Application is made under section 55 of the Disability Discrimination Act 1992 (Cth.) (the Act) for an exemption from s 24(1) of the Act in respect of the supply and broadcasting of subscription television programming where that programming is supplied or broadcast without closed captioning.
Except for the following definitions, terms have their generally accepted meanings:
The Australian Subscription Television and radio Association (ASTRA) and each of its members as listed below:
AUSTAR United Communications
Australian News Channel Pty Limited
BBC World Distribution Limited
Bloomberg LP
Business News (Asia) Private
Crown Media International, Inc
Discovery Networks Asia
ESPN Inc
FOXTEL Management Pty Limited on behalf of the FOXTEL Partnership and FOXTEL Cable Television Pty Limited
Movie Network Channels Pty Ltd
NGC-UK Partnership
Nickelodeon Australia Management Pty Ltd
Continental Programming Australia LP
OPTUS Vision Pty Ltd
Pan TV Ltd
Premier Media Group Pty Ltd
Sky Channel Pty Limited
Telstra Media Pty Limited
The Disney Channel (Australia) Pty Limited
The Premium Movie Partnership
Turner International Asia Pacific Ltd
TV1 General Entertainment Partnership
TV Shopping Network Ltd
UKTV Pty Ltd
XYZ Networks Pty Ltd
(together “the Applicants”)
The supply and broadcasting of subscription television programming and related services.
Debra Richards
Executive Director
Australian Subscription Television and Radio Association
Wharf 8
Pyrmont NSW 2009
The supply and broadcasting of all subscription television programming undertaken by the Applicants.
This application is for an exemption pursuant to section 55 of the Act such that the Applicants are exempt from the operation of section 24(1) of the Act until 31 December 2008 in respect of the supply or broadcasting of subscription television programming where that programming is supplied or broadcast without closed captioning.
The reasons why an exemption should be granted include:
why immediate compliance with the Act is not possible or should not be required (including details of financial hardship that would be caused);
An exemption should be granted for the following reasons:
a. Subscription television is a start-up industry that has not yet reached profitability
The subscription television industry is not currently a profitable industry. The investment risk in the industry is high. Over $8 billion has been invested in the subscription television industry and related infrastructure in Australia since its introduction in January 1995 and none of the subscription television operators has reached profitability.
The subscription television industry is the most regulated start-up business in Australia. Subscription television was prohibited in Australia until 1992 in order to protect the commercial Open broadcast sector and could not begin until 1995. Even on introduction, the Industry has been subjected to a high degree of regulation including no advertising being allowed to be carried until July 1997 and prohibitions on content including the most stringent sports anti-siphoning rules anywhere else in the world.
The Industry is still in an early stage of development in terms of its financial sustainability and its penetration of available homes, more so in respect of the development and provision of digital services which will be subject to a new stage of start-up investment in 2004.
b. Differences between subscription television and Open broadcasting
There are critical differences between Open broadcast television and subscription television which underpin much of the rationale for the imposition of closed captioning transmission quotas on Open broadcast television. Unlike the subscription television sector, the Open broadcast television sector is in the privileged and advanced position of:
- having been given exclusive access to the scarce and valuable public broadcast spectrum in order to generate private income;
- obtaining close to universal access to Australian homes through the use of the public spectrum resource, and as such plays a ubiquitous role in influencing Australian community views; and
- for the commercial TV broadcasters, continuing to enjoy a protected oligopoly with the legislative prohibition on a fourth commercial licence until 2007.
Furthermore, Open broadcasters have a single Channel to caption and have had more than 47 years in business to achieve current captioning levels of around 43%.
By contrast, the subscription television sector:
- exists as a result of the private investment by industry participants in the assets and infrastructure necessary to deliver the services to consumers, including analogue cable and satellite transmission and reception facilities; and the deployment by subscription television providers of reception equipment needed by consumers which includes set top units;
- penetrates only 23% of Australian homes; and
- provides a service which is wholly optional for consumers.
Furthermore, the subscription television operators currently broadcast between 47 and 53 Channels that are owned and operated by over 40 different businesses and broadcast programming on each Channel over a 24 hour period.
c. Bandwidth costs and retransmission of Open broadcast captioning
Unlike the Open broadcasters, which the Government has provided with exclusive use of publicly-owned broadcasting spectrum at no additional charge for the provision of digital television services, the bandwidth used by subscription television broadcasters is privately funded.
Both Open broadcasters and subscription television broadcasters require additional bandwidth in addition to that required for the existing service, to broadcast closed captions.
If additional bandwidth is required to support captions, subscription broadcasters face a cost over and above the costs faced by Open broadcasters due to the multi-channel environment in which subscription television operates.Bandwidth facts:
- Bandwidth is a commodity like electricity and telephony that comes at a significant cost.
- Telstra and OPTUS have collectively invested more than $4 billion building their cable networks to create bandwidth.
- OPTUS has invested approximately $500 million deploying its C1 satellite which provides bandwidth that is being leased by FOXTEL and AUSTAR to distribute expanded digital subscription TV services in 2004.
- Subscription television providers including AUSTAR, FOXTEL, Neighbourhood Cable, OPTUS, and TransACT pay for all the bandwidth used to distribute their services, either by leasing it (AUSTAR, FOXTEL) or by building it (Neighbourhood, OPTUS, TransACT).
- For satellite, bandwidth capacity (suitable for direct to home services) is a finite resource which cannot be easily expanded without significant investment by a third party satellite operator.
- For cable, in the initial elimination period (when both analogue and digital services are being broadcast), bandwidth is particularly finite. It is also subject to an access regime.
d. Subscription television operators and content providers are making substantial investments in Digital systems
FOXTEL has undertaken a $600 million project to migrate to a full digital cable and expanded satellite service increasing channel choice and introducing interactive services.
Other Platforms such as AUSTAR and OPTUS are making investments to upgrade services. Content providers are similarly investing heavily so that they may best utilise the opportunities offered in the digital landscape.
Within this context, investments in captioning therefore need to be phased in on an incremental basis in order to enable a sustainable and stable long term future for the Industry and the services it provides.
e. New visual and text-based digital services will provide equivalence of access for all subscribers, regardless of hearing ability
The new FOXTEL digital platform, together with AUSTAR’s digital platform, will increase the breadth and depth of subscription television offering and will add a text-based digital Electronic Program Guide (EPG) and will offer subscribers a host of services including multi-camera sporting coverage and enhanced news and information services which are both text-based and visual in nature.
Overall these products and enhancements will improve the entertainment options for all Australians and provide equivalence of access for Deaf and hearing impaired subscribers.
f. Mandated Digital Access regime
FOXTEL is subject to a Digital Access regime, offered by FOXTEL and approved by the Australian Competition and Consumer Commission (ACCC) in December 2003. This regime provides for FOXTEL to give third parties independent access to its digital cable platform. As such, FOXTEL has no control over the programming content, including captioning levels that any independent Channel Providers may broadcast over the digital network under this Digital Access regime.
The FOXTEL Digital Access Agreement (DAA), and the allied agreement from Telstra for access to its cable network, will allow third parties to independently use FOXTEL’s digital platform to supply digital subscription TV services to FOXTEL’s subscribers through FOXTEL’s digital STUs. There is provision for 24 digital channels by Telstra on its cable network for access seekers under the first phase of the regime and significantly more in the second phase after all existing analogue customers have migrated from analogue to digital delivery.
The Open broadcasters, by contrast, are not subject to any such access regime and directly control all content, including captioning, on their services.
g. Carriage of Open Broadcast captioned programming on FOXTEL digital
FOXTEL has put proposals to each of the Open broadcasters in order to retransmit to all subscribers to its planned new digital services, the primary digital television services of the ABC, SBS, Seven Network, Nine Network, and Ten Network – including the captioning contained in all those Open broadcast transmissions. FOXTEL has concluded digital retransmission agreements with the Nine Network, and with SBS, that will include carriage of those captioned services. FOXTEL is in negotiations with the Seven and Ten Networks aimed at reaching agreement to retransmit each of the networks’ primary digital television services, including captioning, on the FOXTEL digital cable and satellite platform.
FOXTEL has an agreement with the ABC to retransmit up to five ABC standard definition digital Channels on the planned FOXTEL digital cable service.
FOXTEL’s retransmission proposals require the Open broadcasters to bear none of FOXTEL’s costs. The Open broadcasters need only pay for the satellite bandwidth they will use – as they pay for other utility services such as telephony.
The ACCC in a media release on 3 October 2003 supported FOXTEL’s Open broadcast retransmission proposals as being in the public interest.
h. Subscription television is an optional service
Subscription television is a wholly optional service which consumers may or may not choose to purchase. Subscription television in Australia currently penetrates 23% of homes and accounts for 14-15% of total television viewing.[1] The Open broadcasters have universal access to consumers in almost 100% of Australian homes.
i. In a multi-channel environment captioning costs are potentially many multiples of those in a broadcast TV environment
In a digital subscription TV environment, FOXTEL and AUSTAR will each utilise more than 100 Channels compared with one Channel for each of the Open broadcasters. Potential total subscription television captioning costs easily outstrip those costs of the single channel Open broadcasters.
j. Captioning costs for a multi-channel environment
Whilst programming budgets of individual subscription television channels are substantially lower than those of Open broadcasters, proportional savings do not apply to closed captioning costs. To caption an hour of original or live programming costs the same amount, regardless of the broadcast environment.
k. Although caption files exist for much programming shown on subscription television, costs are still involved in obtaining those files for broadcast
Where a program shown on subscription television has been captioned overseas or locally, the caption file must be purchased, reformatted, retimed and embedded onto the transmission master. Depending on the cost of acquiring the file and the choice of service provider, costs are still 25-65% of those of undertaking original captioning.[2]
l. International position: 100% captioning is not delivered anywhere in the world
ASTRA has investigated the levels of captioning in the major English-speaking television markets across the world. These results are summarised in Table 1 below.As can be seen from the summary, across a 24-hour program-day, captioning levels range from 0% on New Zealand subscription TV to 75%-80% in the larger, long established and profitable markets of the United Kingdom and the United States. None of these markets currently caption 100% of programming
Australian subscription television lags behind the rest of the world in terms of penetration and profitability and is significantly smaller and immature by comparison with a substantially smaller population to support its services. The relative strength, large scale and profitability of subscription television businesses in North America and Europe is a fundamental distinguishing feature and it would be inappropriate to simply impose international regulatory frameworks on the Australian subscription television sector.
| Yr begin | 1 Jan 2004 levels | 31 Dec 2008 proposed | 5-year increase | Industry profitability/ penetration | Funding | |
| Australian Open broadcasters [3] | 1982 | 43% (18hr) 32% (24hr) |
70% (18hr) 53% (24hr) |
27% (18hr) 20% (24hr) |
Profitable
/ Govt 99% |
Commercial / ABC / SBS |
| UK open broadcasters [4] | 1980 | 50-80% | 80-100% | 20-30% | Profitable 99% |
Commercial / BBC |
| UK subscription TV [5] | 1996 | 30%+ | 72% | 42% | Profitable 48%[6] |
Commercial / BBC |
| US open broadcasters[7] | 1979 | 75% (20hr) 63% (24hr) |
100% (20hr) 83% (24hr) |
20% | Profitable 99% |
Commercial / Govt |
| US subscription TV[8] | 1981 | 75% (20hr) 63% (24hr) |
100% (20hr) 83% (24hr) |
20% | Profitable 84%[9] |
Commercial / Govt |
| NZ open broadcasters[10] | 1981 | 20% | n/a | n/a | Profitable | Govt |
| NZ subscription TV | n/a | 0% | n/a | n/a | Profitable >40% |
n/a |
m. Providing access at UK and USA levels would cause undue financial hardship on members of the Australian Industry in circumstances where it is already making significant losses
Some reasons why such levels should not be expected of Australia are:
i. Smaller market: With captioning costs relatively fixed, larger markets are much better able to spread the cost of captioning across much larger subscriber bases.
ii. No government funding: No government funding has been provided for broadcasters for captioning in Australia. In the United States, a captioning fund developed by the Department of Education continues to fund significant amounts of captioning on network and subscription television. In the United Kingdom much captioning is sponsored by the best-funded public broadcaster anywhere in the world, the BBC. In New Zealand all captioning is government funded.
iii. Levels in overseas markets have built up over 20 years: The United States and the United Kingdom have reached their current captioning targets gradually over a period of more than 20 years.
iv. Profitability of industry: Any comparable markets are better financially equipped as they are either supported by Government to meet captioning costs or are more profitable with much larger viewer bases.
n. The proposed ASTRA rollout plan will significantly enhance the viewer experience for Deaf or hearing impaired subscribers and compares favourably with the speed of other rollout plans domestically and internationally
The rollout plan (see Undertakings section) makes a genuine attempt to significantly increase the television experience of Deaf and hearing impaired subscribers while recognising the financial and other constraints of the Industry. Captioned programming will grow steadily with time if it is introduced in a measured and sustainable fashion that is rationally aligned with the Industry’s ability to support it.
In preparing this rollout plan, ASTRA members have undertaken a full review of captioning requirements and engaged independent consultants who assessed the following key factors in respect of commencing captioning on subscription television:
2. Any consultation with people with a disability and their representative organisations;
In preparing this rollout plan, ASTRA members have taken into consideration discussions within the HREOC convened forum for captioning on subscription television. ASTRA has also briefed the recognised peak national Deaf and hearing impaired community groups, (Australian Association of the Deaf, Deafness Forum; and the Deafness Council of Western Australia) and circulated an earlier draft of this application for consideration and comment prior to finalisation and lodgement.
ASTRA members also have consulted with and involved organisations providing captioning and other servicing for the Deaf and hearing impaired community including:
During 2003, FOXTEL (endorsed by ASTRA) commissioned independent research to assess the priorities of Deaf and hearing impaired subscribers in introducing captioning across the platform. This research surveyed the Deaf and hearing impaired communities through a paper survey and face-to-face interviews.
The results of the survey were important to the Industry’s priorities for rolling out captioning across the digital platform.
Key findings from the survey include:
1. Top-priority genre categories to caption were:
1. NEW MOVIES
2. NEWS
3. GENERAL ENTERTAINMENT
4. NATURE
5. GOLDEN OLDIES2. Deaf and hearing impaired subscribers value choice and do not want simply to repeat availabilities of the Open Broadcasters; and
3. While desirable, sport was not a top priority as many could “follow the game without captions”.
ASTRA members are committed to improving access for Deaf and hearing impaired subscribers by way of certain undertakings (see Undertakings section). ASTRA and its members are also committed to consultation on this matter in accordance with ASTRA’s registered Codes of Practice.
The Commission first convened a working party on 27 August 2001 to discuss possibilities for expanding captioning on subscription television in Australia specifically, to provide conciliation for the unresolved complaints before it and generally, to improve access for Deaf and hearing impaired subscribers.
The Commission accepted that it would be prohibitive for the Industry to invest in providing captioning access for both its analogue and digital services. The industry undertook to present a captioning rollout plan for its new digital service.
At the time, Deaf or hearing impaired subscribers could access subscription TV programming principally through subtitled World Movies and the retransmission of captioning of Open broadcast signals through analogue cable services.
Lead-time
ASTRA members require some lead-time to implement the technical aspects of captioning after the rollout plan has been agreed. For these reasons the applicants request that the Commission deal with this Application with urgency.
ASTRA submits that the following matters should be taken into account in the Commission’s consideration of this application.
a) Financial and administrative matters: The subscription television industry is still incurring large losses with heavy infrastructure investments being made in digital and is operating in a rapidly changing industry structure. By contrast, the Open broadcast industry is profitable, stable and mature. The Open broadcast industry is also significantly less administratively complex as the licensee (under the Broadcasting Services Act) is the content provider. In the case of subscription television, the licensee (Platform) and the content provider (Channel Provider) are distinct with one licensee holding many Channel supply contracts with multiple Channel Providers. At present, over 40 different Australian and international media and communications companies share ownership of the Channels carried by subscription television Platforms in Australia, making it difficult to obtain industry consensus on an issue such as captioning.
b) Accommodation of technical change: The move to full digital technology has required and will continue to require substantial investments. FOXTEL alone has made an investment exceeding $600 million. Closed captioning technology must be tailored to the new infrastructure at significant cost.
c) Social responsibilities and discrimination: The Open broadcasters enjoy universal service penetration and receive free and exclusive use of spectrum for digital services from Government. Such an allocation of public resources, combined with the unique competition protection afforded to them by Government policy in terms of the prohibition on allocation of new commercial television licences [until at least 2007], carries with it commensurate responsibilities with regard to provision of captioning.
By contrast, the subscription television industry is funded entirely from private resources, is a wholly optional service which is currently connected to 23% of Australian homes.
(f) Terms and conditions of the Exemption
the terms and conditions of the exemption, which may include:
- measures the applicant intends to implement during the term of the exemption which will remove the discriminatory practice or improve equality of access and opportunity for people with a disability; and
- methods for evaluating and reporting these measures
Refer to Undertakings section
Debra Richards
Executive Director
Australian Subscription Television and Radio Association
Wharf 8
Pyrmont NSW 2009
Except for the following definitions, terms have their generally accepted meanings:
Captioning Launch means such date as ASTRA determines, being not later than 6 months after the Commission’s grant of an Exemption under section 55 of the Act.
Channel means a continuous stream of programs.
Channel Provider means a provider of a Channel for subscription television.
Digital Launch means 14 March 2004, which is the date FOXTEL launched its commercial retail digital subscription television service and AUSTAR relaunched its digital subscription television services.
Digital STU means a digital cable set-top-unit or upgraded digital satellite set-top-unit.
Digital Subscribers means digital cable subscribers and upgraded satellite subscribers.
Enabling means providing distribution infrastructure to facilitate captions to be viewable on a Channel by a subscriber. This does not include the lease or purchase of additional satellite and/or cable bandwidth beyond a Platform’s current allocation.
Industry means the subscription television industry.
Open broadcasters means the Australian Broadcasting Corporation (ABC), the Special Broadcasting Service (SBS) and commercial television networks Seven, Nine and Ten.
Subscription television provider/operator or Platform means the holder of subscription television broadcast licenses under the Broadcast Services Act 1992 (Cth.).
Territory means Australia.
Undertakings are provided by both subscription television Platforms and Channel Providers (in recognition of the different elements of service provision in the Australian subscription television Industry).
The proposed plan will see a number of benefits:
Yr
begin |
2003
levels |
No.
of channels |
2008
proposed |
5-year
increase |
Industry
profitability/ penetration |
|
| Australian subscription television[11] | 2004
|
n/a |
40 |
25%
(24hr) |
25%
(24hr) |
Loss
making 23% |
| Australian Open broadcasters | 1982 |
43%
(18hr ) 32% (24hr) |
5
|
70%
(18hr) 53% (24hr) |
27%
(18hr) 20% (24hr) |
Profitable
/ government funded 99% |
Digital subscription television Platforms will be responsible for enabling captioning on Channels and ensuring that captions can be received through Digital STUs.
Analogue subscription television Platforms will use best-endeavours to pass through closed captions to analogue subscribers via consumers’ own teletext-enabled TV’s.
Digital subscription television Platforms undertake to enable captioning for:
1. Retransmission of captioning contained in the Open broadcast signals, subject to retransmission agreements with the Open Broadcasters;
2. 20 subscription television channels at Captioning Launch (see attached confidential schedule); and
3. Will use reasonable endeavours to enable an additional 20 subscription television Channels within 24 months of the initial Captioning Launch.
When prioritising which Channels to enable captioning, Platforms, acting reasonably, will have regard to the following:
a) the demand for captioning on a Channel;
b) the anticipated volume of captioning that will be provided on a Channel;
c) a balance across Channel genre categories;
d) a focus on programming less likely to be captioned by Open broadcasters;
e) alternative access services (such as text-based interactivity); and
f) bandwidth and capacity constraints.
Channel Providers will be responsible for providing the caption files on a Channel which has been enabled on a Platform.
Subject to para 5 (Excluded Programming) and the terms set out below, each Channel Provider undertakes to caption its enabled channels to meet the targets in Table 3.
Completed
years after captioning first enabled |
Average
annual percentage captioning targets |
1 |
5% |
2 |
10% |
3 |
15% |
4 |
20% |
5 |
25% |
The following terms apply in respect of the targets in Table 3:
(1) Compliance shall be calculated on an annual basis on the anniversary of the enabling of captioning on the Channel;
(2) Compliance applies to all nationally transmitted programs broadcast;
(3) Where multiple enabled Channels are owned by one Channel Provider, that Channel Provider may pool its obligations and apportion them as it sees fit. For example, if an entity owns 4 channels on which captioning is enabled, in the second year of captioning (when the per channel target is 10% of programming) the entity may apportion captioning 25%, 5%, 5%, 5%, or any other combination equivalent to 10% across 4 channels;
(4) The percentages in Table 3 are calculated based on total hours available to the Channel (including midnight to 6am and including repeat programming);
(5) Open captioning or subtitles in the language of the target audience may be used in lieu of closed captioning;
(6) Electronic newsroom technique, if used, will be considered captioning for the purposes of this Exemption; and
(7) A Channel Provider is not obliged to caption more than 4 of its channels for the duration of the exemption. This will ensure that captioning is spread equitably across Channel Providers.
In line with international practice, the following programming is not required to be captioned:
(1) Programming on a Channel in its first two years of operation in the Territory;
(2) Non-English-language programming;
(3) Programming that is primarily textual, including channels dedicated to onscreen program schedules or guides, community calendars, etc;
(4) Music programming that is primarily non-vocal in nature, such as a symphony or ballet;
(5) Programming that is primarily non-verbal;
(6) Programming that is not for general distribution to residential viewers;
(7) Interstitials, promotional announcements, and public service announcements that are 10 minutes or less in duration; and
(8) Advertising of less than five minutes (short-form advertising) in duration. However where advertising is provided with closed captioning in the approved format for display on an enabled Channel, the Platform will use reasonable endeavours to pass through these captions, subject to technical and capacity constraints, if any.
ASTRA, on behalf of its members, undertakes to provide compliance reports annually to the Commission.
Before the conclusion of the 5-year period covered by this application, ASTRA, on behalf of its members, will review compliance with the plan and will, having regard to any changes to the Industry, captioning costs and methodologies, and other relevant considerations including community consultations, prepare a further plan.
*AUSTAR
is due to upgrade Digital STU’s for all new digital subscribers in July
2004. Subject to a successful upgrade, this will enable all new digital subscribers
to access captioning on screen, without a teletext-enabled TV. All AUSTAR digital
subscribers who have teletext enabled televisions may also receive captions
1.
OzTAM, All Metro TV Homes Panel, Share of Viewing, Total People 0200-0200, August
1 2003 to December 13 2003, Calculated using ATR Arianna.
2. Based on quotes obtained from the Australian Caption Centre,
Captioning and Subtitling International and Access Innovation Media.
3. http://www.hreoc.gov.au/disability_rights/exemptions/tvcap/dec.htm.
Targets are 6am to midnight. SBS and ABC targets are conditional on additional
government funding being made available.
4. http://www.itc.org.uk/uk_television_sector/accessibility/hearing_disabilities/index.asp;
http://www.bbc.co.uk/info/policies/subtitles.shtml.
5. See Digital Terrestrial and general provisions in Communications
Act (UK) 2003.
6. ABN-AMRO, Global Media, Sub-sector analysis, January 2002,
page 106.
7. http://ftp.fcc.gov/cgb/dro/ccrules.html.
8. http://ftp.fcc.gov/cgb/dro/ccrules.html.
9. ABN-AMRO, Global Media, Sub-sector analysis, January 2002,
page 106.
10. http://www.captioningnz.co.nz/.
11. Figures for the first 20 enabled channels.