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Hitchens, Lesley --- "Commercial Broadcasting - Preserving the Public Interest" [2004] FedLawRw 4; (2004) 32(1) Federal Law Review 79


Lesley Hitchens[*]


During 1999 and 2000 considerable attention was focused on an inquiry conducted by the broadcasting regulator, the Australian Broadcasting Authority ('ABA'), into the commercial arrangements of a number of commercial radio presenters associated with talkback radio. In May 1999, an Australian Broadcasting Corporation ('ABC') program, Media Watch, alleged that, John Laws, a presenter with Sydney Radio Station 2UE, had financial arrangements in place with an organisation representing the major Australian banks, the Australian Bankers' Association. It was alleged that the effect of these arrangements was that Laws would broadcast positive comments about the banks. These comments were independent of any paid advertising run by the station for the banks or the Bankers' Association. Following the Media Watch revelations, the ABA announced that it would conduct an inquiry[1]into the allegations in order to determine whether there had been any breach of the Broadcasting Services Act 1992 (Cth) ('BSA') or the licence conditions or codes of practice to which Radio 2UE was subject. Following further allegations, the ABA, between July 1999 and November 1999, extended its inquiry to cover another 2UE presenter, Alan Jones,[2]and presenters from four other radio stations: 6PR Perth, 5AD (also known as 5ADD) Adelaide, 5DN Adelaide and 3AW Melbourne.

The ABA concluded its inquiry in March 2000 with the publication of its final report.[3]As a result of its investigations the ABA found that each of the radio stations (with the exception of 5AD) had been in breach of the Commercial Radio Codes of Practice, Code 2 (regulating news and current affairs programs) and Code 3 (regulating advertising). In addition, Radio 2UE was in breach of a licence condition concerned with the broadcasting of political matter. In response to these findings, the ABA imposed new standards applicable to the whole of the commercial radio broadcasting industry. The standards require disclosure of commercial arrangements, separation of advertisements from programming and the implementation of compliance training and procedures.

In its 2001 Annual Report the ABA commented that the Commercial Radio Inquiry had disclosed a systemic failure to ensure effective self-regulation and a lack of commitment to the codes of practice by the commercial radio industry in relation to the presentation of current affairs.[4]The Inquiry was significant because it was concerned not with isolated breaches but with breaches across a number of radio stations broadcasting across Australia. It raised significant issues about the relationship between commercial interests and broadcasting content, the overlap between advertising and programming content, and political broadcasting. It also highlighted deficiencies in the regulatory process itself. In essence, the Radio Inquiry was concerned with whether commercial broadcasting services were meeting public interest standards in the provision of news and current affairs coverage.

It might have been thought that as a result of the disclosures and the publicity generated, the Radio Inquiry would have produced a change of attitude within the commercial broadcasting sector. Yet, this may not be so. As a result of new disclosures, made again by Media Watch,[5]the ABA announced in November 2002 that it was instituting an investigation into the disclosure of commercial arrangements involving Telstra Corporation Limited (Telstra), Radio Stations 2UE and 2GB, John Laws (2UE) and Alan Jones (now with 2GB) and whether there had been breaches of the new program standards.[6]The ABA's terms of reference for the investigation indicate that it will be investigating matters similar to those before the Radio Inquiry.[7]The announcement of this new investigation must raise doubts about the effectiveness of the outcome of the Radio Inquiry.

In the course of the Radio Inquiry the ABA acknowledged the public interest in news and current affairs coverage and concluded that it had been undermined by the matters under investigation. By the imposition of program standards on the commercial radio industry, the ABA sought to ensure the restoration of that public interest. There are already signs that the steps taken may have been insufficient for that restoration process. Indeed, it is the contention of this article that the Inquiry was inevitably limited in what it could achieve. If there is a public interest in news and current affairs which should be preserved and promoted, as will be asserted in this article, it is also necessary to recognise that its maintenance will be influenced by the operation of the whole of the broadcasting environment. This article will examine two aspects of this environment: the regulatory process and the commercial context and it will argue that without recognition of how different aspects of this environment interact with one another, isolated regulatory responses will continue to lead to a failure to protect broadcasting's public interest. For adequate public interest protection there must be a wholesale consideration of the broadcasting environment and the factors influencing it. Before addressing the nature of the public interest and the influence of the regulatory process and the commercial context, the article will outline the relevant regulatory framework and examine the Radio Inquiry. Although the focus has more recently been on commercial radio, it is contended that the concerns expressed in this article are equally applicable to commercial television.


Each of the radio stations affected by the Radio Inquiry was licensed as a commercial broadcasting service under the BSA. Broadcasting services under the BSA are licensed according to the characteristics of the service. A commercial radio or television broadcasting service will be characterised by the following attributes: programming intended to appeal to the general public; transmission of programming over commonly available equipment and supplied free to the public; financed by advertising revenue; and operated for profit.[8]The categorisation of a service is important because it will determine the nature and extent of regulatory obligations. Regulatory obligations are imposed upon licensed services according to the degree of influence the different categories of licensed services 'are able to exert in shaping community views in Australia'.[9]Because of their wide availability and ease of accessibility, commercial broadcasting services are perceived to be the most influential and, hence, are subject to the highest degree of regulation.[10] Within commercial broadcasting, television has been subject to more extensive regulation than radio. This regulatory policy shapes regulation of broadcasting across a number of fronts including licensing, ownership and control and content. The source of regulatory obligations under the BSA is significant because it determines the consequences of a licensee's non-compliance. Apart from the obligations imposed by the provisions of the BSA, there are three approaches to the imposition of obligations upon licensees: licence conditions, program standards and codes of practice. Licensees are subject to licence conditions. Apart from any additional conditions which the ABA might impose on a licensee,[11]a licensee is subject to the conditions set out in the BSA, sch 2. Each category of licensed service has its own set of conditions, although there is also a set of 'special conditions'(sch 2, Part 2) which apply to all licensed services. One of the matters considered in the Inquiry was breach of the special condition relating to the broadcasting of political matter. The sch 2 licence conditions also require licensees to comply with any applicable program standards, which are determined by the ABA pursuant to s 122. Until the Radio Inquiry, no program standards applied to commercial radio licensees. The regulatory significance of licence conditions is that they are matters directly regulated and enforced by the ABA. A complaint about a failure to comply with a licence condition (and therefore program standards) can be referred directly to the ABA.[12]Breach of licence conditions constitutes an offence.[13]

The final approach to regulatory obligations is the code of practice. The use of codes relates to another aspect of the regulatory policy, expressed in s 4(2) of the BSA, which requires regulation of public interest concerns to avoid the imposition of unnecessary financial and administrative burdens on the providers. An essential component of this policy is the co-regulatory scheme. Under the BSA, industry groups representing the different categories of licensed services are expected to develop codes of practice[14]on a range of matters set out in the BSA, including the promotion of fairness and accuracy in news and current affairs programs.[15] Codes are registered by the ABA.[16] The co-regulatory approach is designed to allow greater industry independence but with statutory enforcement.17 Unlike the licence conditions and program standards, the codes are not directly enforced by the ABA. A complaint about a breach of a code must be made to the licensee and only if the response is unsatisfactory or a response is not given within a specified time can the matter be referred to the ABA.[18]Breaches of codes do not constitute breaches of the BSA or of licence conditions. If the ABA finds that there has been a code breach it may impose a licence condition requiring the licensee to comply with an applicable code of practice.[19]If the ABA is satisfied that a code of practice is not operating to provide community safeguards effectively within the industry, it may determine a standard.[20]A standard will be applicable to all licensees for that type of broadcasting service. This was one of the outcomes of the Radio Inquiry. Thus, with regard to the regulation of program content, the ABA has little direct regulatory control. It should be noted that, under s 170, the ABA does have the power to launch an investigation in connection with the performance of its functions and powers (and under s 182, the power to hold a hearing).[21]This has the potential to provide it with a more direct route to supervision of the codes. The ABA used its investigative and hearing powers to inquire into the matters which formed the Radio Inquiry. The ABA's functions include monitoring compliance with the codes of practice, developing program standards and monitoring the operation of the BSA.[22] The ABA in part relied on these functions to conduct the investigation and hearings which formed the Radio Inquiry.



In each of the cases investigated by the ABA, the presenters were hosting talkback radio programs. The Inquiry generated a great deal of media publicity,[23]no doubt because of the personalities involved. But this points also to the importance of the matters under investigation. First, the Radio Inquiry concerned very prominent radio presenters who were responsible for programs which were seen as very influential. The Final Report noted:

The personalities and opinions of talkback presenters tend to dominate the programs they host. Their success depends largely on their ability to talk easily on a wide range of issues and topics (including those of a social, political and economic nature), to engage their audiences and to elicit responses from on-line callers and other people who appear on their programs. ... The opinions of talkback announcers carry considerable weightwith many listeners, particularly regular ones. Generally speaking, advertisements read live-to-air by these announcers (especially if the advertisement includes an explicit personal endorsement from the announcer) are worth more to advertisers than pre-recorded advertisements, because of the perceived authority of the presenter when talking about the product being advertised.[24]

Secondly, talkback radio is viewed as 'a significant element'[25]of commercial radio's news and current affairs programming.[26]This in turn contributed to the seriousness of the investigation for as the ABA stated: 'current affairs ... is a significant source of information and opinions for the entire community. It is for this reason that the Authority takes particular interest in breaches of Codes in the areas of news and current affairs or advertising.'[27]The Inquiry had an importance not only because it was concerned with regulatory compliance and with news and current affairs programming, but also because it was concerned with a particularly pervasive and influential form of programming.


Five agreements of former Radio 2UE presenter Alan Jones were examined by the ABA, as were nine agreements of John Laws, also with 2UE.[28] These arrangements had a common framework. In return for payment to the presenter, the presenter would provide on-air exposure for the commercial interest concerned. In most cases the presenter and not the radio station was the party to these agreements and in many cases the radio stations appeared to be unaware of the existence of these agreements or of their content. It is worth looking at some of these agreements in detail to see the extent of the obligations imposed and their potential for impacting upon content.

One of the commercial arrangements made by Alan Jones was with Optus. Between 1993 and 1998 three agreements were entered into. The 1998 agreement provided for a fee of $500,000 per annum. In return, Jones' obligations included:

- providing personal endorsements on a regular basis of Optus services and products;

- publicising and endorsing Optus policy statements concerning its competitive commitment;

- recording advertisements for Optus and reading and embellishing live radio commercials by personal endorsement.[29]

In addition, Mr Jones was obliged not to

publicly or privately disparage the Optus Group or Optus Services; make any statements which may adversely affect their image; 'refer to any of them (directly or indirectly) adversely or in connection with any advertising of a Competitor or Competitive Service'; or endorse any Optus competitors or competitor services.[30]

There was a further provision which stated that if Optus was subject to media criticism for 'mistakes or errors in judgement', Jones was not required to 'cover for Optus ... where this might "prejudice his integrity as an experienced and respected radio commentator"'.[31]However, he was 'expected to use "his best endeavours to assist the Optus Group in remedying public attitudes arising from any such event"'.[32]Finally, Jones was not obliged to do anything which would 'detract from his standing and integrity as a professional broadcaster and media personality or require him to limit or breach his obligations to 2UE'.[33]

A good indication of the thrust of these arrangements can be seen in the comments made by Optus in a fax to a representative of Jones which was intended to provide 'an overview of the way we [Optus] see the relationship'.[34]The fax went on to say that whilst not part of the contract, it was the wish of Optus that Jones would 'continue regular mentions of ... [Optus] on air', whilst also taking 'scripts/speaking notes up to three times each week from ... [Optus] on issues of concern to the company and [using] them on the program'. The ABA noted Jones' frequent on-air mention of Optus.[35]In particular, there appeared to be a link between these mentions and the provision of the Optus scripts and talking points.[36]The mentions frequently related to topical telecommunications issues.[37]It was also clear from the evidence that the mentions for Optus and Jones' other commercial interests were usually done in a way which appeared to disguise their nature; for example, the mention might be developed by commenting on a newspaper item.[38]

A similar pattern could be seen with John Laws' on-air conduct. He had agreements with a number of commercial entities all of which included on-air obligations such as endeavouring to provide favourable publicity and informed commentary;[39]providing editorial comment from information supplied by the commercial entity;[40]and granting to senior executives the opportunity to discuss on-air 'their side of the story'.[41] Perhaps the most interesting of these arrangements was with the Australian Bankers' Association because the very existence of the agreement was recognition of Laws' influence over public opinion. Laws had been a strong on-air critic of Australian banks and the Bankers' Association regarded him as 'one of the banks' harshest critics.'[42] This led the Association to consider whether it might be possible to reverse this negative publicity. It is somewhat ironic that the reason for Laws' continued criticism of the banks probably arose because of another Laws' commercial arrangement with a competing home loan company, RAMS Home Loans Pty Ltd, part of which included Laws doing live reads for the company.[43]These were done on the basis of scripts provided by the company and regularly included topical criticism of the banks. One of the executives of RAMS acknowledged the attractiveness of these arrangements:

Mr Greg Jones gave evidence that the value to RAMS of having Mr Laws read advertisements live to air was the ability of Mr Laws to make advertising sound like 'chit chat', and that Mr Laws was as 'good as they get at blurring the fact that it is an ad'.[44]

The agreements, involving both 2UE and Laws, were entered into in February 1999 and were worth about $1.35 million.[45]They required Laws to record 150 advertising spots for the Association under the name 'The Whole Story'. These segments required him to read a script (supplied by the Bankers' Association) about an Australian historical figure and event, during which he would break away from the script to speak about some topical banking issue, also scripted by the Association:

Laws would tell listeners that 'speaking of the whole story he had checked out the whole story on a particular banking issue of the moment and had been very interested to discover the whole story about the issue'. After a 15-30 second dissertation, Mr Laws would revert to the historical story.[46]

The public was encouraged to believe that the idea for these 'The Whole Story' segments was entirely spontaneous, having arisen as the result of an unplanned on-air telephone call from the Bankers' Association's chief executive. In fact, the apparently unplanned telephone call was both planned and scripted.[47]Between March and July

1999, Laws carried out live reads for the Association four times a week as part of 'The Whole Story' segment.[48]During this period, the live reads included issues such as farm development schemes, bank charges, and taxes on banking — all of which were topical issues.[49]The arrangements also gave 'very senior bank and Bankers' Association executives' the opportunity to appear on-air with Laws to present their position on current public issues affecting the banking industry.[50]


The Radio Codes are not notable for their length and detail, and Code of Practice 2 covering news and current affairs programs is no exception, containing only two clauses (cl 2.1 dealing with news and cl 2.2 dealing with current affairs), each with sub- clauses. The stated purpose of Code of Practice 2 is 'to promote accuracy and fairness in news and current affairs programs'. The Inquiry was concerned with whether there had been a breach of cl 2.2(d):

In the preparation and presentation of current affairs programs, a licensee must ensure that:

(d) viewpoints are not misrepresented, and material is not presented in a misleading manner by giving wrong or improper emphasis, by editing out of context, or by withholding relevant available facts.

With the exception of Radio 3AW, all the stations investigated breached this provision; in the case of Radio 2UE on 60 occasions.

The ABA relied on a definition of 'current affairs' developed by its predecessor, the Australian Broadcasting Tribunal, namely, programs 'focussing on social, economic or political issues of immediate relevance to the community, including interviews and commentaries dealing in depth with news items.'[51]It was also accepted that talkback radio could constitute a current affairs program.[52]The issue as to whether there had been a breach of cl 2.2(d) turned on whether 'relevant available facts' had been withheld to render the presentation of the material misleading. The ABA held that the existence of the commercial agreements were 'available facts' and that they were relevant if the broadcast was about or was favourable to the third party with whom a presenter had a commercial agreement.[53]The ABA further concluded that the failure to disclose these agreements would render the broadcast misleading if disclosure might affect the listeners' assessment of the broadcast.[54]The ABA found that presenters regularly gave favourable coverage to the commercial interests with whom they had agreements whilst commenting on matters of current significance.[55]It concluded that the failure to disclose the existence of the commercial agreements caused the broadcasts to be misleading.[56]The ABA's concern was not so much with whether the agreements had influenced the presenters' opinions, but with the lack of opportunity for the listeners to consider this:

listeners are entitled to assume that presenters are 'disinterested', or lack a commercial interest ... listeners are entitled to make up their minds as to whether an on-air comment by a presenter has been influenced by a commercial arrangement between that presenter and a third party.[57]


A licensee, who broadcasts political matter at the request of another person, must broadcast, immediately afterwards, the 'required particulars'. The 'required particulars' are defined in sch 2, cl 1 of the BSA and are aimed at disclosing the identity and location of the person who has authorised the broadcast.[58]The ABA examined nine broadcasts, which had been made on behalf of the Bankers' Association, the Road Transport Forum, the Registered Clubs Association of New South Wales and Foxtel Management Pty Ltd, and found that 2UE had contravened the licence condition on five occasions.[59]Where the ABA was able to make a final determination, it found that the required particulars had not been given even though the subject matter of each of the broadcasts was inherently political and the content had been approved by and provided by the relevant commercial interest.[60]In relation to some of the broadcasts, the ABA noted that they dealt with issues which were topics of significant political and/or media debate at the time of the broadcasts.[61]In its Final Report, the ABA observed that whilst most of the broadcasts under investigation were

concerned with putting forward commercial and marketing messages, some broadcasts were concerned with matters of public policy and decisions by governments that have had commercial consequences for affected companies. These broadcasts, while couched in terms of a broader public policy debate, advocated particular political positions advantageous to those affected companies or organisations.[62]

Breach of the condition was not a mere technical matter but was directly related to the principle of fairness and accuracy. Under this principle, listeners should have knowledge of any commercial arrangements which might influence broadcasts with a political content.[63]


Like Code of Practice 2, Code of Practice 3 is marked by its brevity. It consists of only two clauses. The relevant clause for the Radio Inquiry was cl 3.1(a) which prohibited advertisements being 'presented as news programs or other programs'. It is clear that the rule is designed to ensure that listeners are not misled into believing that what is, in effect, promotional material has greater substance or credibility because it appears in another format. One can see here also the link with fairness and accuracy. The ABA found that 2UE, 5DN and 6PR each breached this rule, and in the case of 2UE on 30 occasions. In reviewing the broadcasts, the ABA observed that the broadcasts were designed to promote the relevant organisation or commercial entity (with which the presenter had a commercial arrangement); had the characteristics and content of a current affairs program; and appeared to be concerned with matters of political, social and/or economic relevance to the community, but were in fact advertisements.[64]For example, Laws, on Radio 2UE, broadcast an item praising the generosity of NRMA Ltd (with whom he had a commercial arrangement) in meeting the insurance claims of flood-affected victims, whilst contrasting it with other insurance companies. In another example, Alan Jones broadcast a report about Colonial State Bank opening a new bank branch in a supermarket. The report also included an interview with an employee of the bank, 'talking points' for this having been provided by the bank. The item, whilst focusing on the Colonial State Bank, appeared to be giving the impression that the item was about supermarket branches as an aspect of future banking industry practices.[65]


With the exception of Radio 3AW, the ABA concluded that each of the other stations investigated had breached the Radio Codes and, in the case of Radio 2UE, a licence condition. As explained earlier,[66]the ABA's direct enforcement powers are limited when dealing with a code breach. The ABA has only two options in relation to such a breach, both of which it chose to exercise.

Pursuant to its power under s 43 of the BSA to impose additional conditions, the ABA imposed two new licence conditions on Radio 2UE. The first condition, Disclosure and Compliance, required on-air disclosure of presenters' commercial agreements as part of the broadcast of material which relates to the commercial entity, its services and products. The licensee was also required to keep a register of commercial agreements between the sponsor and presenter and to implement compliance programs concerning broadcasting regulatory obligations. The second condition, Paid Advertisements distinguishable from other Program Matter, required advertisements to be presented in a way which enabled 'the reasonable listener ... to distinguish them from other program material'. Both of these conditions commenced on 3 April 2000 and expired on 2 April 2003.[67]

The other option open to the ABA for breach of the codes of practice was the imposition of a program standard under s 125 of the BSA. The ABA introduced three new program standards, applicable to all commercial radio broadcasting licensees who broadcast current affairs. Broadcasting Services (Commercial Radio Compliance Program) Standard 2000 (Cth) and Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 (Cth) are similar to the requirements of the Radio 2UE Disclosure and Compliance condition, whilst Broadcasting Services (Commercial Radio Advertising) Standard 2000 (Cth) is similar to the Radio 2UE Paid Advertisements distinguishable from other Program Matter condition. These standards commenced on 15 January 2001 and were to terminate on 2 April 2003. The expectation was that by the termination date, CRA would have in place new codes of practice reflecting the matters addressed by the standards.[68] However, in February 2003, the ABA announced that, in the light of the current investigation into compliance with the Standards,[69] it would extend them indefinitely.[70] The intention remains that following the outcome of the investigation, the standards will be replaced by industry codes.[71] It is ironic that it is possible non-compliance with the Standards which have delayed their replacement by industry regulation. The fact that the current investigation is concerned with issues very similar to the Radio Inquiry suggests that isolated investigations, whilst necessary, will not be a sufficient means of overcoming the weaknesses in the current regulatory arrangements for protection of the public interest in news and current affairs programming.


The BSA objectives and regulatory policy reveal that both the operation and regulation of broadcasting will require a balance to be drawn between commercial interests and the public interest. The Radio Inquiry found that the commercial arrangements had placed these interests in conflict.[72]If there is to be an effective change of attitude as to how the commercial broadcasting industry views its responsibilities, then it is important that there is a clear understanding of what the public interest in news and current affairs programming requires.

Regulation of news and current affairs broadcasting is not unknown within western-style democracies. Such regulation may include rules promoting fairness and accuracy and it may also include rules about impartiality. Within the Australian context the emphasis, at least within the commercial broadcasting sector, is on promotion of fairness and accuracy. Implicit in this regulation is an understanding that it is instrumental in the promotion of broadcasting freedom. This freedom should be seen as one encompassing not only the freedom of the broadcaster, but also of the viewer and listener to access information and a range of views and opinions.[73]The public interest is in ensuring that the public has access to adequate news and current affairs programming. Regulation of broadcasting, and particularly of this type of programming, is recognition that the media, particularly broadcasting, has become an important and essential source of information for the community, enabling its citizens to be informed about the world and to exercise their responsibilities within the democracy.[74]This understanding of broadcasting freedom, and its role, clearly forms part of the policy underwriting the BSA. The second reading speech acknowledges that broadcasting was 'vital to the operation of a democratic society'.[75] In relation to BSA objective, s 3(g), the Explanatory Memorandum stated:

the reference in this object to a 'fair and accurate coverage of matters of public interest' recognises that for most people, broadcasting is a major source of information on issues and events in the world. It is intended that, in the reporting of events and the presentation of issues, providers of broadcasting services will report the facts and facilitate the presentation of the range of views on any particular issue.[76]

Given this central role of the media, its regulation also deserves attention. As Price has commented, discussing the role of the electronic media within Habermas's concept of the 'public sphere':[77] '[i]f a public sphere is essential to a democracy, and the electronic media control the quality of the public sphere, the architecture of the media is of utmost importance.'[78] In the context of Australian broadcasting, it is perhaps salutary to note a further comment by Price:

Also, the possibility must be considered that radio and television are positively destructive of the public sphere. In some settings, broadcasting has become, at best, irrelevant to the operation of a democratic society and, at worst, so implicated in the harmful transformation of culture that the possibility of recuperation for an effectively institutionalised public sphere is dim indeed. Instead of a culture of rational discourse, a culture governed largely by the market-place emerges, culture as private interest to be bought and sold rather than as collective negotiation of common, public interest. So overwhelmed is the society by the use of common space as a means for the sale of goods that 'individual response becomes distracted, passive and uncritical, easily manipulable through advertising techniques and political propaganda'.[79]

Given Australian broadcasting's recent history, Price's words may seem like an invitation to relinquish any wider role for broadcasting and to accept that the commercial sector, in particular, is beyond recuperation and should be left to the marketplace and to those who can best afford the presenter's voice. But the response to this must be that whilst the legislation itself sets up objectives for the operation of commercial broadcasting which implicitly recognise a public interest role, it is incumbent on those having responsibility for the regulatory design and its implementation to ensure that mechanisms are in place and utilised which will render the commercial broadcasting sector accountable.

What is required then for protection of the public interest? It is suggested that there are at least three requirements. The first is that there is adequate coverage of news and current affairs. Specific recognition of this within the regulatory design is difficult to find. It is at best hinted at in BSA objective, s 3(1)(a) which seeks the promotion of 'a diverse range of radio and television services offering entertainment, education and information'. Within the Australian context, this diversity of programming is sought through structural regulation which establishes different types of services, each type having a different mandate catering for different audience and programming needs; for example, commercial broadcasting services versus community broadcasting services. This is largely a hands-off approach because within the licensee's mandate there is little which specifically addresses the need to provide adequate coverage of news and current affairs. Also relevant is s 3(1)(g) which encourages commercial and community broadcasting services to respond to the need for appropriate coverage of matters of local significance, but here also the regulatory design relies on creating the conditions for a diverse broadcasting environment, rather than imposing specific programming obligations.[80]Within the commercial sector, it is a matter for the licensees to decide on the type of programming, and, in this context, the amount of time which will be devoted to news and current affairs programming. And, as Hoffmann-Riem observes, these decisions will be 'mainly determined by economic factors and motives'.[81]The structural design is itself meant to counterbalance this potential weakness by the presence of the public broadcasting sector (and within Australia, a community broadcasting sector). The public broadcaster will be able to make programming decisions free from commercial constraints.[82]The ABC is also required, under the Australian Broadcasting Corporation Act 1983 (Cth), s 27, to broadcast daily regular news from each of its broadcasting services, and to employ adequate numbers for the collection of news and information. However, providing counterweights to the inherent weaknesses of a commercial sector will only be effective if those other sectors are sufficiently resourced.[83]Hence, whilst it might be argued that this first requirement for protection of the public interest is implicit in broadcasting's regulatory design it can also be seen that it is a fragile design.

The second requirement relates to the production of news and current affairs programming. It is important that the community is able to be confident that such programming has been produced with adequate attention to ethical standards, such as fairness and accuracy, and without distortion, for example, because of commercial relationships. Here there is a preparedness to exercise closer control over content, albeit through a regulatory process which relies heavily on industry regulation. In the light of the Radio Inquiry there must be a serious concern about whether the current regulatory approach is providing adequate protection of this public interest element.

The third requirement could be described as the need for quality news and current affairs programming. To describe it as such is hazardous, and one is liable to be misunderstood. First, because it implies some sort of vetting of content which would be an unwarranted encroachment on broadcasting's editorial freedom; and, secondly, because it seems to suggest that it might be possible to have some satisfactory understanding of 'quality'. To speak of a 'quality' requirement suggests a paternalistic and heavy-handed approach which would certainly not be consistent with the current Australian regulatory style. However, as the section in this article looking at the commercial context shows, there are weaknesses in what is offered as news and, particularly, current affairs, which at the very least suggest the need for a reconceptualisation of news and current affairs. If rational discourse is to occur,[84]then it must be appropriate for the regulatory system to address also the seriousness of that offering. Whilst such regulation should not interfere with the actual content, it may be that conditions can be created for ensuring that greater attention is given to the nature of the product. This is explored further in the section on the commercial context.

Thus, protection of the public interest in news and current affairs programming may require a more careful delineation of what that public interest entails and, in turn, a closer scrutiny of how the current regulatory design serves it. It might be argued in response that this description of the public interest is going beyond the accepted understanding of the role of the commercial broadcasting sector. Certainly, Australia has not required of its commercial broadcasting sector the same degree of public service broadcasting obligations that customarily have been required of the equivalent sector in the United Kingdom.[85]Yet, it is clear nevertheless that the broadcasting legislation does demand a public interest role for the commercial broadcaster and implicit in that is the recognition that the commercial broadcasting market cannot be left to itself to fulfil that role. As Graham has pointed out:

commercial broadcasting, if driven entirely by the market, is responsive only to the aggregate of individual decisions by consumers as expressed in their purchases. Such broadcasters will, therefore, ignore what people want to see happen as citizens or as members of communities.[86]

Even multimedia developments such as digital technology and the Internet are unlikely to overcome the inherent defects of the broadcast market and reduce the justification for regulation of broadcasting.[87]If there is to be a diverse market offering a range of programming services and a range of views and opinions then it is not appropriate to rely on the public broadcasting sector alone. Although there will be a difference in what is required of the public broadcasting sector compared with the commercial sector, it is important that the commercial sector is recognised as having a role to play. To fail to do this is to risk marginalising broadcasting's public interest mandate. Although the commercial sector's public interest role is clearly recognised in the legislation, there has been a failure to articulate precisely what is required. This in turn has led to a lack of awareness of how different aspects of the broadcasting environment can impact adversely on that mandate. In the following sections, two such aspects, the regulatory process and the commercial context, are examined.


Co-regulation plays an important role in Australian broadcasting regulation. As the Productivity Commission pointed out, the current regulatory approach constitutes a major change from the previous more prescriptive model:[88]'[t]he term "co-regulation" implies that industry develops and administers its own arrangements, while the Government provides legislative backing for enforcement.'[89]However, the broadcasting co-regulatory scheme provides a wider role for the statutory partner, since the ABA is also involved with setting the rules (through consultation and approval) and monitoring their operation.[90]In considering the role the regulatory process plays in the protection of the public interest, two issues will be relevant: the effectiveness of the co-regulatory model and its appropriateness for regulation of fairness and accuracy. Three stages in the regulatory process can be identified: the devising of rules, their monitoring, and the enforcement of the rules.


The rules governing broadcasting content are found in the codes of practice. The process for development of these codes is set out in BSA s 123, which notes Parliament's intention that relevant industry groups should develop codes of practice. However, the ABA also has a role since the rules must be developed in consultation with the ABA and take into account any relevant research of the ABA (s 123(1)). The legislation appears to give industry the freedom to decide what matters should be included in the code, since s 123(2), which lists matters (including the promotion of fairness and accuracy in news and current affairs programming) is written in permissive language. However, the interplay of industry and statutory regulation can be seen because s 125(2) empowers the ABA to determine a standard, in relation to a s 123(2) matter, where no code of practice has been developed. Before registering a code, the ABA must be satisfied that it provides appropriate community safeguards (s 123(4)). Despite this interplay, the devising of the code is largely a matter for industry, and the ABA has not exercised its powers under s 125(2). Although the Radio Inquiry demonstrated just how spare these codes can be, this does not appear to have caused the ABA concern prior to the Inquiry.[91]


The ABA has a role in monitoring the operation of the codes of practice. Section 5 contains a general provision requiring the ABA to monitor the broadcasting industry. More specifically, s 158(i) requires the ABA to monitor compliance with the codes and s 158(l) to monitor and investigate complaints about broadcasting services. The Productivity Commission was critical of the way in which the ABA carried out these responsibilities, '[which] tends to be limited to collecting information from broadcasters about complaints, investigating those complaints that broadcasters have failed to deal with satisfactorily, and surveying community attitudes on issues about programs.'[92]Despite the Radio Inquiry and the Commission's comments, there is little evidence that the ABA has adopted a more pro-active monitoring approach. The current investigations into alleged breaches of the new radio standards and into Telstra's commercial arrangements appear to have arisen as a result of Media Watch reports.[93]


It is the enforcement element of the regulatory process which particularly casts doubt upon the effectiveness of the co-regulatory scheme. The Productivity Commission asserted that the code of practice system was more indicative of a self-regulatory scheme.[94]The ABA's power to impose a standard when a code of practice is failing is designed to address systemic failings rather than individual non-compliance.[95]Code breaches are matters for a broadcasting licensee. Although the ABA has a power to deal with complaints about breaches of codes, that power can only be exercised if the complainant has first approached the licensee and the response is unsatisfactory or not dealt with within the specified time limits.[96] In the Final Report, the ABA called for greater enforcement powers, specifically arguing that it should be able to impose immediate sanctions, such as civil penalties, for breaches of codes of practice.[97]The Government has made no response.

Other weaknesses are evident. One curious feature of the regulatory design is that the licensee, about whom the complaint is made, is the one to determine the outcome of the complaint. This would seem to be a major flaw, and an unnecessary one, since each of the sectors will have an industry body through which a complaints mechanism could be organised. Complaints will only be passed from the licensee to the ABA if the complainant is not satisfied with the outcome. Although a complainant, having dealt with the licensee, may be satisfied with the outcome, this will not necessarily address the question of code compliance. There may still be matters to be investigated, but there will be no avenue for this. The model is peculiarly consumer-oriented and fails to address the wider public interest encompassed by the codes and code compliance. The Television and Radio Codes make provision for summaries of breaches to be sent by the licensees to the relevant industry body. In turn, CTVA and CRA report on these complaints to the ABA, but this seems to amount to little more than a collection system.[98]

The ABA has not shown itself to be the most pro-active of regulatory agencies but, this aside, there are clearly weaknesses in the co-regulatory design, particularly in connection with the powers given to the regulatory agency. This has been recognised by the ABA and by the Productivity Commission.[99]The co-regulatory system, and its weaknesses, should not be viewed in isolation. The wider broadcasting regulatory environment, and its potential for influencing the operation of the co-regulatory

system, needs also to be taken into account. The weaknesses of co-regulation may undermine the seriousness which should be accorded to programming obligations, and this risk is exacerbated when this wider context is taken into account. When this is done, one can see that the broadcasting regulatory system is largely indifferent to a broadcaster's responsiveness to its obligations under the codes of practice. The BSA provides for no general overview or assessment of a licensee's performance. A licensee, upon licence grant, makes no promises about its performance and during the term of a licence the regulatory authority does not undertake any general performance review. Nor is any opportunity provided upon licence renewal for an assessment of the licensee and its respect for programming obligations. Licence renewal is virtually automatic. Upon application, the ABA must renew a licence unless it is of the opinion that there is a significant risk that a licensee will commit an offence against the broadcasting legislation or a breach of a licence condition.[100]In the absence of action having been taken by the ABA to render compliance with a code a licence condition or to promulgate a program standard, it is unlikely that breaches of a code of practice will be considered on renewal. The ABA's lack of pro-activity, the weaknesses of the co-regulatory system, and the place of co-regulation in the wider regulatory context all combine to produce a culture of regulation which would appear to accord little significance to programming obligations and the values they represent. In its Final Report in the Radio Inquiry, the ABA noted that amongst all of the licensees investigated there was a lack of, or only minimal attention to, compliance procedures in relation to the codes: there was no formal training regarding the obligations under the codes; no regular reminders of their existence and content; and no procedures for on-going compliance monitoring.[101] The failure of licensees to attend to code compliance was perhaps a tacit recognition of how little the codes, and compliance, mattered in practice.[102]

The question remains then whether co-regulation is an appropriate process for regulation of fairness and accuracy in news and current affairs programming. This review of the regulatory process shows that as currently structured there are serious weaknesses in its design. These weaknesses appear, in turn, to have led to a regulatory culture which has accorded little value to the codes. The regulatory process designed to protect the public interest is actually undermining it. In a matter as serious as fairness and accuracy, reliance on co-regulation seems inappropriate. The Productivity Commission considered that fairness and accuracy failings in news and current affairs reporting were much more serious than other program content failures.[103]It noted that in any area of high risk or where non-compliance would have a significant impact, more explicit government regulation should apply, and concluded that fairness and accuracy obligations should be made a licence condition.[104]


To assess adequately broadcasting's public interest role, one cannot ignore the commercial context. The commercial broadcasting services are primarily funded by advertising revenue and are the most relevant to any consideration of the commercial context.[105]Inevitably, there will be a tension between the interests of the broadcaster and advertiser, on the one hand, and the interests of the audience on the other. The broadcaster and advertiser will seek to have access to as much advertising space as possible, but this will not necessarily serve the audience. First, there may be a limit on how much advertising the latter is willing to tolerate. Secondly, an advertising-funded system may not deliver a diversity of programs or even the programs most valued by audiences. The interest of the broadcaster and the advertiser will be in programs which are able to deliver the largest audience.[106] This has certain consequences. Broadcasters will be more likely to broadcast programs which attract the largest audience even though there may be programs which would be more highly valued by viewers or listeners. This asymmetry was explained by a UK Government inquiry into funding of broadcasting:

An advertising-supported system will lead to programme diversity only to the extent that different advertisers are willing to pay to associate their messages with different programmes. The important point from an efficiency perspective is that there is no reason why the value of programmes to advertisers should correspond to the value attached to the programmes by viewers and listeners. ... The commercial viability of a programme in an advertising system means that the programme must generate a sufficiently large audience to induce advertisers to pay enough to cover the cost of showing the programme. This may lead to programmes being shown because they are popular numerically, even though programmes that are less popular numerically but more intensely demanded are not shown.[107]

Another, but related, consequence of this tendency towards audience maximisation is that the advertiser will not be interested in paying for benefits which cannot be measured, such as the contribution a program may make to rational discourse.[108]This may have a direct bearing on news and current affairs programming. Because of these by-products of an advertising-funded broadcasting system, it is usual to regulate advertising in order to preserve a balance between the interests of the broadcasters and advertisers and the audience. In writing of the effect of deregulation in the US broadcasting environment, Hoffmann-Riem has observed that

[i]t is now possible to release broadcasting completely from its trustee role and to relieve it of its obligations to serve as a democratic forum accompanying the formation of public opinion. In a pure market model, broadcasting is legitimated not by its journalistic accomplishments but, rather, by its capacity of being able to be used for diverse entrepreneurial objectives.[109]

Australia has not yet reached the American position, as described by Hoffmann- Riem, although it is arguable that commercial radio comes close. There is still a commitment within the regulatory model to maintenance of the public interest and to regulation which restrains complete surrender to a market model. Given this, it is important to identify how this commercial context may impact upon news and current affairs programming, and to consider whether the pressures of the commercial context on the public interest are sufficiently met by the regulatory framework.

The commercial context may impact in several ways. Access to programming may be affected. As already discussed, there may be a tension between the amount of transmission time devoted to programming and the amount devoted to advertising. The commercial environment may also inhibit access by the viewer or listener to a diverse range of programs. Secondly, the commercial context may have an impact on the content of news and current affairs. For example, it may influence the selection of material for broadcasting. The Radio Inquiry showed how commercial relationships could influence content. Thirdly, the commercial context may influence the perception of the role of news and current affairs reporting. It is suggested that regulation has a role to play in each of these matters.


One way to accommodate the interests of the advertiser and the audience is to impose limits on the amount of time which can be devoted to advertising. Quantitative rules are in place governing commercial broadcasting services. The Television Code states that the rules are

intended to ensure that: [5.1.1] there is a reasonable balance between program and non- program matter broadcast by a licensee, having regard to the interests of viewers in uncluttered program presentation, and the commercial interests of advertisers and stations.[110]

The Radio Codes take a rather more prosaic view of the matter: 'The purposes of this Code [on Advertising] are to ... limit the time devoted to advertisements.'[111]The only quantitative rule for radio is one which applies where there is only one commercial radio station in a licence area.[112]Since most licence areas in Australia have more than one commercial radio station operating, this rule is of little practical importance.[113]It follows therefore that for most commercial radio stations, advertising time is unrestricted. For television, the limits are more prescriptive. In essence, a licensee may schedule on average no more than 13 minutes per hour between 6pm and midnight and 15 minutes at other times (rule 5.6). There is some flexibility about how these averages are worked out in actual scheduling and specific rules apply to children's television.[114]Sponsorship announcements are not included within these rules provided they do not exceed a specified length.[115]

The rules limiting the amount of advertising which can be broadcast can be seen as a balance between the interests of consumers and advertisers as the following suggests:

Control of advertising involves a trade-off between two competing public interests, namely: minimising the impact of interruptions on consumer satisfaction (but at the same time recognising that there is some benefit from obtaining information); and ensuring adequate revenue flows to licensees to enable financing of programs. Even in the absence of controls, licensees would need to be aware that potential increases in revenue from additional advertisements could be offset by a reduced level of demand for advertisements as a consequence of smaller audiences and/or reduced effectiveness of individual advertisements.[116]

This comment echoes the statement of objectives in the Television Code. Both see the balance between programming and advertising as essentially a consumer issue. However, there is also a wider public interest concern in controlling the amount of advertising, which is related to access to the medium. Freedom of expression values mean that the interests of listeners and viewers in accessing programs have to be recognised and accommodated by broadcasters and advertisers who seek access to maximum advertising airtime. Therefore, there should be a balance between advertising and programming, and between that programming which advertising will fund and that which it is less willing to fund. This need for a balance is recognised by the legislation which includes, as a matter for code attention, the amount of broadcasting time devoted to advertising (s 123(2)(f)). However, the rules are fairly crude. What is notable in the Television Code advertising rules is the lack of discrimination between different types of programs. Apart from children's programming, there is no recognition that it may be appropriate to have different scheduling rules for different types of programs. This type of differentiation could be important as a means of relieving pressure on the broadcaster to use every opportunity to gain advertising revenue. The United Kingdom has rules governing television advertising scheduling and breaks which differentiate between different types of programming. For example, a news or current affairs program of less than 30 minutes duration is prohibited from showing any advertising and there are restrictions on longer news programs.[117]In addition, sponsorship of news and current affairs programs is proscribed.[118]

The rules on the amount of advertising, which can be broadcast by television broadcasting services, appear to be quite generous. Yet, the Productivity Commission has observed that the existing rules are binding, so that without them the amount of advertising broadcast would increase.[119]It needs to be remembered also that the rules are governed by code of practice, the lowest tier of regulatory enforcement.


There is also a risk that the commercial context may influence programming content. This could be through the selection of material or by attempts to camouflage the advertising content so that it appears as programming. The Television and Radio Codes do not address this in detail. The Television Code requires commercials, program promotions and station promotion to be readily distinguishable by viewers from program material (cl 1.11) and cl 1.13 states:

Where a licensee receives payment for material that is presented in a program or segment of a program, that material must be distinguishable from other program material, either because it is clearly promoting a product or service, or because of labelling or some other form of differentiation.

True to their spartan style, the Radio Codes provide only that '[a]dvertisements broadcast by a licensee must: (a) not be presented as news programs or other programs' (Code 3.1). This was one of the code rules which was under investigation by the Radio Inquiry. The Australian regulation can be contrasted with the current UK regime which contains detailed rules, particularly in relation to television, to ensure that there is adequate separation between programming and advertising. Thus, advertisements cannot include, visually or orally, anyone who regularly appears in news and current affairs programs; advertisements cannot be designed so as to resemble actual programs if that would risk confusion to viewers.[120]Program sponsorship is allowed but is closely regulated because of concerns that it may exert inappropriate influence on program content.[121]As noted earlier, television news and current affairs programs and radio news bulletins cannot be sponsored.

The Radio Inquiry provides the most obvious example of how Australian broadcasting practice has failed to keep separate editorial independence and commercial influence. Until the Inquiry, there appears to have been little attention to this principle either in the regulatory design or the monitoring of broadcasting activity. The new program standards for commercial radio are a limited response to the tensions created by the commercial context within which broadcasting operates. There seems to be little appetite for examining more deeply the influence commercial relationships might have on programming and editorial independence, and the degree to which that should be tolerated. It was noted earlier that evidence given during the Radio Inquiry showed how advertisers valued opportunities to disguise their advertising as ordinary programming material.[122]

The Radio Inquiry showed how widespread commercial influence was on radio programming content. The position concerning commercial television is less clear, but there is reason to suspect that here also commercial relationships are influencing content. Media Watch, the ABC program which exposed the commercial relationships subsequently investigated by the Radio Inquiry, has noted examples exhibiting a remarkable coincidence between program subject matter and the contemporaneous spot advertising. For example, a Channel Ten news bulletin broadcast an item reporting that researchers had shown dietary fibre reduced cholesterol levels. The news report mentioned a dietary fibre product, Metamucil. The next advertisement break included an advertisement for Metamucil containing similar information.[123]A Channel 7 news program broadcast an item about a new credit card issued by BankWest. The news item gave details of the interest rate, fees and so forth, and provided comparisons with other credit cards. The following advertisement break included an advertisement for the BankWest credit card with contact details.[124] MediaWatch also referred to a report about germs on Channel Nine's A Current Affair. Not surprisingly, the next break included advertisements for cleaning products, Pine O Cleen and Dettol.[125]Although the broadcasters concerned responded that the connection between these advertisements and program items was coincidental, it is clear that advertisers are seeking these sorts of connections. Media Watch spoke to Henry Tajer of Zenith Media, reputedly the largest media buying agency in Australia, who stated: 'Getting in-show integration [where the line between advertising and program content is blurred] gets [advertisers] value money can't buy.'[126]Media Watch went on to report:

Henry says that the best examples of integration are in television entertainment and drama, but he's optimistic about pushing into News and Current Affairs. [Quoting Mr Tajer]: 'This used to be an area that was pretty tightly protected by stations, and most of the networks like to keep it sponsorship free. But gradually this is changing, and the networks are becoming more flexible than they used to be ... This is a positive thing,because the market has been crying out for more integration.'[127]

This attitude reflects the view taken by those giving evidence at the Commercial Radio Inquiry that having an advertising message incorporated into programming content was of much greater value. There is a certain irony in this. Advertisers seek integration, particularly in news and current affairs, because, one might suggest, such programming appears to offer independence, objectivity and an authoritative voice. Yet, the act of integration is undermining the values sought by advertisers. This is precisely what the ABA was concerned about when it investigated the practices of commercial radio broadcasters. The examples cited by Media Watch appear to be in relation to spot advertising only, but clearly sponsorship may also compromise editorial independence. Given the lack of regulatory attention to this area, the ABA's approach to monitoring and the weaknesses of the regulatory regime, there can be little confidence that news and current affairs programming will be free of these commercial pressures. It is possible that these examples are the exception and commercial influence is not widespread, but there is little in the current regulatory approach which even offers the appearance of independence.[128]Protection of the public interest in news and current affairs programming, if it is to be effective, must take into account the commercial context and its possible impact on content.


Funding broadcasting from advertising revenue may also have another, less obvious, impact. Here the concern is not about separation of advertising and programming, but rather that advertising may influence the way in which news and current affairs is perceived. In an advertising-funded environment, the risk is that news and current affairs programming becomes like any other programming which must deliver the largest audience in order to attract the advertising dollar. As such there may be pressures for news and current affairs programming, particularly the latter, to be trivialised or turned into another form of mass entertainment. This risk may be highlighted when advertising regulation does not discriminate between different types of programs. Talkback radio is often seen as a form of entertainment, but television also is not free of the 'news as entertainment' charge. The Productivity Commission, speaking of broadcasting generally, noted in relation to the BSA objective, s 3(1)(g) that

[e]thical news gathering practices are becoming increasingly important as the lines between news, current affairs, 'infotainment' and entertainment become more blurred. The incentives for broadcasters to achieve ratings can create pressures to compromise ethical practices when pursuing stories.[129]

More recently, the ABA commissioned research relating to news and current affairs production, and its credibility and influence.[130]Part of the research involved surveys of, and interviews with, news producers and media experts. The findings of the research confirm that both news and current affairs on radio and television are affected by their commercial background. Indeed their findings provide some paradoxical results whereby size of audience may not necessarily correspond with degree of influence or agenda setting. News producers identified a number of factors apart from 'newsworthiness' which influenced their work, but ratings and circulation dominated their concerns.[131]The research found that

[h]igh rating television news and current affairs programs commanding top-drawer advertising rates are viewed as influential with the public, but not particularly significant agenda-setters with the media. These include the evening news bulletins, the tabloid evening current affairs programs and 60 Minutes.[132]

Within industry, newspapers and the ABC Radio program, AM, were seen as more important agenda-setters, and influenced the news agenda of the commercial broadcasters.[133]By contrast, the high rating commercial programs were regarded by the news producers as having less credibility, and Channel 9's A Current Affair as the least credible.[134]This is not a surprising result given that the research also found present a general view that the concept of 'current affairs' had been distorted by the commercial broadcasters so that within the television context 'current affairs' constituted 'evening commercial "tabloid", lifestyle, consumer-oriented programs such as A Current Affair and Today Tonight, relaying mixed messages about the definition and credibility of the genre.'[135]Amongst the news producers and other media experts, commercial radio news and current affairs (talkback radio) was regarded as the least credible medium.[136] However, most of those interviewed for the research acknowledged that talkback radio had become more influential, because it was able to attract 'important news-breaking exclusive guests' and because the programs were seen as an indicator of community views.[137]It should also be remembered that because of extensive syndication these talkback programs will reach a much wider audience than the licence area for the originating radio station. Citing earlier research the Bond Report noted that John Laws 'reached 90 per cent of all Australian markets on weekdays'.[138]

The other part of the research focused on the users of news and current affairs. Not surprisingly, free to air television was the most used source for news and current affairs. National Nine News was the preferred program although the ABC (Television) News was viewed as the most credible.[139]However, whilst there was a general belief

in the credibility of Australian news and current affairs, many felt that these services were not as credible as they should be.[140]Users considered media's business interests as having the greatest influence on the content of news and current affairs, and many were concerned over sensationalised reporting.[141]

Although there may be other contributing factors, it is reasonable to conclude that advertising income is likely to have an impact on the production of news and current affairs programming and the selection of its content. The Bond Report noted the view expressed in its research based on those involved in news and current affairs production 'that the content of both [television] news and current affairs was targeted at the lowest common denominator of audience interests, prompted by audience research on popular topics.'[142]There is a tension then between those who produce the programming and those who make use of these services. Whilst those within the industry may lament the type of news and current affairs which results from commercial pressures, it can be argued in response that what is being produced is what the audience wants, at least if ratings are to be the measure.[143]Further, it could be argued that if something more was being sought then this is offered by the public broadcasters. However, this may be an inadequate response. It is generally accepted that one of the rationales for broadcasting regulation is to compensate for the market failure caused by an advertising-funded system. Australian television content quota requirements are an example of regulation correcting market failure. Similarly, audience ratings are not a complete measure of whether or not a broadcasting system is operating effectively. A community may require the protection of certain values which the market cannot provide. This can be seen again in the example of Australian content. Without such regulation, commercial television may rely on an almost complete diet of imported programs which can be obtained much more cheaply compared with locally produced programs. Equally, such programs may be successful in terms of audience size. However, another value may be at work here. BSA objective, s 3(1)(e), makes clear that there may be value in having broadcasting services develop and reflect 'a sense of Australian identity, character and cultural diversity'. This may not be achieved in a market model, and so regulation is provided to correct this. In the same way, news and current affairs may be an element of programming which the community accepts should be treated differently from other programming.[144]The importance of broadcasting in informing the community about the world means that one may want to ensure that it is protected from the exigencies of commercial funding. Of course, in part this is addressed through structural regulation: the availability of differently established and funded services, such as public and community broadcasting to offset the deficiencies of the commercial market model. Yet, as has already been argued, this may not be enough; first, because it relies on the other types of broadcasting services to be sufficiently structured and resourced; and secondly, because it is desirable to build in as much diversity as possible by ensuring that all services are able to make a serious contribution to news and current affairs programming.

Hence more may be needed. It is clear that the importance of news and current affairs is recognised by the regulatory framework. However, the question is whether these objectives are adequately reflected in the regulatory design. The Productivity Commission concluded that responsibilities for ethical news gathering and fair and accurate reporting were too important to be left to the co-regulation system and should be made conditions on licences.[145] But the commercial context in which these programmes operate needs also to be addressed. More finely-tuned regulation of advertising may help to create a protected zone for news and current affairs reporting so that it is less subject to rating and audience size pressures.[146]

Despite the apparent popularity of commercial news and current affairs reporting and talkback radio, there is evidence that Australian audiences are conscious of the need for something different. At the conclusion of its research, the Bond Report made the following observation:

one might infer from the totality of findings presented herein that what both audiences and providers want in news and current affairs content is not traditional hard news; nor do they find desirable the recent formulation of questionable current affairs content. Indeed, both audience and industry are seeking a new formula, one that will meet the needs of public policy and the public good; and no doubt, one that will enrich the news and current affairs organisation that introduces and dominates it.[147]

The Bond Report was published prior to the events of September 11 2001. It has become apparent that those events and their ongoing consequences may be having an effect on broadcasting audiences. Early in 2003 it was reported that audiences for public broadcasting news and current affairs services had increased, whilst Channel 9 was aware that viewers for its current affairs services were falling. It was also reported that Channel 9 proposed to change the usual current affairs diet, replacing it with more serious content.[148]This may be an indication that when the public considers there are important matters affecting the national interest, it will seek out the news and current affairs which reflect this importance. It is crucial then that the public is able to access a variety of such reporting.


It has been argued that there is a public interest in news and current affairs broadcasting to be maintained and protected. Whilst this is recognised in broadcasting's regulatory underpinnings, the regulatory design provides only limited mechanisms for that protection. If there is to be adequate realisation of that public interest then it is necessary for the regulatory design to accommodate the way in which different aspects of the broadcasting environment interact with and impact upon each other. The Radio Inquiry offers no comfort; it is apparent that there are continuing causes for concern, and there can be little confidence that under present regulatory arrangements there will be any sea change in commercial broadcasters' behaviour and attitudes.

Change will only be effected through a re-examination of the broadcasting environment and a restructuring of broadcasting regulation, but the Government seems to have little appetite for this sort of engagement. And yet there is material available for reflection. This article has cited the investigation of broadcasting conducted by the Productivity Commission and completed in 2000; an investigation commissioned by the Government. The investigation was a comprehensive and lengthy study encompassing all aspects of broadcasting regulation. There has been no considered response by the Government to the Commission's Report; apart from brief reference to the Commission's Report in the Government's proposals for reform of media ownership rules, the Report has otherwise been ignored. Equally, the Radio Inquiry in its Final Report raised a number of matters for further consideration and legislative change. This too appears to have produced no Government response. It is indicative of the current state of broadcasting policy-making that the Government feels able to ignore these deliberations. Reference was made earlier to the possibility that broadcasting could become irrelevant to the democratic process, the public space offered by broadcasting reduced to a marketplace. There are signs that Australian commercial broadcasting is travelling down this path; the likelihood being that its role in public discourse will become increasingly marginalised or discredited. Perhaps this very scenario might explain the Government's complacency; a bland and toothless media might present a comforting image to government, whatever its political complexion.[149]If this is so, then the case for ensuring the protection of the public interest is even more pressing.

[*] Faculty of Law, University of New South Wales.

[1]Referred to as 'the Inquiry', 'the Radio Inquiry' or 'the Commercial Radio Inquiry'.

[2]In early 2002, Alan Jones moved to another Sydney radio station 2GB.

[3] Australian Broadcasting Authority, Commercial Radio Inquiry: Final Report of the AustralianBroadcasting Authority (August 2000) ('Final Report'). The ABA had already published reports at the end of the investigations of each of the radio stations: Australian Broadcasting Authority, Commercial Radio Inquiry: Report of the Australian BroadcastingAuthority Hearing into Radio 2UE Sydney Pty Ltd (February 2000) ('2UE Report'); Australian Broadcasting Authority, Commercial Radio Inquiry: Report of the Australian BroadcastingAuthority Investigations into 3AW Melbourne, 5DN Adelaide and 6PR Perth (August 2000).

[4]Australian Broadcasting Authority, Annual Report 2000–2001 (2001) 10.

[5] ABC Television, 'ABA "Active Monitoring"', Media Watch, 28 October 2002 <> at 19 January 2003.Media Watch has also alleged that John Laws has failed on occasions to disclose his commercial relationship with NRMA Insurance Ltd when commenting on that company: ABC Television, 'Laws & NRMA Insurance', Media Watch, 28 October 2002 <> at 19 January 2003. The ABA did not announce a formal investigation into this matter but Radio Station 2UE later admitted that there had been on three occasions a failure to disclose the commercial relationship between Laws and NRMA Insurance: Australian Broadcasting Authority, Investigation into Radio 2UE Sydney Pty Ltd Sponsorship of Mr John Laws by TelstraCorporation Ltd and NRMA Insurance Ltd, Investigation Report (November 2003) 38.

[6] Australian Broadcasting Authority, 'ABA Investigation into Telstra Commercial Arrangements' (Press Release, NR 131/2002, 11 November 2002). The ABA found that the licensee of Radio Station 2UE had breached the program standards and licence condition which had been imposed as a result of the Radio Inquiry in relation to the commercial arrangements between Telstra and John Laws. The ABA announced that it would refer the matter to the Director of Public Prosecutions and impose a new licence condition requiring Radio Station 2UE to engage an independent third party to monitor the John Laws program: Australian Broadcasting Authority, 'ABA to refer 2UE Breaches of Disclosure Standard to DPP' (Press Release, 4 December 2003). However, since that announcement, it appears no further action has been taken: ABC Television, 'Laws and Chutzpah', MediaWatch, 8 March 2004 <> at 3 April 2004.

[7] Australian Broadcasting Authority, Terms of Reference for Investigation by the ABA into theDisclosure of Commercial Agreements involving Telstra Corporation Limited, 7 November 2002. It should be noted that there is apparently no direct contractual relationship between Alan Jones and Telstra. However Telstra does have a commercial arrangement with Radio Station 2GB and Alan Jones, through a family company, has an equity interest in the company which controls Radio Station 2GB (and another Sydney radio station 2CH). In April 2004 the ABA announced that it had found no breaches of the program standards in relation to Telstra's commercial agreement with Radio Station 2GB. Inter alia, the ABA found that Jones was under no obligation to disclose this commercial arrangement because he was not a party to the agreement: Australian Broadcasting Authority, 'ABA finds no breaches in Telstra sponsorship of the Alan Jones Program on 2GB Sydney' (Press Release, 5 April 2004). The decision has occasioned considerable criticism: ABC Television, 'Does the ABA have the ticker', Media Watch, 19 April 2004 <> at 22 April 2004.

[8]BSA s 14.

[9] BSA s 4(1).

[10] For a discussion of the concept of influence and its role in broadcasting legislation, see Productivity Commission, Broadcasting, Report No. 11 (2000) ('PC Report') 447–9. The PC Report is the outcome of a comprehensive inquiry into broadcasting conducted in 1999– 2000. Despite its extensive recommendations, the Government has made no substantive response to the Report.

[11] The ABA is empowered under s 43 (with respect to commercial broadcasting services) to impose additional licence conditions upon a licensee. Some guidance as to the scope of this power is given under s 44. (Equivalent powers apply to other licensed services.) One outcome of the Radio Inquiry was the imposition of two new conditions on Radio 2UE relating to disclosure of commercial agreements and the separation of program and advertising matter.

[12]BSA s 147.

[13] BSA s 139. However, only sch 2 conditions fall within s 139. Breach of conditions imposed by the ABA (additional conditions) only empowers the ABA to issue a notice directing compliance (s 141), breach of which constitutes an offence. Breach of all licence conditions can result in suspension or cancellation of the licence: BSA s 143.

[14]BSA s 123.

[15]BSA s 123(2)(d).

[16] The commercial television code, Commercial Television Industry Code of Practice (April 1999)('Television Code') has been developed by the industry body, Commercial Television Australia Ltd ('CTVA') (formerly known as the Federation of Australian Commercial Television Stations ('FACTS')) and the commercial radio code, Commercial Radio Codes ofPractice and Guidelines (October 1999) ('Radio Codes') has been developed by the industry body for radio, Commercial Radio Australia Limited ('CRA') (formerly known as the Federation of Australian Radio Broadcasters Limited ('FARB')).

[17]PC Report, above n 10, 450–1.

[18]BSA s 148.

[19]Under BSA s 44 for commercial radio and television broadcasting services.

[20]BSA s 125.

[21]BSA pt 13, divs 2 and 3.

[22]BSA s 158.

[23] For a detailed account of the Radio Inquiry and the background to it, see Rob Johnson, Cashfor Comment: The Seduction of Journo Culture (2000).

[24]Final Report, above n 3, 14.




[28] The ABA similarly examined commercial agreements of the presenters of the other radio stations under investigation.

[29] 2UE Report, above n 3, 33.

[30]Ibid 33–4.

[31]Ibid 32.


[33]Ibid 33.

[34] Ibid 34: fax from Mr Stephen Woodhill, National Media Manager, Optus to Mr JamesThane, Harry M Miller & Company Management dated 24 March 1999.




[38] See, eg, the 2UE Report, above n 3, 38, in connection with the Optus commercial agreement and at 41 in connection with the Walsh Bay Finance commercial agreement. These mentions would still usually follow the scripts or talking points provided by the commercial interest.

[39] Agreement with Australian Trucking Association (formerly the Road Transport Forum),ibid 54.

[40] Agreement with Star City. This obligation was subject to Laws being satisfied that the matter for comment was entertaining or newsworthy, ibid 62.

[41] Agreement with the Australian Bankers' Association, ibid 49.

[42]Ibid 47.

[43]Ibid 152.


[45]Ibid 138–9.

[46]Ibid (emphasis in original).

[47]Ibid 314–15. As part of the arrangements Laws even received a memo entitled 'Script for Unscripted Call to Laws'.

[48]Ibid 51.

[49]See ibid 319–34 for these and other examples.

[50] Ibid 139. The arrangements between Laws and the Bankers' Association also appeared to require Laws to cease making negative comments about the banks when doing live reads for RAMS Home Loans Pty Ltd. However, both Laws and a director of RAMS gave evidence that RAMS had intended to reduce criticism of the banks: at 139–40.

[51] Final Report, above n 3, 17 quoting from the superseded Australian Broadcasting Tribunal Radio Program Standard 8.


[53]Ibid 18.


[55] Ibid 44. Many of the comments made by the radio presenters actually came from material supplied by the commercial interests.


[57] 2UE Report, above n 3, 25–6.

[58] 'Political matter' is defined in cl 1, but somewhat tautologically: 'political matter means any political matter, including the policy launch of a political party.' The ABA has guidelines which further explain this concept: Australian Broadcasting Authority, Guidelines for theBroadcasting of Political Matter (1998).

[59] Above n 3, 81–9. In relation to four broadcasts made on behalf of the Registered Clubs Association, the ABA was unable to determine finally whether the BSA had been breached because of the lack of a complete transcript, although it was apparent from the summaries available for each of these broadcasts that no required particulars had been given. Whilst the ABA considered that there had been non-compliance it was unwilling to proceed to a determination without access to a transcript: 2UE Report: at 82–6. The lack of transcripts was due to the age of the broadcasts.

[60]Ibid 82, 86–9.

[61]Ibid 86–8.

[62]Final Report, above n 3, 56.

[63] Ibid.

[64]See generally, 2UE Report, above n 3, schs 13 and 14.

[65]Ibid 354–6.

[66]See section titled, 'Regulatory Framework'.

[67] Australian Broadcasting Authority, 'ABA Imposes Conditions on 2UE Licence' (Press Release, 21 March 2000).

[68]Final Report, above n 3, 5.

[69]See text at nn 3–7.

[70] Australian Broadcasting Authority, 'Extension of Commercial Radio Standards' (Press Release, NR 3/2003, 3 February 2003).


[72]Final Report, above n 3, 89.

[73] Eric Barendt, Broadcasting Law: A Comparative Study (1993) 34 and, see generally, ch 2. It is accepted that freedom of communication will involve the freedom to access other types of programming, eg, entertainment. However, for the purposes of this discussion the focus is on freedom to access information.

[74] Of course this begs the question as to why there should be differential regulatory treatment of broadcasting and the press. The reasons for this differential treatment have been well-rehearsed in the academic literature, although not satisfactorily resolved: see, eg, Barendt, above n 73, 3–10. Whether the different treatment can be adequately justified, the fact remains that broadcasting is subject to specific regulation. Indeed the question to be addressed may be why the press is not regulated more closely. For an excellent discussion of this within the American context see Judith Lichtenberg, 'Foundations and Limits of Freedom of the Press' in Judith Lichtenberg (ed), Democracy and the Mass Media (1990) 102–35.

[75] Commonwealth, Parliamentary Debates, Senate, 4 June 1992, 3599 (Robert Collins, Minister for Transport and Communications).

[76]Explanatory Memorandum, Broadcasting Services Bill 1992 (Cth) 10.

[77] See Jürgen Habermas, The Structural Transformation of the Public Sphere: An Inquiry into aCategory of Bourgeois Society (1989); Jürgen Habermas, Between Facts and Norms: Contributionsto a Discourse Theory of Law and Democracy (1996), especially ch 8. Habermas' notion of the 'public sphere' has been the subject of much debate but it has nevertheless had a strong influence in discussions on the justification of media regulation. If free and informed public discourse is seen as essential to the democratic process, then the structure of media and its place in that discourse cannot be ignored. For a useful discussion of the tension between the normative principles of the 'public sphere' and its historical concrete elements, and a review of the criticisms of Habermas' theory see Peter Dahlgren, Television and the PublicSphere: Citizenship, Democracy and the Media (1995) 7–11 and generally. See also Nicholas Garnham, 'The Media and the Public Sphere' in Peter Golding et al (eds), CommunicatingPolitics: Mass Communications and the Political Process (1986) 37; Jean L Cohen, 'The Public Sphere, the Media and Civil Society' in András Sajó and Monroe E Price (eds), Rights ofAccess to the Media (1996) 29. These issues are discussed also by Monroe E Price, Television,The Public Sphere, and National Identity (1995) 24–8.

[78]Price, above n 77, 27.

[79] Ibid 28, in turn quoting from Jean L Cohen, 'The Public Sphere, the Media and Civil Society' in András Sajó and Monroe E Price (eds), Rights of Access to the Media (1996) 29.

[80] A recent exception to this is the decision of the ABA to impose a licence condition on several regional commercial television licensees requiring them to broadcast material of local significance to each local area within their licence areas.

[81] Wolfgang Hoffmann-Riem, Regulating Media: The Licensing and Supervision of Broadcasting inSix Countries (1996) 283 and see generally 283–4.

[82] Of course this only truly applies with respect to the ABC. The Special Broadcasting Service (SBS) relies in part for its funding on advertising and sponsorship.

[83] Apart from financing, other factors may also be relevant such as the degree of independence the public broadcaster is allowed.

[84]Price, above n 77, 24.

[85] The UK regime is undergoing substantial reform. In July 2003, the Communications Act 2003 (UK) c 21 became law. The relevant regulatory bodies, including the Independent Television Commission and the Radio Authority will be replaced by a new regulator at the end of 2003, the Office of Communications (Ofcom). New program codes will be developed although for the meantime existing codes will continue. It is likely that there will be a move from the existing close regulatory scrutiny to greater reliance on industry regulation, although Ofcom will have statutory enforcement powers. It is open whether the degree of detail in current programme regulation will remain. However, many of the UK rules are required under European Community law and therefore it is unlikely that the UK with its tradition of detailed program regulation and its EC obligations will abandon completely its current approach.

[86] Andrew Graham, 'Public Policy Issues for UK Broadcasting' in Steven Barnett et al (eds), E-Britannia: The Communications Revolution (2000) 93, 94.

[87]Ibid 93–9 and generally.

[88]PC Report, above n 10, 451.


[90] There is no fixed understanding of 'co-regulation'. Both co-regulation and self-regulation can have different meanings: see Robert Baldwin and Martin Cave, UnderstandingRegulation: Theory, Strategy, and Practice (1999) 133 and, generally, ch 10. See also Robert Baldwin, Colin Scott and Christopher Hood (eds), A Reader on Regulation (1998) 27–8.

[91] Obviously, the Radio Inquiry was only concerned with commercial radio's codes of practice but the codes which have been developed for other industry sectors do not differ significantly in this regard.

[92] PC Report, above n 10, 453. A Senate Inquiry into Communications self-regulation also referred to criticisms of the lack of pro-active monitoring and enforcement in relation to television: Senate Select Committee on Information Technologies, Commonwealth Parliament, In the Public Interest: Monitoring Australia's Media (2000) [3.60].

[93] An exception to this would seem to be the ABA's recent investigation into the broadcasting of matters of local significance. This arose as a result of several commercial television licensees closing their local news bureaux: Australian Broadcasting Authority, 'ABA Requires Increased Broadcast Material of Local Significance', (Press Release, NR 152/2002, 17 December 2002).

[94]PC Report, above n 10, 453.

[95] But, as the Productivity Commission noted, has seldom been used: ibid.

[96]BSA s 148.

[97]Final Report, above n 3, 101–6.

[98]PC Report, above n 10, 453.

[99]Final Report, above n 3, 101–6 and PC Report, above n 10, 477–9.

[100] See BSA ss 47 and 41(2) in relation to commercial radio and television licensees. Similar provisions apply to categories of broadcasting services which hold individual licences. Class licences (applicable to narrowcasting services and subscription radio broadcasting services) continue indefinitely.

[101]Final Report, above n 3, 74–8.

[102] The Communications Law Centre, in a submission to the Inquiry, also suggested that the lack of detail in the Codes may have contributed to the indifference to the ethical standards of the Codes: Communications Law Centre, Submission on the Final Report of the AustralianBroadcasting Authority Commercial Radio Inquiry (September 2000) [2.1.1].

[103]PC Report, above n 10, 458.

[104]Ibid 460–1.

[105] Community broadcasting services are allowed to broadcast sponsorship announcements but not advertisements: BSA sch 2, cl 9(1)(b). Subscription broadcasting services and subscription narrowcasting services are allowed to raise advertising revenue, but subscription income has to be the predominant source of revenue: BSA sch 2, cls 10(2) and 11(2) respectively. The public broadcaster, the Special Broadcasting Service, is allowed limited advertising and sponsorship: Special Broadcasting Service Act 1991 (Cth) s 45.

[106] Some advertisers may be more interested in small audiences which may represent particular interest or income groups, but as the Productivity Commission points out commercial media operators 'have to seek a balance between the cost and revenue generated from targeting smaller niche audiences and those generated from attracting large, more diffuse audiences.': PC Report, above n 10, 136.

[107] United Kingdom, Report of the Committee on Financing the BBC, Cmnd 9824 (1986)

[421]. See also the PC Report, above n 10, 94 for similar observations.

[108]Tim Congdon et al, Paying for Broadcasting: The Handbook (1992) 189.

[109] Hoffmann-Riem, above n 81, 46. Although Hoffmann-Riem's analysis suggests that there is no continuing role for regulation in the US media context, there is ongoing debate about the role of media regulation and the maintenance of the public sphere. See, eg, Monroe E Price, 'An Access Taxonomy' in Sajó and Price, above n 77, 1, 22–6 and generally; Cass R Sunstein, 'Television and the Public Interest' (2000) 88 California Law Review 499, 504 and generally.

[110]Television Code cl 5.1.

[111]Radio Codes, Code of Practice 3: Advertising.

[112] Ibid cl 3.2. Even this is quite generous: 'the licensee ... must not broadcast more than 18 minutes of advertisements in a period of an hour.'

[113]PC Report, above n 10, 140.

[114] For example, there is scope under cl 5.7 for a broadcaster to increase the amount of advertising to 15 minutes per hour between 6pm and midnight, provided that the average is maintained and certain other limits are met.

[115] Television Code cl 5.5.4. To be exempt from the scheduling rules, it must also omit reference to the price of goods or services and it must be clear to the viewer that there is a sponsorship arrangement between the sponsor and the program.

[116] Bureau of Transport and Communications Economics, Economic Aspects of BroadcastingRegulation, Report No 71 (1991) 103.

[117] Independent Television Commission, Rules on Amount and Scheduling of Advertising(December 1998) rule 3.2(viii).

[118] Independent Television Commission, Code of Programme Sponsorship (Autumn 2000) rules 8.1 and 8.2. Sponsorship of radio news bulletins and 'any news desk presentation' are also proscribed: Radio Authority, Advertising and Sponsorship Code (December 2000) rule 3.8(a).

[119] PC Report, above n 10, 137.

[120] Independent Television Commission, Advertising Standards Code (September 2002) rule 2.1.2.

[121]Eric Barendt and Lesley Hitchens, Media Law: Cases and Materials (2000) 225.

[122]See text at n 44.

[123] ABC Television, 'Advertising Gets Integrated', Media Watch, 2 September 2002 <> at 19 January 2003.





[128] Whilst noting in its submission to the Radio Inquiry that no specific allegations had been made about commercial television, the Communications Law Centre observed: 'it is clear that many of the same commercial pressures are alive in ... [the television] industry and that it is a similarly influential medium. ... Most importantly, the public should not have to wait for programs like "Media Watch" to uncover deception ... before appropriate standards are imposed': Communications Law Centre, above n 102, [4.5].

[129]PC Report, above n 10, 457.

[130] Centre for New Media Research and Education, Bond University, Sources of News and Current Affairs (May 2001) ('Bond Report').

[131]Ibid 7.

[132]Ibid 9. See also at 90–117.

[133]Ibid 9 and 116.

[134]Ibid 48.

[135] Ibid 205–6. See also at 57 and 107–9. The Bond Report also noted that 60 Minutes, which many of those interviewed put into the category of 'tabloid current affairs', commanded the highest advertising rates for regularly programmed commercial television: 108.

[136]Ibid 48.

[137]Ibid 208–9.

[138] Peter Collingwood, Commercial Radio since the Cross-Media Revolution (1997) 16, cited in Bond Report, above n 130, 163. See generally Bond Report, above n 130, 162–70.

[139]Bond Report, above n 130, 330, 335 and 351.

[140]Ibid 378.


[142]Ibid 107.

[143] As already described, the Bond Report shows that listeners and viewers whilst using these services may not be completely satisfied with them.

[144] Research published in the UK recently has shown that television viewers regard news as the most important program genre, both personally and as an element of public service broadcasting: Independent Television Commission and Broadcasting Standards Commission, 'Viewers Say News is the Public Service Priority, According to ITC and BSC Research' (Press Release, 12 March 2003).

[145]PC Report, above n 10, 461.

[146] See, eg, the text at nn 116–18 describing the UK approach which differentiates between programs in structuring advertising and sponsorship regulation. But, as argued in this article, such a measure alone would not be sufficient; the regulatory process must also be addressed.

[147] Bond Report, above n 130, 378–9.

[148] See David Dale, 'Calling Ray: it's time for Nine to get serious', Sydney Morning Herald (Sydney), 26 January 2003, 3; and 'Munro's Affair Over', Sydney Morning Herald (Sydney),25–6 January 2003, 6.

[149] See also generally Price, above n 77.

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