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2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TELEVISION LICENCE FEES AMENDMENT BILL 2006
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator the Hon. Helen Coonan,
Minister for Communications, Information Technology and the Arts)
TELEVISION LICENCE FEES AMENDMENT BILL 2006
OUTLINE
This Bill is related to the amendments to be made in the Broadcasting Legislation Amendment
(Digital Television) Bill 2006 (the Digital TV Bill).
The Digital TV Bill provides that a commercial television broadcasting licence will authorise the
provision of more than one service (or ‘channel’ of programming) from 1 January 2007.
Specifically, commercial broadcasters will be able to provide a non-simulcast high definition
(HDTV) service (HDTV multichannel) from 1 January 2007, one standard definition (SDTV)
multichannel from 1 January 2009 and any number of multichannels from the end of the
simulcast period.
Commercial television licensees are currently required to pay licence fees under the Television
Licence Fees Act 1964. The fees payable are calculated on the basis of the ‘gross earnings’ of the
licensee. Accordingly, this Bill amends the definition of ‘gross earnings’ to reflect the fact that
commercial television broadcasting licensees will be able to earn revenue from the provision of
multiple services. The effect of this Bill is that all revenue derived by a commercial television
broadcasting licensee from the televising of advertisements or other matter on all services
provided by the licensee will be included for the purposes of calculating the licence fee.
FINANCIAL IMPACT STATEMENT
The ability to provide a greater number of services, and thus screen a greater number of
advertisements, may increase the gross earnings of licensees. This would result in the Australian
Communications and Media Authority (ACMA) collecting more revenue from licence fees.
However, there are a number of factors which may mitigate this:

Broadcasters will not be prevented from maintaining their existing simulcast HDTV services
rather than operating an HDTV multichannel. In this case there would be unlikely to be a
change in licence fee revenue between 2007 and 2009 as a result of this Bill.

Broadcasters will be permitted but not required to operate an SDTV multichannel from 1
January 2009. Some or all broadcasters may choose not to do so. Similarly, broadcasters may
choose not to operate any additional services after the end of the simulcast.

It is unclear whether the introduction of additional services and advertising time will affect
the revenue raised by broadcasters’ main services. However, broadcasters are most likely to
provide additional services where they perceive an overall commercial benefit from doing so.
Given these factors, any financial impact of the Bill is likely to be net positive in terms of
revenue but it is not possible to quantify in advance of the introduction of additional services.
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NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides for the citation of the Television Licence Fees Amendment Act 2006 (the
Amendment Act).
Clause 2 - Commencement
The Amendment Act would commence on 1 January 2007.
Clause 3 - Schedule(s)
By virtue of this clause, a provision of the Television Licence Fees Act 1964 (the Act) is
amended as set out in Schedule 1 to the Bill.
SCHEDULE 1 – AMENDMENT
Television Licence Fees Act 1964
Item 1 – Subsection 4(1) (definition of gross earnings)
Item 1 amends the definition of ‘gross earnings’ in subsection 4(1) of the Act.
Item 1 is related to the amendments to be made in the Broadcasting Legislation Amendment
(Digital Television) Bill 2006 (the Digital TV Bill). The Digital TV Bill provides that a
commercial television broadcasting licence will authorise the provision of more than one service
(or ‘channel’ of programming) from 1 January 2007.
Currently, a commercial television broadcasting licensee may only provide a single service under
the Broadcasting Services Act 1992 (BSA). The same service must be transmitted by the
commercial television broadcasting licensee simultaneously in analogue mode and standard
definition television (SDTV) digital mode (paragraphs 7(1)(k)-(na) of Schedule 2, and
subclauses 6(3) and 6(8A) Schedule 4 to the BSA). Commercial broadcasters are also required
to transmit a version of the service in high definition television (HDTV) digital mode (subclause
37E(1) of Schedule 4 to the BSA). When broadcasting the HDTV version of the service,
commercial television broadcasting licensees are required to meet a quota of at least 1040 hours
per year of HDTV programs (subclause 37E(2B) of Schedule 4 and the Broadcasting Services
(Digital Television Standards) Regulations 2000).
Under the Digital TV Bill, from 1 January 2007 a commercial television broadcasting licensee
may satisfy their HDTV quota obligations by providing a different HDTV service than the
simulcast service (Schedule 2 to the Digital TV Bill). In other words, a licensee may provide a
channel of programming that is transmitted in analogue and SDTV digital mode, and an entirely
separate channel of programming transmitted in HDTV digital mode. From 1 January 2009, a
commercial television broadcasting licensee may also choose to provide an additional channel of
programming in SDTV mode, in addition to the simulcast service (Schedule 3 to the Digital TV
Bill).
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From the end of the simulcast period, when the obligation to provide a service simultaneously
in analogue and SDTV digital mode ceases, commercial television broadcasting licensees may
choose to provide multiple channels of programming in SDTV and/or HDTV digital mode
(Schedule 3 to the Digital TV Bill). The only limitation on the provision of new services is that
a commercial television licensee may only use the spectrum frequencies specified in the related
transmitter licence issued under the Radiocommunications Act 1992 (which authorises
transmission of the services). This means that a commercial television broadcasting licensee can
use only the 7 MHz of spectrum it is allocated by the Australian Communications and Media
Authority when providing new digital services.
Commercial television broadcasting licensees are required to pay licence fees under the Act, and
the fees payable are calculated on the basis of the ‘gross earnings’ of the licensee (section 6 of
the Act). Accordingly, a consequential amendment to the definition of ‘gross earnings’ is
required to reflect the fact that commercial television broadcasting licensees will be able to earn
revenue from the provision of multiple services in the future. The effect of this amendment is
that all revenue derived by a commercial television broadcasting licensee from the televising of
advertisements or other matter on services provided by the licensee will be included for the
purposes of calculating the licence fees payable for the commercial television broadcasting
licence.