly service standards that apply to local news, weather, community service announcements and emergency warnings. This relieves the existing burden on trigger event licensees. 57. Proposed subsection 61CD(4) gives effect to the exemption arrangements for the minimum business day service standards obligations, providing that a regional commercial radio broadcasting licensee is not required to meet the listed standards on a business day included in a local content exemption period for the licensee. 58. Proposed subsection 61CD(5) gives effect to the exemption arrangements for the minimum weekly service standards obligations, providing that a regional commercial radio broadcasting licensee is not required to meet the listed standards during a week included in a local content exemption period for the licensee. 59. The removal of public holidays from the minimum service standards obligation does not amend the minimum service standard for emergency warnings, which will remain an obligation that is triggered by a request from an emergency services agency under new section 61CD. 60. Information on how a licensee will comply with the minimum service standard for emergency warnings is currently provided as part of a regional commercial radio licensee's local content plan. The amended local content statement obligation at item 15 does not require licensees to demonstrate compliance with the minimum services standards daily. For this reason, a separate obligation for emergency warnings is necessary. 61. Proposed section 61CE details the relevant minimum service standards for local news and information. 62. Proposed subsection 61CE(1) describes how a regional commercial radio broadcasting licensee must meet the minimum business day service standards for local news. Regional commercial radio broadcasting licensees will meet the minimum business day service standards for local news on a particular business day if, on that day, the number of eligible local news bulletins broadcast by the licensee is at least the local target number or, if greater, the average business day number of eligible local news bulletins broadcast under the licence during the benchmark year. 63. Proposed subsection 61CE(2) provides that, for the purposes of subsection 61CE(1), the local news target number is 1 or, if the Minister, by legislative instrument, declares that a greater number is the local news target number, the greater number. 64. Proposed subsection 61CE(3) provides that, for the purposes of subsection 61CE(1), the average business-day number of eligible local news bulletins broadcast under the licence during the benchmark year is the number calculated using the formula set out in the subsection. 65. Proposed subsection 61CE(4) provides that for the purposes of the subdivision, a regional commercial radio broadcasting licensee meets the minimum weekly service standards for local news during a particular week if, during that week, the total duration of eligible local news bulletins broadcast by the licensee is at least 62.5 minutes. 30

66. Proposed subsection 61CE(5) provides that for the purposes of the subdivision, a regional commercial radio broadcasting licensee meets the minimum business day service standards for local weather on a particular business day if, on that day, the number of eligible local weather bulletins broadcast by the licensee is at least the local weather target number. 67. Proposed subsection 61CE(6) provides that for the purposes of subsection (5) the local weather target number is 1 or if the Minister, by legislative instrument, declares that a greater number is the local weather target number, the greater number. 68. Proposed subsection 61CE(7) provides that for the purposes of the subdivision, a regional commercial radio broadcasting licensee meets the minimum weekly service standards for local community service announcements during a particular week if during that week the number of local community service announcements broadcast by the licensee is at least the community service target number. 69. Proposed subsection 61CE(8) sets out the target number for the purposes of subsection (7). The target number is 1 or if the Minister, by legislative instrument, declares that a greater number is the local community service target number, the greater number. 70. Proposed subsection 61CE(9) provides that for the purposes of the subdivision in which section 61CE sits, a regional commercial radio broadcasting licensee meets the minimum weekly service standards for emergency warnings during a particular week if on one or more occasions during that week, one or more emergency service agencies asked the licensee to broadcast emergency warnings, and the licensee broadcast those warnings as and when asked to do so, or there was no occasion during that week when an emergency service agency asked the licensee to broadcast an emergency warning. 71. Proposed subsection 61CE(10) provides that, for the purposes of the subdivision in which subsection 61CE(10) sits, the Minister may declare in a legislative instrument that a regional commercial radio broadcasting licensee has met its minimum business day service standards for designated local content programs on a particular day, if, on that day, the licensee meets any requirements that are specified in the declaration. Item 15 - Subdivision C of Division 5C of Part 5 72. Item 15 repeals existing Subdivision C of Division 5C of Part 5 and substitutes proposed new Subdivision C, which includes proposed new section 61CF, proposed new Subdivision CA, which includes proposed new section 61CG, and proposed new Subdivision CB, which includes proposed new section 61CH. 73. Existing Subdivision C in the BSA includes the requirement that, if a trigger event for a regional commercial radio broadcasting licence occurs, the licensee must submit a draft local content plan to the ACMA within 90 days after the day on which the trigger event occurs which sets out how the licensee intends to meet the minimum service standards. 74. Existing subdivision C includes the requirements for the development, submission, approval, variation and registration of a trigger event licensee's local content plan. Currently, section 61CP of the BSA requires a licensee to take all reasonable steps to ensure it complies with an approved local content plan. Annual compliance reporting by a 31

licensee on performance against an approved local content plan is also required by section 61CPA. The existing provisions permit a licensee to seek to vary an approved local content plan under section 61CL, however it must go through a variation process with the ACMA, even if the proposed variation to the plan does not mean the licensee will no longer meet the minimum service standards. 75. Local content plans represent a significant administrative and compliance burden for industry, but in practice provide minimal support for increased levels of local content being radio broadcast in regional areas. Local content statements - local news and local weather 76. Item 15 removes the local content plan obligations, including supplementary reporting requirements, from the BSA and, with proposed new Subdivision C, replaces them with a simplified requirement for relevant licensees to prepare and publish or provide on request, a local content statement which identifies the material that will be broadcast to meet the minimum service standards for local news and local weather. 77. This change means it will be easier for relevant licensees to vary the statements. Licensees are no longer required to provide compliance reporting. Instead, non- compliance will be determined under a complaints-based model. 78. The local content statements proposed in the Bill are similar to those required under a licence condition that currently applies to regional commercial radio broadcasting licensees - the Broadcasting Services (Regional Commercial Radio - Material of Local Significance) Licence Condition 2014. This licence condition requires a relevant licensee to compile a local content statement in relation to the material of local significance that is to be broadcast in its licence area during certain hours. Similar to the local content statements required under new Subdivision C, local content statements made under this licence condition must be made available to the public by publication on the relevant licensee's website, or providing copies of local content statements to any person, on request. 79. Proposed new section 61CF in proposed new Subdivision C requires relevant trigger event licensees to prepare and publish local content statements which identify the material that will be broadcast to meet the minimum service standards for local news and local weather. 80. Proposed subsection 61CF(1) provides that in instances where a relevant trigger event has occurred before the commencement of the section, the section applies if 90 days have passed since the section commenced and in other instances when a trigger event occurs, the section applies if 90 days have passed since the trigger event occurred. 81. Proposed subsections 61CF(2) - (11) establish the new local content statement requirements, including default requirements for the identification of the local news bulletin(s) and local weather bulletin(s) and a requirement to make the statement available to the public by publishing the statement on the licensee's website, or providing copies of the statement to any person on request. 82. Proposed subsection 61CF(2) provides that, for each business day, the licensee must prepare a statement that: identifies the eligible local news bulletin or bulletins to be broadcast by the licensee on that business day; and identifies the eligible local weather 32

bulletin or bulletins to be broadcast by the licensee on that business day; and contains such other information (if any) as is specified by the ACMA under subsection 61CF(4). 83. Proposed subsection 61CF(3) provides that a statement prepared under subsection 61CF(2) is to be known as a local content statement. 84. Proposed subsection 61CF(4) provides that, for the purposes of paragraph 61CF(2)(c) the ACMA may, by legislative instrument, specify information relating to either or both eligible news bulletins or eligible local weather bulletins. 85. Proposed subsection 61CF(5) provides that, if the licensee has prepared a local content statement for a business day, the licensee must make the statement available to the public by publishing the statement on the licensee's website or providing copies of the statement to any person on request. Paragraph 61CF(5)(b) explains that licensees are required to do so until the end of the 18 month period that began on the business day. 86. Proposed subsection 61CF(6) provides that if the licensee chooses to comply with subsection 61CF(5) by providing copies of one or more local content statements to any person on request, the licensee must publish on its website a notice that states it will provide copies of those statements to any person on request. 87. Proposed subsection 61CF(7) provides that if the licensee of the regional commercial radio broadcasting licence has prepared a local content statement, the licensee must retain the statement for at least 18 months. 88. Proposed subdivision CA establishes a new framework that sets out requirements around how a trigger event licensee informs the ACMA how it will comply with minimum service standards for emergency warnings. 89. In general terms, proposed new subsection 61CG(1) provides that, in instances where a relevant trigger event has occurred before the commencement of the section, the section applies if 90 days have passed since the section commenced and, in other instances when a trigger event occurs, the section applies if 90 days have passed since the trigger event occurred. 90. Proposed new subsection 61CG(2) provides that the licensee must take all reasonable steps to ensure that the ACMA is informed, in writing, how the licensee will comply with the minimum weekly service standards for emergency warnings. 91. Importantly, the standard licence conditions applicable to a commercial radio broadcasting licence under paragraph 8(2)(c) of Schedule 2 make it clear that a licensee must comply with all applicable requirements under Division 5C of Part 5. 92. The Government anticipates that the ACMA will consult with industry on aligning local content statements under the BSA and the Broadcasting Services (Regional Commercial Radio - Material of Local Significance) Licence Condition 2014, so that the same local content statement can be used to fulfil both obligations. 33

ACMA's information-gathering powers 93. Proposed new Subdivision CB sets out the ACMA's information-gathering powers for information that is relevant to the operation of Subdivision B (which covers the minimum service standards for local news and information). 94. Proposed new subsection 61H(1) provides that the section applies to information that is relevant to the operation of Subdivision B. Subdivision B sets out the minimum service standards for local news and information. 95. Proposed new subsection 61H(2) provides that the ACMA may, by written notice given to a regional commercial radio broadcasting licensee, require the licensee to give the ACMA any such information (relevant to the operation of Subdivision B) and do so within the period and in the manner specified in the notice. 96. Proposed new subsection 61H(3) provides that a regional commercial radio broadcasting licensee must comply with a requirement under subsection (2) to the extent that the licensee is capable of doing so. Item 16 - Section 61CT 97. Item 16 repeals existing section 61CT which relates to the regular reviews of local content requirements. This removes the need for the Minister to cause reviews of the operation of the local content obligations set by the BSA every three years. 98. Section 61CT also covered reviews of material of local significance, minimum service standards for local news and information as well as the Part 5 licence conditions and the local presence obligations for trigger event licensees found in section 43B. 99. The last statutory review proposed that Government consider whether the statutory review mechanism was the most efficient way to ensure that the regulatory framework remained effective and relevant. This section will be repealed on the basis that Government continuously monitors and reviews the local content framework for regional commercial radio licensees to ensure that it remains fit for purpose, eliminating the need for the Minister to cause a review. 100. Industry and audiences will continue to be able to submit requests to the Government, seeking to review aspects of the framework which may no longer be fit for purpose. Part 2 - Application and transitional provisions Item 17 - Application - local content requirements 101. Item 17 provides that the amendments of section 43C and Division 5C of Part 5 of the of the BSA made by Schedule 1 to the Bill (other than the amendments made by items 9, 15, and 16) will apply in relation to material broadcast by a regional commercial radio broadcasting licensee during the first week beginning after the commencement of the item and each later week. 102. Sub-item 17(2) explains that in item 17 week means a 7-day period that begins on a Sunday. 34

Item 18 - Transitional - local content exemption periods 103. Item 18 is a transitional provision that deals with how any exemption-related instrument made by the ACMA under subsections 43C(1A) and 61CD(2) of the BSA applies after commencement of this Bill. As noted above at item 4, proposed new section 8AE is intended to replace the local content exemption arrangements in existing subsections 43C(1A) and 61CD(2) of the BSA, which the Bill proposes to repeal and/or replace. 104. Proposed new section 8AE contains a single exemption provision for both the local content and minimum service standards obligations, introducing the concept of a local content exemption period. 105. Currently, under subsection 43C(1A), the ACMA may by legislative instrument specify a period or periods in which regional commercial radio broadcasting licensees do not need to broadcast material of local significance. 106. Similarly, under existing subsection 61CD(2), the ACMA may by legislative instrument specify a period or periods in which licensees do not need to meet the minimum service standards for local news and information. 107. The new local content exemption periods will be phased in as follows: if immediately before the commencement of this item, the ACMA had made an instrument under subsections 43C(1A) and 61CD(2) of the Broadcasting Services Act 1992, the instrument has effect after commencement of this item as if the amendments listed in Item 16 were applied. This ensures that the amendments in this Bill are consistent with, and give effect to, the prior instrument made by the ACMA. Schedule 2 - Australian content: transmission quota for regional/remote commercial television broadcasting licensees Part 1-Amendments Broadcasting Services Act 1992 Item 1 - At the end of subsection 121G(2) 108. Item 1 of Schedule 2 introduces a legislative note that will clarify that there is a deeming provision at proposed section 121H for regional/remote commercial television broadcasting licensees' compliance with the existing requirements of subsection 121G(2). Item 2 - After section 121G 109. Item 2 inserts new section 121H, which will give effect to deemed compliance with the obligation found in subsection 121G(2) for regional/remote commercial television broadcasting licensees. 110. Proposed subsection 121H(1) provides that, if a regional/remote commercial television broadcasting licensee has not complied with their obligation in subsection 121G(2) for a calendar year, then the licensee may give the ACMA a written notice stating that they wish to rely on new section 121H for that calendar year. The notice must specify a 35

particular metropolitan commercial television broadcasting licensee whose multi-channel quota will be used in relation to deeming the regional/remote commercial television broadcasting licensee's compliance with their subsection 121G(2) obligation. 111. In order to rely on the deeming provision in proposed section 121H, the licensee must have broadcast no less than the amount of hours of Australian programs broadcast on the equivalent multi-channel by the metropolitan commercial television broadcasting licensee, during targeted viewing hours in the calendar year. If the relevant conditions have been met, then the regional/remote commercial television broadcasting licensee is taken to have complied with its obligation under section 121G(2). 112. New subsection 121H(2) requires that, if a notice is given under paragraph (1)(b), then the ACMA must publish a copy on its website. 113. New subsection 121H(3) clarifies that subsection 121G(3) applies to paragraph (1)(d) in the same way it applies to 121G(2). This enables the acquittal of the Australian programs obligation by assuming that the broadcast of a first release Australian drama program counts for twice as long as the actual duration of the program. 114. Proposed subsection 121H(4) provides that, if the program content of a multi-channel service provided by a regional/remote commercial television broadcasting licensee is the same, or substantially the same, as the program of the metropolitan commercial television broadcasting licensee, then those services are equivalent to each other. 115. This is relevant in the application of the shared content test in section 61AE. This test helps to ensure the appropriate operation of the provisions in areas where television licence areas overlap, or where the characteristics of television transmission and reception in a radio licence area mean that what is effectively the same service may be received via two different television broadcast licences. 116. New subsection 121H(5) sets out a number of definitions relevant to the interpretation of defined terms used in subsection 121H(5), for example, metropolitan commercial television broadcasting licensee and regional/remote commercial television broadcasting licensee. Paragraph (5) also clarifies that Australian program and targeted viewing hours has the same meaning in section 121G. Item 3 - Application--Australian content: transmission quota for regional/remote commercial television broadcasting licensees 117. Item 3 clarifies that new section 121H of the Broadcasting Services Act 1992 applies in relation to Australian programs transmitted during the entirety of the 2019 calendar year, as well as each later calendar year. This item provides for retrospective operation of the amendments. 36

Item 4 - Transitional--notices for the 2019 calendar year 118. Item 4 provides that for the purposes of compliance with the multi-channel Australian content obligations for 2019, a licensee can provide a notice that it intends to rely on the deeming provision in new section 121H following commencement of the new section, given the retrospective operation of the amendments. 37

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