Cabinet documents 1998-99: Govt's own advisers accused it of botching digital TV policy

In a series of controversial decisions taken in the late 1990s that continue to influence the television services and viewing choices open to consumers, the Coalition government mandated high definition digital TV standards, banned multichanneling by commercial operators, gave commercial channels free access to broadcast spectrum and constrained multichannel opportunities for the ABC and SBS.

At the time the government was nervous about how quickly and comprehensively Australia would adopt digital TV, and communications minister Richard Alston argued a mix of incentives and constraints was needed to encourage the commercial networks to invest in the technology, smooth consumer uptake and shield the infant pay TV industry.

In a series of submissions to cabinet in November and December 1999, Senator Alston backed commercial broadcasters who argued HDTV would drive consumer uptake of digital television, and proposed that they be "loaned" additional television spectrum to allow them to simultaneously broadcast analogue and digital transmissions for up to eight years.

The minister also wanted to lock down the use of digital technology to simultaneously broadcast multiple channels by both commercial networks and the public broadcasters.

"There is a clear case for ... the commercial FTA [free to air] multichanneling prohibition ... to ensure that they do not use their digital channels to unfairly compete with the pay TV sector...which is still relatively underdeveloped in Australia," Senator Alston said.

He proposed that multichannels broadcast by the ABC and SBS be limited to programming that would not compete with pay TV offerings, such as education, science, religious, arts, Indigenous and regional shows.

But the 1998 and 1999 cabinet papers, released by the National Archives on Wednesday, show key departments were highly critical of the government's approach.

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In coordination comments, the Department of Prime Minister and Cabinet argued against any government involvement in the introduction of digital television, which it said should be left to the judgement of broadcasters and consumers.

However, the department added that if the government was intent on intervening, it should not be giving commercial operators free access to spectrum, which would give them a "substantial windfall financial benefit".

"While there are costs involved in converting to digital transmission, PM&C does not consider that they justify the free gift of an increasingly valuable public asset," the department said.

"The proposed approach would also restrict the consumer benefits available from a wider range and flexibility of services and could have significant budgetary implications through foregone revenue."

Treasury also came out hard against Senator Alston's proposals.

"Treasury does not support mandating HDTV," the department said. "[It] ties up ... spectrum that could be used for the development of other application such as multichanneling and datacasting".

Treasury said overseas experience showed that "the key driver for consumer uptake of digital television is not likely to be better picture quality but new and improved digital services and additional channels".

Finance suggested the government's plan could be rapidly overtaken by technological advances.

"There is every likelihood that the broadcasting and communications services which are currently available will only be a small part of the information services market in 10 years' time," it said.

"[The] highly regulated regime proposed ... could impede our international competitiveness and unduly restrict the range of communications services available to consumers and industry."