Media groups criticise convergence review as internet giants Google, Facebook omitted

Media companies have responded negatively to the Federal Government’s Convergence Review report, which left out internet giants including Facebook and Google but included major news organisations when describing a new regulatory system.

Companies including Foxtel and News Limited have slammed the report as unnecessary regulation, but some internet service providers, which have not been included in the report’s hypothetical new regulatory structure, are more lukewarm.

“I’m interested to see where all of this goes,” iiNet founder and managing director Michael Malone told SmartCompany this morning. “But I think it’s something we’re going to be watching from the sidelines.”

“There doesn’t seem to be a generic ruling that ISPs are covered in new regulation.”

In the new report, Google is not classified as a big enough media organisation to warrant new regulation, despite the outcry from other media companies due to the control companies such as Google and Facebook have over users’ everyday lives. Google was contacted for comment by SmartCompany this morning, but it declined to respond.

Key recommendations of the report include creating a new regulatory body to replace the Australian Communications and Media Authority, a new self-regulatory body for journalistic standards, creating a 50% increase in local content obligations for drama and other content, and scrapping the broadcast licence fees regime.

In a major recommendation, the report suggests that all major media companies should be defined as “content service enterprises” – but only 15 of them will be large enough to warrant regulation.

These companies include Fairfax, News Limited, and the major television networks. However, due to a threshold of $50 million for locally created content, and an audience threshold of 500,000 monthly users, Google will not be subjected to regulation.

This means Apple and Telstra would also not qualify despite both companies moving into more content distribution.

Social media and user-generated content would also escape regulation, ensuring Facebook is out of the loop. This means YouTube is free of regulation, although the report notes that if the site started creating and hosting professional content it could be included.

In a submission to the report, Google said proposed content standards for YouTube were “unworkable”, while Facebook said the definitions of a content service enterprise “seem difficult to apply in an online environment”.

Malone says although he is still reading the report, he’s interested in the report’s comments on anti-siphoning schemes.

“The one thing I am interested in is how they’re talking about commencing an investigation on exclusive content, and how that impacts bundling.”

“I’ll be interested to see how that unfolds.”

News Limited chief executive Kim Williams said in a statement the report “would appear to suffer from at least four primary, serious flaws”.

Williams criticises the recommendations for heavy-handed regulation, new regulations, increasing regulation and excluding some “powerful companies” from regulation – most likely Facebook and Google.

Communications Minister Stephen Conroy has said the Government will issue a response later in the year.