FEDERAL COURT OF AUSTRALIA

Phonographic Performance Company of Australia Limited v Commercial Radio Australia Limited [2013] FCAFC 11

Citation:

Phonographic Performance Company of Australia Limited v Commercial Radio Australia Limited [2013] FCAFC 11

Appeal from:

Phonographic Performance Company of Australia Limited v Commercial Radio Australia Limited [2012] FCA 93

Parties:

PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED (ACN 000 680 704) v COMMERCIAL RADIO AUSTRALIA LIMITED (ACN 059 731 467)

File number:

NSD 361 of 2012

Judges:

EMMETT, BESANKO AND YATES JJ

Date of judgment

Corrigendum:

13 February 2013

12 June 2013

Catchwords:

COPYRIGHT – whether the scope of the non-exclusive licence of the right to broadcast certain sound recordings granted by a copyright collection agency to radio stations included the right to play those recordings in radio programs transmitted by FM broadcast as a simulcast with transmission of the same program via the internet

COPYRIGHT Definition of ‘broadcasting service’ in s 6(1) of the Broadcasting Services Act 1992 (Cth) – as affected by a Ministerial determination excluding some services but then excepting some of those services from the exclusion – whether streamed internet radio program, when broadcast simultaneously with radio broadcast via broadcasting services bands, fell under the definition of ‘broadcasting service’ in s 6(1) as affected by the Ministerial determination

Legislation:

Acts Interpretation Act 1901 (Cth) ss 15AB(1), 15AB(2)

Broadcasting Services Amendment (Digital Television and Datacasting) Act 2000 (Cth)

Broadcasting Services Act 1992 (Cth) ss 3, 4, 6(1), 133, 136, Sch 6

Copyright Act 1968 (Cth) s 10(1)

Legislative Instruments 2003 (Cth) s 13(1)

Radiocommunications Act 1992 (Cth)

Dates of hearing:

20 – 21 August 2012

Place:

Sydney

Division

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

72

Counsel for the appellant:

R Cobden SC with C Dimitriadis

Solicitor for the appellant:

Gilbert + Tobin

Counsel for the respondent:

JM Hennessy SC

Solicitor for the respondent:

Minter Ellison

FEDERAL COURT OF AUSTRALIA

Phonographic Performance Company of Australia Limited v Commercial Radio Australia Limited [2013] FCAFC 11

CORRIGENDUM

1    In paragraph 69 of the Reasons for Judgment, in the third line the words “broadcasting service” should read the word “service”.

2    In paragraph 71 of the Reasons for Judgment, in the third to last line the word “third” should read “second”.

I certify that the preceding two (2)

numbered paragraphs are a true copy

of the Corrigendum to the Reasons

of Judgment herein of the Honourable

Justices Emmett, Besanko and Yates.

Associate:

Dated:    12 June 2013

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 361 of 2012

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED

Appellant

AND:

COMMERCIAL RADIO AUSTRALIA LIMITED

Respondent

JUDGES:

EMMETT, BESANKO AND YATES JJ

DATE OF ORDER:

13 February 2013

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.    The appellant file and serve proposed short minutes of order reflecting these reasons no later than 19 February 2013.

2.    The proceeding be listed for the purpose of making orders on 21 February 2013.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 361 of 2012

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED

Appellant

AND:

COMMERCIAL RADIO AUSTRALIA LIMITED

Respondent

JUDGES:

EMMETT, BESANKO AND YATES JJ

DATE:

13 February 2013

PLACE:

SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

1    This appeal is concerned with the construction of the definition of broadcasting service in s 6(1) of the Broadcasting Services Act 1992 (Cth) (the Broadcasting Act), as that definition is affected by a Ministerial determination made in accordance with the provisions of the Broadcasting Act. The question arises in the context of an agreement (the Industry Agreement) made between the appellant (PPCA) and the respondent (CRA) on 16 June 2000.

2    The Industry Agreement relates to the grant, by PPCA to CRA members, of licences in relation to certain sound recordings (the Sound Recordings). PPCA is the collecting society in respect of the Sound Recordings for the purposes of the Copyright Act 1968 (Cth) (the Copyright Act). Members of CRA are the holders of commercial radio broadcasting licences granted under the Broadcasting Act. Under the Industry Agreement, the licences are granted in accordance with, and subject to the terms of, the form of an agreement set out in a schedule to the Industry Agreement (the Member Agreement).

3    Under the Member Agreement, PPCA grants to the CRA member a non-exclusive licence of the Broadcasting Right, as defined in the Member Agreement. The Broadcasting Right is defined in the Member Agreement as the right, from time to time, to broadcast the Sound Recordings in Australia. It is agreed between the parties that the term broadcast is to be understood as having the meaning specified in s 10(1) of the Copyright Act. Section 10(1) provides that broadcast means a communication to the public delivered by a broadcasting service within the meaning of the Broadcasting Act.

4    Under s 6(1) of the Broadcasting Act, broadcasting service means, relevantly, a service that delivers radio programs to persons having equipment appropriate for receiving that service, but does not include, relevantly, a service that the Minister determines not to fall within the definition. On 12 September 2000, the Minister made a determination under that provision (the Ministerial Determination) that a class of services described in the Ministerial Determination does not fall within the definition.

5    The effect of the definition, as affected by the Ministerial Determination, is that broadcasting service means, relevantly, a service that delivers radio programs to persons having the equipment appropriate for receiving that service, where the delivery uses the radiofrequency spectrum, cable, optical fibre, satellite or any other means or a combination of those means, but does not include a service that makes available radio programs using the internet, other than a service that delivers radio programs using the broadcasting services bands. Thus, the Ministerial Determination excludes some services from the definition of broadcasting service, but then excepts some services from that exclusion.

6    From 2001, at the latest, some CRA members have, simultaneously with transmission using the broadcasting services bands, streamed radio programs on the internet that include the Sound Recordings. The content of the radio program made available using the internet is identical to the content of the radio program delivered using the broadcasting services bands. The phrase broadcasting services bands means, relevantly, that part of the radiofrequency spectrum that is designated under the Radiocommunications Act 1992 (Cth) as being primarily for broadcasting services. The question in the appeal is whether the making available of radio programs using the internet in those circumstances is within the licence granted by PPCA under the Member Agreement. PPCA contends that it is not. CRA, on behalf of its members, contends that it is.

7    By a proceeding commenced on 3 February 2010, PPCA claimed declarations that the communication by CRA members to the public, by means of the internet, of Sound Recordings in the course of operating commercial radio services is not within the scope of the licence granted by the Member Agreement. On 15 February 2012, for reasons published on that day, a judge of the Court ordered that the proceeding be dismissed and that PPCA pay CRA’s costs of and incidental to the proceeding. By notice of appeal filed on 7 March 2012, PPCA appealed from the orders made by the primary judge. An amended notice of appeal was filed by leave of the Full Court on 20 August 2012. CRA, in the meantime, filed a notice of contention on 20 June 2012.

SIMULCASTING BY MEMBERS OF CRA

8    There is no dispute about the relevant facts. The proceeding before the primary judge was conducted on the basis of agreed facts, together with evidence of Mr Desmond DeCean, a broadcasting consultant to the radio broadcasting industry. Mr DeCean has had nearly 50 years of experience in various roles with television and radio broadcasters. Mr DeCean gave evidence concerning the technical aspects of radio broadcasting, which is not in dispute.

9    There are various sources of content that a CRA member might include in a radio program. The sources include live announcers, music files, callers who phone in, advertisements and pre-recorded material. Material from those sources is fed to equipment consisting of studio mixers and distribution amplifiers.

10    At the studio mixer, the content from the various sources is blended so that the transition from one source to another is seamless, the content is of a common style and the volumes are appropriately adjusted, to create a single continuous audio stream. Such a single continuous radio stream is a radio program. The continuous audio stream is sent to the distribution amplifier, which replicates it into several equal continuous audio streams, typically four streams, each of which is an exact replica of all of the others and of the original continuous audio stream.

11    Some of these identical continuous audio streams may be sent to a terrestrial transmitter that transmits signals on a frequency of the AM band, on a frequency of the FM band or on a frequency of the digital radio band. The terrestrial transmitter broadcasts the signals directly to the receivers of listeners over the designated part of the radiofrequency spectrum. There will be separate transmissions on the AM band, the FM band and the digital radio band. When a signal is transmitted from such a transmitter, it is converted into a signal appropriate to be sent to the appropriate receivers, which convert the signal into an audible sound by means of speakers.

12    One of the identical continuous audio streams may be sent to web stream servers. Web stream servers allow listeners who have devices connected to the internet, such as a computer, mobile phone or iPad, to listen to the continuous audio stream by means of the internet. The web stream servers act as a point of dissemination, so that listeners who have a device connected to the internet are able to click on a link on the website of the CRA member, which connects the device to the web stream server. That activates the delivery of the continuous audio stream to the listener’s device.

13    Simulcasting occurs when identical continuous audio streams are broadcast by means of two or more platforms, being AM transmission, FM transmission, digital transmission or web streaming. A typical example of simulcasting occurs when a CRA member sends out identical continuous audio streams to an FM transmitter, a digital radio transmitter and an internet web stream server at the same time. Those continuous audio streams can be received by a person who has an appropriate device being, respectively, an analogue AM/FM radio receiver, a DAB+ receiver or other device that has capacity to access the internet, such as a computer, mobile phone or iPad.

14    From 2002, the stream that was sent to web stream servers was, generally speaking, partly digital and partly analogue. The stream was encoded and compressed into an appropriate computer file for transmission to a web address that could be accessed by the prospective listener by use of a device with internet access. The prospective listener who accessed the web address in that way received data packets consisting of coded audio signals, which were decoded by the listener’s device. Once decoded, the signals sound the same as the modulated signal transmitted by an FM transmitter. While there was a slight difference in quality, the sound was essentially the same. There might also be a slight delay where web stream servers were involved, but no break in the transmission. That is to say, there was no delay in the delivery of the continuous audio stream, being the radio program, to the web stream server. The link to the web address could be clicked on by anyone, anywhere in the world, who had a device with internet access.

15    The regulatory framework governing the operations of CRA members acts on the technical activities of those members. For example, broadcasts by a particular member are confined, by technical means, to the licence area designated in the licence of that member. Technical developments that expanded the platforms upon which radio programs are made available or delivered to the public generally have gone hand-in-hand with regulatory changes. For example, the development of FM radio, from a technical perspective, was accompanied by a regulatory change to enable use of the FM part of the radiofrequency spectrum.

AGREED FACTS

16    The parties agreed on three instances where one of the Sound Recordings was simulcast by a CRA member. It is convenient to deal only with the first instance, which related to the Sound Recording “Foreign Land” by Eskimo Joe, which was made in Australia and first published in Australia in 2009 (the Foreign Land Recording). A radio program that included the Foreign Land Recording was simulcast by DMG Radio (Australia) Pty Limited (DMG), a CRA member. DMG operates a commercial radio service known as Nova FM in the Sydney metropolitan area, under the call sign 2SYD.

17    Copyright subsists in the Foreign Land Recording under the Copyright Act. That copyright includes the right to communicate the Foreign Land Recording to the public, including the right to broadcast the Foreign Land Recording within the meaning of the Copyright Act. Warner Music Australia Pty Limited (Warner), the owner of the copyright in the Foreign Land Recording, has entered into an agreement with PPCA under which it granted to PPCA non-exclusively the right to grant licences of the right to broadcast the Foreign Land Recording and to communicate the Foreign Land Recording to the public, as part of its simultaneous transmission of a broadcast over the internet. DMG has been granted a licence by PPCA in respect of the Foreign Land Recording, in terms of the Member Agreement.

18    At 4.17 pm on 12 January 2010, in the course of operating its commercial radio service, DMG broadcast the Foreign Land Recording using the broadcasting services bands and simultaneously caused the sounds of the Foreign Land Recording to be streamed over the internet in a manner that was accessible from the website URL http://www.novafm.com.au/nova969/Streaming.aspx (the Nova URL). The sounds of the Foreign Land Recording were unaltered. A person using a device with internet access, who had connected to the Nova URL and was still connected at 4.17 pm on 12 January 2010, would have been able to hear the sounds of the Foreign Land Recording. Thereby, DMG communicated the Foreign Land Recording to the public within the meaning of the Copyright Act. DMG was not licensed to broadcast the Foreign Land Recording or to communicate it to the public, except to the extent that it was licensed to do so under the licence granted to it in terms of the Member Agreement.

THE PARTIES’ CONTENTIONS

19    CRA’s primary contention is that, where there is a simulcast in the manner described above, there is a communication to the public delivered by a broadcasting service within the meaning of s 6(1) of the Broadcasting Act, as affected by the Ministerial Determination. That is to say, it contends that, where there is a broadcast delivered by a service that delivers radio programs, and the delivery uses the radiofrequency spectrum, cable or optical fibre or other means, or a combination of such means, the communication to the public is not delivered by a service that makes the radio programs available using the internet. Alternatively, CRA contends that, if the communication to the public is delivered by a service that makes radio programs available using the internet, it is a service that delivers radio programs using the broadcasting services bands. Either way, it says, the communication of its radio program to the public is delivered by a broadcasting service. Therefore, it says, the communication to the public is within the licence granted to it in terms of the Member Agreement.

20    CRA says that the word service relates to a particular channel and not the means of delivery of that channel. CRA’s contention is that DMG’s radio program, which includes the Foreign Land Recording, is broadcast by DMG and that the delivery or making available of that radio program is a broadcast service, irrespective of the platform or means whereby it is delivered or made available to the public. It says that its program is not a service in the sense of being defined, and confined, by the means of delivery identified in the exclusion, namely, making available using the internet.

21    The essence of CRA’s contention is that the broadcasting service of DMG is the radio program itself, including the Foreign Land Recording, as delivered by various means, including using the broadcasting services bands and using the internet by means of coaxial cable and the like. It says that the means by which the radio program is delivered is irrelevant and that the broadcasting service is the provision of the radio program, by whatever means.

22    PPCA, on the other hand, contends that the communication of the Foreign Land Recording to the public was not delivered by a broadcasting service, because the service that delivered the sound recording, by making it accessible through the Nova URL, was a service that made available the radio program, including the Foreign Land Recording, using the internet and that service is not a service that delivers radio programs using the broadcasting services bands. PPCA contends, specifically, that the word service, as used in the Ministerial Determination, is directed to that which is actually being delivered by DMG, being the radio program wrapped up in a delivery mechanism, and received by a member of the public, who receives it either by means of a radio receiver or through a device connected to the internet. Thus, it says, the provisions of the Ministerial Determination are concerned, in essence, with the platform or method of delivery of the communication in question. It says that the radio program made available by DMG using the internet is delivered by a service that makes radio programs available using the internet and that it is not delivered using the broadcasting services bands.

23    In effect, PPCA contends that the making available by DMG of its radio program using the internet is a different service from the delivery of that radio program using the broadcasting services bands. Thus, PPCA says, DMG, in the circumstances described, is making communications to the public that are delivered by two quite distinct broadcasting services. One of those services delivers DMG’s radio programs using the broadcasting services bands. The other service makes its radio programs available using the internet, which will involve cable and optical fibre or other means or a combination of those means. The first service, it says, is within the definition, in that it falls within the preamble of the definition. The second service, it says, is not a broadcasting service, because it falls within the exclusion in the Ministerial Determination, and it is not within the exception to that exclusion.

THE EXTRINSIC MATERIALS

24    While each of PPCA and CRA point to other provisions of the Broadcasting Act as casting light on the proper construction to be given to the definition of broadcasting service, each also points to extensive extrinsic material. Thus, PPCA points to the expected development of datacasting in the late 1990s and early 2000s as being the motivation for the Ministerial Determination. CRA, on the other hand, says that the expected growth in datacasting was of greater concern for the holders of commercial television broadcasting licences, rather than the holders of commercial radio broadcasting licences, and that the Ministerial Determination should be understood in that context.

25    The extrinsic material is said to be relevant to the construction of the definition by the operation of s 15AB(1) of the Acts Interpretation Act 1901 (Cth) (the Interpretation Act) and s 13(1) of the Legislative Instruments Act 2003 (Cth) (the Instruments Act). Section 15AB(1) of the Interpretation Act relevantly provides that, if any material not forming part of an Act of the Commonwealth Parliament is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:

    to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision; or

    to determine the meaning of the provision when the provision is ambiguous or obscure, or the ordinary meaning conveyed by the text of the provision leads to a result that is manifestly absurd or is unreasonable.

In considering the ordinary meaning of a provision, the context of the provision in the relevant Act, and the purpose or object underlying the relevant Act, must be taken into account. Section 15AB(2) relevantly provides that the material that may be considered, in accordance with s 15AB(1), includes any explanatory memorandum relating to the Bill for the Act containing the provision or any other relevant document that was laid before, or furnished to, the members of either House of the Parliament by the Minister before the time when the provision was enacted.

26    The Ministerial Determination is a legislative instrument for the purposes of the Instruments Act. Accordingly, it is to be interpreted in accordance with s 13(1) of the Instruments Act. Section 13(1) relevantly provides that the Interpretation Act applies to any legislative instrument as if it were an Act of the Commonwealth Parliament and as if each provision of the legislative instrument were a section of an Act. Expressions used in any legislative instrument have the same meaning as in the enabling legislation as in force from time to time, and any legislative instrument is to be read and construed subject to the enabling legislation as in force from time to time. The proceeding at first instance and the appeal have been conducted on the basis that s 13 of the Instruments Act applies to the Ministerial Determination.

Australian Broadcasting Authority Report of 30 June 1996

27    On 24 July 1995, the relevant Minister directed the Australian Broadcasting Authority (the Authority), under the relevant provision of the Broadcasting Act, to investigate, amongst other things, the content of online information and entertainment broadcasting services, including any broadcasting services provided on the internet, with a view to examining the appropriateness of the development of codes of practice for those services that, as far as possible, are in accordance with community standards. The Authority was also to investigate technological advances and service trends in provision of online information and entertainment services by the broadcasting industry and the extent to which online information and entertainment broadcasting services are accommodated by the operation of the Broadcasting Act. The Authority was specifically asked to consider, in undertaking the investigation, the nature of material that may be provided generally via online information and entertainment services, including the internet and bulletin board services.

28    The Authority published its report on 30 June 1996 (the 1996 Report). In the Report, the Authority expressed the view that any legal definition of online services should be separate and distinct from any legal definition of broadcasting or broadcasting services, such that the two could be dealt with in accordance with their own particular characteristics. The Authority adopted the following working definition for the purposes of the 1996 Report:

An online service is a service that makes content available by means of a telecommunications network which enables the transmission of information between users or between users and a place in the network.

29    In the 1996 Report, the Authority acknowledged that the vast majority of emerging online services could not be called broadcasting in the traditional sense. However, it considered that it was likely that online services would increasingly be offered and marketed with content of a broadcast nature and that they might be offered as a package with broadcast radio and television programs. The Authority considered that the convergence of hardware platforms was facilitating that development, and that the convergence of technologies meant that traditional delivery mechanisms were being challenged. The Authority said that convergence allowed both a new way of delivering existing services and the delivery of new services, which were not previously possible. It said that radio and television broadcasters were also moving to provide online information and entertainment services and that radio broadcasts, in particular, were already being simulcast online and that services were being provided specifically for online users.

30    In dealing with regulatory issues, the 1996 Report said that radio and television broadcasting services had been regulated in Australia for decades. It then observed that some content available by means of online services would be similar to that offered by traditional broadcasting services but that, notwithstanding that similarity, it was important to consider whether the rationales for regulating traditional broadcasting services applied to online services. It observed that the internet is not subject to the same resource constraints that apply to the radiofrequency spectrum for traditional broadcasting services and that, at that time, there were potentially as many sources of content as there were online users. Accordingly, the 1996 Report said, the provision of online services did not give any one participant in the online community the level of influence that traditional broadcasting may give to a broadcasting service provider, or a person who controls a broadcasting service provider.

31    The 1996 Report said that there was, at that time, a wide variety of services that could be accessed online and that a small proportion of those might be defined as broadcasting services under the Broadcasting Act. It referred to the fact that the online environment is interactive, which means that accessing material is a conscious, user-driven decision. Content is not received passively, as in broadcast radio and television. The means of delivery of online services was described in the 1996 Report as a series of interconnected communications networks with no central control or ownership.

32    The 1996 Report said that the functions performed by the participants in the online environment were not as fixed as in the traditional broadcasting model, because the activities performed by a participant might encompass more than one function and a participant might perform different functions at different times. The 1996 Report concluded the discussion of regulatory issues by saying that the convergence in telecommunications, computing and broadcasting technologies was being mirrored in the convergence of hardware platforms and the variety of services being offered. The act of communication of content was becoming more important than the means, or the environment, within which content was provided. Therefore, the 1996 Report said, it would become increasingly difficult to isolate the means of delivering content from the nature of the content itself, for the purpose of regulation. It said that a more coordinated approach to regulation was required.

33    In dealing with legal and related issues, the 1996 Report observed that the definition of broadcasting service in the Broadcasting Act specifically excluded a service that makes programs available on demand on a point-to-point basis, including a dial-up service. The 1996 Report said that a fundamental difference between broadcasting services and point-to-point services lay in the fact that, in the provision of a broadcasting service, the recipient of the broadcasting service does not determine when particular audio or visual material will be accessed or viewed. The content of a broadcasting service arrives at every viewer’s or listener’s receiver at the same time. Broadcasting services were thus said to be point to multi-point services.

34    The 1996 Report then observed that, unlike traditional broadcasters, online service providers do not control all the content made available through their services. The method of receipt of online services also differs from traditional broadcasting services. The 1996 Report referred to submissions stressing the conscious, deliberate decisions that users will normally exercise before online content is accessed. Most online services are accessed by users affirmatively and deliberately requesting, and then retrieving, a particular site, file or document, although the user may not know the specific content that it contains. The 1996 Report referred to submissions that argued that online services, whilst unique, were more akin to telephone communication than to broadcasting. It said that online services also differ from broadcasting because they enable the user to send, as well as receive, messages. The service provides the capacity for inter-communication or inter-activity.

35    The 1996 Report observed that the internet currently had the capacity to, and did in fact, provide some point-to-multi-point services. It said that, at that time, that occurred with real time audio services, which offered programming much like commercial radio broadcasters. The 1996 Report said that online services offered on a real time basis were likely to fall within the definition of broadcasting services within the Broadcasting Act, where they provide what could be described as television programs or radio programs. The 1996 Report expressed the view that what constitutes a television or radio program was a content issue. The Authority said, in the 1996 report, that where online services deliver television programs or radio programs in real time, they may fall within the regime applicable to broadcasting services. The 1996 Report said that, if the Parliament took the view that the majority of online services should be accommodated by the Broadcasting Act, that would require legislative amendment. It said that the different nature of online and broadcasting services would suggest that such amendment should take the form of a separate definition and regulatory regime for online services within the Broadcasting Act.

Productivity Commission Report of 3 March 2000

36    The Productivity Commission was asked by the Treasurer to advise on practical courses of action “to improve competition, efficiency and the interests of consumers in broadcasting services”. The Productivity Commission was asked to focus particular attention on balancing the social, cultural and economic dimensions of the public interest and to have due regard to the phenomenon of technological convergence, to the extent that it may impact upon broadcasting markets. In its report of 3 March 2000 (the 2000 Report), the Productivity Commission observed that the digital revolution promised consumers new and better broadcasting services throughout Australia, saying that broadcasting, telecommunications and the internet were converging rapidly, not only in terms of technology and services, but also in company structures. The 2000 Report said that, if policies were to be effective in an environment of continuing uncertainty, regulatory distinctions between media, services and delivery platforms should be avoided. It said that, with advances in digital technology, broadcasting, telecommunications and the internet were converging rapidly and that broadcasting was becoming more interactive and was not what it was when the Broadcasting Act was introduced in 1992. The 2000 Report said that it was not possible to predict or describe the direction that the digital revolution would take and that the directions and speed of convergence were unclear. It said, however, that the inevitability of continuing change in the media and telecommunications industries was certain.

37    The 2000 Report said that certain basic principles should underpin the development of the Australian media industry in the future. It said that Australia’s broadcasting policy should, amongst other things:

    promote efficient resource allocation in broadcasting, related industries and the Australian economy as a whole;

    provide for equitable access to broadcasting services for Australian consumers, including those with special needs, in regional areas and on low incomes;

    encourage innovation in the provision of broadcasting services; and

    promote efficient, effective and transparent public administration in broadcasting.

38    The 2000 Report said that, to achieve those aims, it was important to minimise the technological specificity of regulation and that regulation should be targeted to achieve objectives, rather than “to balance quid pro quos among producers”. It said that regulation should be as technologically neutral as possible, to avoid creating unnecessary regulatory distinctions between similar services that were delivered differently. Such distinctions, it said, could impose costs on the community by preventing or delaying the introduction of the most efficient and effective technologies.

Broadcasting Services Amendment (Digital Television and Datacasting) Act 2000

39    The Broadcasting Services Amendment (Digital Television and Datacasting) Act 2000 (the Digital TV and Datacasting Amendment) was assented to on 3 August 2000. The Bill for the Digital TV and Datacasting Amendment was given its second reading on 10 May 2000. In his speech on the second reading, the relevant Minister referred to the fact that, in 1998, legislation had introduced an interim definition of datacasting. Following a review of the scope of datacasting services, the government considered that the definition should be modified and that the legislation needed to be clear about what kinds of services could be provided and about the distinction between datacasting and broadcasting services. The Minister said that there would be limitations placed on the audio material that datacasters could provide, the intention being primarily to prevent datacasters from operating as radio broadcasters.

40    The Minister said that datacasting licensees would be able to provide their customers with individual point-to-point connections to the internet, thereby increasing the range of business models available to datacasters. For example, he said, it would allow a datacaster to function as an internet service provider, providing connections to the internet rather than just content. He said that that would allow users of datacasting services to have access to programs such as video clips of news stories, or streamed audio and video services, where they were made available on websites. The Minister referred to current uncertainty as to whether services such as streamed audio and video obtainable on the internet were, legally, broadcasting services. He said that that was a generic issue relating to the convergence of broadcasting with other services and that it was proposed to refer the matter to the Authority for detailed consideration.

41    The Minister said that rules applying to datacasting services under the legislation would apply only to services provided in the broadcasting services bands spectrum and would not affect services delivered by other technical means. He said that the Authority would be provided with strong powers to enforce the distinction between datacasting and broadcasting and that datacasters would be required, as a group, to develop codes of practice dealing with, for example, access to undesirable material and handling of complaints.

42    In his speech on the second reading of the Bill in the Senate, the relevant Minister said that the regulatory regime for datacasting would be implemented through a new schedule 6 to the Broadcasting Act. He said that the regulatory approach would focus on the kinds or genres of programs and services that datacasters are allowed to provide. He said that there would be limitations placed on the audio material that datacasters could provide, the primary intention being to prevent them from operating as radio broadcasters. The Minister’s speech substantially repeated the second reading speech in the House of Representatives.

Report on Review of Streamed Internet Audio and Video Content

43    In March 2001, the Department of Communications and Information Technology and the Arts (the Department) published a report on a review of streamed internet audio and video content (the Review Report). It is common ground between PPCA and CRA that the substance of the material contained in the Review Report was before the relevant Minister when he made the Ministerial Determination. Both parties place some emphasis on that material.

44    The Review Report began by observing that, since the passage of the Broadcasting Act in 1992, there had been significant developments in internet technology and that it was now possible for television and radio programs to be streamed continuously over the internet in real time. Moreover, the Review Report said, those services could be received simultaneously by multiple viewers by means of a range of delivery platforms. That situation, it said, had resulted in legal uncertainty as to whether television and radio programs streamed over the internet conformed with the definition of broadcasting service contained in s 6(1) of the Broadcasting Act and, if so, whether they should be subject to regulation as a broadcasting service.

45    The Review Report referred to the fact that, to clarify the legal status of streamed television programs and radio programs delivered over the internet, the government had proposed a non-statutory review in the second reading speech in relation to the Digital TV and Datacasting Amendment. Section 216E of the Broadcasting Act required that a review be conducted before 1 January 2002 into whether, in the context of converging media technologies, streamed audio and video content obtainable on the internet should be regarded as a broadcasting service. The Review Report said that, although the review was not required to be conducted until 1 January 2002, industry concern emphasised that a more timely resolution was necessary. Accordingly, a review had been conducted in July 2000. That review was conducted by the Minister, with the assistance of the Department, and involved consultation with and consideration of advice from a number of interested parties including:

    The Australian Information Industries Association;

    The Internet Industry Association;

    The Federation of Commercial Television Stations;

    The Service Providers Action Network;

    Members of the Australian Information Economy Advisory Council; and

    the Authority.

CRA points out that, while there was consultation with the Federation of Commercial Television Stations, there was no consultation with CRA or its predecessor, representing commercial radio stations.

46    The Review Report referred to concern expressed by industry representatives at the prospect of television programs or radio programs made available over the internet being regulated as broadcasting services. The fact that legal uncertainty over streamed internet services had the potential to affect adversely the emerging internet industry in Australia was highlighted. The internet and information technology industries had called on the Government to provide urgent legal clarification on the status of streamed internet services. CRA again points to the absence of reference to the radio broadcasting industry.

47    The Review Report said that, during consultations, a clear consensus emerged in favour of internet audio and video streaming services not being regulated as a broadcasting service under the Broadcasting Act. The following arguments were advanced in support of that position:

    likely business models for internet content providers may be significantly different from that of traditional broadcasters;

    regulating internet services as broadcasting services would lead to a competitive disadvantage in the international economy, particularly if the Australian regulatory framework were significantly more restrictive than that of overseas competitors;

    the commercial success of communications and information technology companies was already subject to high risks, and regulation of internet services, such as audio and video streaming, would create additional barriers for those businesses and would curtail industry development in Australia; and

    streamed audio and video programming delivered over the internet has the potential to provide consumers with greater access to information and entertainment services, and regulating internet streaming services as broadcasting services may impede the growth of those new services, which offer an alternative to traditional broadcasting content.

48    In dealing with the legal framework, the Review Report stated that internet audio and video services were likely, at times, to be providing content that constituted television programs or radio programs. The Review Report said that, to the extent that they do so, it was arguable that they would fall within the definition of broadcasting service in s 6(1) of the Broadcasting Act. It said that it was unclear to what extent the exception in the definition for a service that makes programs available on demand on a point-to-point basis or dial-up services, would apply to internet streaming services. It said that there was some doubt as to whether streamed audio and video content would constitute services that provide programs “on demand on a point-to-point basis”.

49    The Review Report said that the meaning of the reference to dial-up services was not entirely clear and that it may be that those words did not extend the scope of the “on demand on a point-to-point basis” exception. It observed that many people access the internet through dial-up connections, by means of a modem and the telephone network, and that some use other means, such as a permanent connection by means of a broadband cable. The Review Report said that regulating internet streaming services on the basis of the means by which they are accessed would present significant enforcement and administrative difficulties, although it could be argued that contacting an internet protocol address over the internet to initiate access to streamed content is, in a functional sense, access to a “dial-up service” for the purposes of the Broadcasting Act, irrespective of whether or not the end user accesses the internet by dialling a telephone number or by other means.

50    The Review Report said that the matters described above should serve to demonstrate the complexities involved in deciding whether streamed audio and video services are broadcasting services within the meaning of the Broadcasting Act and the uncertainties associated with the current definition. It said that, if services providing television programs or radio programs over the internet were to be classified as a broadcasting service, those services would be subject to licence conditions under the appropriate broadcasting licensing regime. Depending on the nature of the service, persons providing such services would be required to hold, and comply with, the appropriate individual service licence, or comply with the conditions of the relevant class licence stipulated under the Broadcasting Act. The Review Report referred to the substantial penalties that could be imposed for the provision of unlicensed broadcasting services, or of services that breach licence conditions.

51    The Review Report suggested that the most appropriate means of clarifying the legal status of internet video and audio streaming would be a Ministerial Determination under the definition of broadcasting service in s 6 of the Broadcasting Act. It suggested that such a determination would have the advantage of being more flexible and giving effect to the decision more quickly than a legislative amendment. The purpose of a determination would be to provide clarity on the legal status of internet audio and video streaming services, not to alter the existing legal and policy framework governing digital television and datacasting services. The Review Report referred to the rules enacted by the Parliament covering the operation of datacasting services under the Digital TV and Datacasting Amendment. It said that those rules covered the delivery of audio and video material using the broadcasting services bands spectrum and that it was therefore neither necessary nor appropriate to extend the determination to cover services that used that spectrum.

Conclusion as to the extrinsic material

52    PPCA contends that the fundamental policy intention behind the Ministerial Determination was to address concerns, on the part of the then-developing internet industry, that audio and video streaming might fall within the definition of a broadcasting service, and hence be subject to the regulatory regime of the Broadcasting Act. It asserts that there is nothing in the extrinsic material that indicates that the purpose of the exception to the exclusion, as contained in the Ministerial Determination, was to include within a broadcasting service the internet activities of existing broadcasters. Rather, it says, the purpose was to preserve the application of the existing regulatory regime and to prevent the exclusion in the Ministerial Determination from being exploited to deliver unlicensed de facto broadcasting services using the broadcasting services bands. PPCA relies specifically on the contents of the Review Report.

53    PPCA says that it was envisaged that, with the commencement of digital broadcasting, some of the spectrum would be freed up for additional uses and that it was proposed that that part of the spectrum be used for new services, to be called datacasting services, which were to be regulated under the Broadcasting Act. It says that a regulatory regime was introduced that sought to ensure that datacasting licensees, who would be using, inter alia, the broadcasting services bands, would not broadcast matter equivalent to traditional television programs. Rather, it was envisaged that they would transmit material such as information and education programs, court proceedings, text and still images, interactive computer games and internet content, as provided for in schedule 6 of the Broadcasting Act, which was inserted by the Digital TV and Datacasting Amendment.

54    Finally, PPCA says, it was recognised that one use of datacasting services would be to provide internet access and that was reflected in the second reading speech summarised above. It says that it was envisaged, at the time, that the proposed new datacasting services may be a type of service in which a particular communication could be made using both the internet and the broadcasting services bands. PPCA says that, during the consultations referred to in the Review Report, a clear consensus emerged in favour of internet audio and video streaming services not being regulated as broadcasting services under the Broadcasting Act.

55    PPCA relies on the statement in the Review Report that the purpose of issuing the Ministerial Determination was to provide clarity on the legal status of internet audio and video streaming services, not to alter the existing legal or policy framework governing digital television and datacasting services. That, it says, reflected an intention that services that made use of the broadcasting services bands, a scarce resource, would be regulated separately from those that did not.

56    CRA, on the other hand, points to the emergence, in the mid 1990s, of the issue of convergence of technologies, in the context of the regulation of broadcasting, datacasting and internet services. It says that, by 1996, radio stations had begun to simulcast audio programs and the Authority had considered the use of internet technology in that process and had been satisfied that it was an activity conducted by a broadcasting service within the meaning of the Broadcasting Act. CRA points specifically to the contents of the 1996 Report. CRA says that, by 1998, the possibility of datacasting had emerged and the Broadcasting Act was amended so as to recognise a datacasting service as a service, other than a broadcasting service, where the delivery of that service uses the broadcasting services bands.

57    CRA says that the Digital TV and Datacasting Amendment made substantial amendments to the Broadcasting Act to ensure that datacasting services would not become de facto broadcasts. Concern arose on the part of the internet industry that television and radio programs delivered by internet service providers over the internet would fall within the definition of broadcasting service and therefore be subject to the regulation of broadcasters by the Broadcasting Act. However, CRA says, the commercial radio broadcasters did not have the same concern. It says that the government’s response was to issue the Ministerial Determination to provide the internet industry with a substantial degree of certainty. Thus, it says, the Ministerial Determination was issued to ensure that internet service providers were not to be classified as broadcasting services.

58    CRA emphasises that the Ministerial Determination was responsive to the concerns of the internet industry, in that it ensured that internet service providers were not to be classified as broadcasting services. At the same time, it says, care was taken to ensure that datacasters, regulated under the Broadcasting Act, could not avoid regulation in so far as they used the internet, by means of the broadcasting services bands, to deliver their services. It says that the extrinsic material makes clear that the exception to the exclusion was to prevent datacasting services from exploiting a loophole created by the exclusion, in order to avoid compliance with the existing rules under the Broadcasting Act that applied to them as broadcasting services.

59    The extrinsic material summarised above assists in putting the Ministerial Determination into an appropriate context. Clearly enough, it was intended to give some clarity in the context of an expectation of the development of datacasting. However, at the end of the day, the extrinsic material is of little assistance in resolving any ambiguity that arises as to the application of the definition to simulcast radio programs. The question must be resolved by analysis of the definition, as affected by the Ministerial Determination, having regard to the content of relevant provisions in the Broadcasting Act, and the purpose and object of the Broadcasting Act.

LINGUISTIC AND SYNTACTICAL ANALYSIS

60    The definition of broadcasting service in s 6 of the Broadcasting Act, as affected by the Ministerial Determination, must be construed in light of the purpose and object of the Broadcasting Act. It is desirable, therefore, to say something about the purpose and object of the Broadcasting Act.

61    Section 3 of the Broadcasting Act states that its objects include:

    the promotion of the availability to audiences throughout Australia of a diverse range of radio services offering entertainment, education and information;

    the encouragement of diversity in control of the more influential broadcasting services;

    promotion of the provision of higher quality and innovative programming by providers of broadcasting services; and

    encouragement of providers of commercial broadcasting services to be responsive to the need for a fair and accurate coverage of matters of public interest.

62    Section 4 of the Broadcasting Act provides that the Parliament intends that:

    different levels of regulatory control be applied across the range of broadcasting services, datacasting services and internet services, according to the degree of influence that different types of such services are able to exert in shaping community views in Australia;

    broadcasting services and datacasting services in Australia be regulated in a manner that, inter alia, will readily accommodate technological change and encourage the development of broadcasting technologies and datacasting technologies and their application and the provision of services made practicable by those technologies; and

    the internet carriage services supplied to users in Australia be regulated in a way that enables public interest considerations to be addressed, will readily accommodate technological change and will encourage the development of internet technologies and their application.

63    It is also necessary to say something about the scheme of the Broadcasting Act, in so far as it relates to the broadcasting of radio programs. That is necessary in order to demonstrate the context in which the phrase broadcasting service is used in the Broadcasting Act. The pivotal provision of the Broadcasting Act, for present purposes, is s 133, which provides that a person must not provide a commercial radio broadcasting service unless the person has a licence to provide that service. Under s 136, a person who breaches s 133 is guilty of a separate offence in respect of each day during which the breach continues.

64    A commercial radio broadcasting licence is, relevantly, a licence under the Broadcasting Act to provide a commercial radio broadcasting service. A commercial radio broadcasting service is a commercial broadcasting service that provides radio programs. A commercial broadcasting service is a broadcasting service that, relevantly, provides programs that appear to be intended to appeal to the general public, that are able to be received by commonly available equipment and are made available free to the general public, and that are usually funded by advertising revenue and operated for profit or as part of a profit-making enterprise. A program, in relation to a broadcasting service, is matter, the primary purpose of which is to entertain, educate or inform an audience, or advertising or sponsorship matter.

65    The word service appears in several places in the definition of broadcasting services in s 6 and in the Ministerial Determination. The word should be construed as having the same meaning wherever it appears, both in the language of s 6 and in the language of the Ministerial Determination. The word service, as a matter of ordinary English, has diverse meanings. For example (see the Macquarie Dictionary), it might signify:

    the supplying or supplier of articles, commodities or activities;

    the providing or provider of a public need, such as communications, transport and the like;

    the organised system of apparatus, appliances, employees and the like, for supplying a public need; or

    the performance of duties or work for another.

Thus service can signify:

    the person who supplies a benefit;

    the benefit that is supplied; or

    the means whereby the benefit is supplied.

66    The definition of broadcasting service in s 6, as affected by the Ministerial Determination, contains a number of elements as follows:

    A broadcasting service delivers radio programs to persons having the appropriate equipment: clearly enough, the word service must mean something other than the radio program that is the subject of the delivery; thus, a service must be something that is capable of delivering a radio program.

    That delivery uses the radiofrequency spectrum, cable, optical fibre, satellite or any other means, or a combination of those means: thus, the delivery may be effected by any means or by any combination of means; as indicated above, the means of delivery is something apart from the radio program that is the subject of the delivery; the delivery constitutes the service.

    A broadcasting service is not a service that makes radio programs available using the internet (due to the exclusion in the Ministerial Determination), unless it is a service that delivers radio programs using the broadcasting services bands (due to the exception to the exclusion in the Ministerial Determinaion): thus, only some services that make radio programs available using the internet are excepted from the exclusion in the definition, namely, services that deliver radio programs using that part of the radiofrequency spectrum that consists of the broadcasting services bands.

67    The reason for the distinction in the Ministerial Determination between making a radio program available and delivering a radio program is not entirely clear. The distinction may relate to the fact that the internet is not a means of delivery, such as is described in the first part of the definition. Thus, the internet may use cable, optical fibre or other means of delivery but the internet also involves the various protocols that regulate the manner in which content passes by those means. A radio program is delivered using the broadcasting services bands but does not require protocols such as are required for the use of the internet.

68    The above analysis indicates that the word service signifies something other than the radio programs, being the content that includes, relevantly, the Foreign Land Recording. Rather, service is the provision, by one means or another, such as the internet or terrestrial transmitters, of that radio program. The same radio program may be delivered by different services. Thus, DMG delivered its radio program by one service that used the internet and by another service that used the broadcasting services bands.

69    A broadcasting service is the delivery, in a particular manner, of a radio program, consisting of matter intended to entertain, educate or inform. Thus the delivery of the radio program by transmission from a terrestrial transmitter is a different broadcasting service from the delivery of the same radio program using the internet.

70    Each commercial radio broadcasting licence is subject to the condition that the licensee will not provide commercial radio broadcasting services under the licence outside the licence area. Each licence area is a fixed geographical area within Australia. Access to the internet can be obtained anywhere in Australia. Accordingly, if a CRA member provides commercial radio broadcasting services by way of the internet, it would be providing those services outside the licence area. That consequence indicates that the construction contended for CRA would create real difficulties for a licensee such as DMG. There are some exceptions to that prohibition. The exceptions include that the provision of the services outside the licence area occurs accidently, or as a necessary result of the provision of commercial radio broadcasting services within the licence area. None of those exceptions would excuse DMG from a breach of the condition of its licence in the circumstances set out in the agreed facts.

71    Clearly, a service that makes radio programs available using the internet will not be a broadcasting service for the purpose of the Broadcasting Act unless the service that makes radio programs available using the internet also uses the broadcasting services bands. That is to say, a service might:

    be delivered by the use of any means, including the broadcasting services bands;

    be delivered or made available using the internet; or

    be delivered or made available using the internet and the broadcasting services bands.

The first and third categories are broadcasting services. The second category is not a broadcasting service. One of DMG’s services is in the first category. Another of DMG’s services is in the second category. None of the services provided by DMG is in the third category. Only the service provided by DMG that is in the first category is a broadcasting service and only that service is within the licence granted by the Member Agreement. DMG’s service that is in the third category is not within the licence. The streaming of the sounds of the Foreign Land Recording by DMG on 12 January 2010 was not within the licence granted under the Member Agreement.

CONCLUSION

72    The appeal should be upheld. The orders made on 15 February 2012 should be set aside. The appellant should be directed to bring in short minutes of orders that should be substituted for the orders made by the primary judge in order to reflect these reasons. CRA should pay PPCA’s costs of the appeal and of the proceeding at first instance.

I certify that the preceding seventy two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Emmett, Besanko and Yates.

Associate:

Dated: 13 February 2013