Political Economy - Sent to subscribers - June 21st, 2000

The Australian Senate is preparing this week to debate the Broadcasting Services Amendment (Digital Television and Datacasting) Bill, so it may be worth keeping a close eye on the digital television issue as to what the government will allow regarding datacasting. The government is attempting to stop potential datacasters from becoming de-facto broadcasters by not allowing video and audio streaming. The three potential datacasters have pulled out of trial testing due to the strict rules the government has placed on it. No surprise then that the government is now reviewing the rules and definitions to datacasting in the hope to sway back the testing.

Keep an eye on the charts of the three potential datacasters and see how they are effected by the upcoming news announcements. They are:-

Newscorp
Telstra

The outcome of government decisions here will determine which media barons support which political party at the next election. History repeating of course, cause it's the exact same process that Kerry's father Frank went through in the 1950's with the then new technology of television. (James flew to Canberra yesterday especially to meet the Prime Minister.)

Politicians only stay in power by serving the vested interests, so this stoush will be monumental.

Ronnie Reagan's view, of his government's view of the economy, comes to mind for me here; " If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it."

Finally, to help you understand the debate; (culled form various sources)

TV versus the Net
We've been looking forward to playing with the internet on our TV for years. We've heard about digital TV and it all makes great sense: Why not just flick over from the sports broadcast to the player stats ? We have the technology, so what's the hold up? Well. the existing broadcasters think they should be the only ones who can add this sort of programming to the new free-to-air spectrum. Under is scenario, new datacasters - likely to include Fairfax's subsidiary F2, APN news & media, NTL/TVSN and online media to name a few - wouldn't be allowed to play this game.

Draft legislation along these lines - called the Broadcasting services Amendment Bill - is to be introduced into federal parliament this month. And if it succeeds, datacasters would be blocked from becoming back door broadcasters. They couldn't look anything like a TV station and would be limited to 10 minutes of video per half hour. What's more, internet access could be limited to e-mail and hosted web pages.

And where does this leave broadband cable providers such as Telstra Advanced and Optus@Home and pay TV services such as Foxtel, Optus and Austar? The legislation doesn't cover that as yet - so the TV (with a set-top box) could still become your main internet access machine but you'd have to pay for it. All the TV stations have plans to move into online content - probably through joint ventures.

Some definitions;

Enhanced programming is additional data content sent with a TV broadcast. It has to be directly linked to an existing TV program and only existing free-to-air TV stations are allowed to do it.

An Internet portal is a web site which can have news, and other information in text, pictures, video and audio. It's accessible over the regular internet - meaning you only need a modem or a network internet connection to see it.

Broadband is an ultra-high speed connection to the internet via cable or satellite.

Datacasting is sending digital information - text, pictures, audio and video - over the new free-to-air digital spectrum. Anyone can apply for a licence, but it costs. Trials are starting this month.

Multi-channelling is simple providing more than one channel in the same television space. Pay TV providers already do this and under the proposed legislation, the national public free-to-air stations will be permitted to as well.

A comment from phil
This Liberal Party legislation really shows you who runs this country, and it aint politicians. The public simply don't understand the legislation, nor do too many of us show much interest in wanting to. This is a great shame. Once the legislation passes, it will most likely further retard development of what could have been even better new technology; the internet, and yet further entrench the monopoly power of our richest man. How so few people see this is beyond me

Any reversal of this legislation will be known first by company insiders, which will then show up in the relevant charts. Watch closely. Prices will move before any announcements are made public.

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