Reforming free-to-air TV will not only improve quality for viewers, it will also ensure the future of the ABC, argues Stephen King.

Free-to-air television in Australia needs reform. Don’t believe me? Then turn to channel 99 and start going backwards “down the dial”. Extra2, Extra, FreshideasTV … The infomercial channels outnumber the “real” television channels. How did we end up with a system of free-to-air (FTA) television that wastes valuable and scarce spectrum on non-stop advertising for mops and exercise equipment?

The Australian model of FTA television is based on a 1950s approach to spectrum rights and obligations. The FTA networks each control a block of spectrum. With analogue technology, lots of spectrum was needed for each channel. With modern digital technology that spectrum can be used to simultaneously broadcast a number of channels. But the spectrum is tied to the broadcast licenses. So a FTA channel cannot “sub-let” its spectrum as is possible, for example, in the UK.

All Australian FTA networks have wide-ranging, channel-specific content obligations. For example, under the Broadcast Services (Australian content) Standards 2005, networks have explicit obligations on Australian adult drama, Australian children’s content, Australian children’s drama and Australian documentaries. These obligations apply to each channel but can be avoided by “datacasting”. In practice, this is a fancy name for 24 hour infomercials. Hence Extra, FreshideasTV and so on.

Anyone who has been to the UK recently and experienced their version of FreeView, with more than 50 TV channels, and a vibrant, well-funded public broadcaster, will know that Australia is lagging far behind.

In the Orwellian world of Australian FTA television (all FTA television channels are equal, but some are more equal than others) the government-owned FTA networks, like the ABC, face “commercial” pressure to have high rating programs. The ABC lacks a unique role because all FTA networks face similar obligations. And because the ABC faces a year-by-year fight for government funds, it tries to justify its funding on the basis of being “like” the commercial networks (popular and high rating) rather than on meeting community obligations that are not met by commercial broadcasters.

From an economics perspective, this is bizarre. If programs rate highly, commercial FTA stations will show them. The ABC should be catering to those groups who are not well served by mainstream commercial television.

Put simply, if viewers like the ABC then they will have to directly support it.

So how do we reform FTA television and what is the role of the ABC in a reformed system?

A first step is to recognise that, with the ABC and SBS able to broadcast multiple channels, the need for commercial channels to have specific content obligations is reduced. If we want dedicated children’s television, we have ABC3. How about an alternative view of the news? Then ABC24. Australian content? That should be the role of ABC1. Ensuring inclusive coverage for Australia’s diverse ethnic mix? SBS1 fits in.

It is not necessary that every network – far less every channel – has specific content requirements. This does not mean a free-for-all on commercial networks. Broad standards need to apply and in certain areas, such as news, the desire for a variety of “voices” may lead to some programming requirements. However, so long as the ABC and SBS are meeting specific community needs, the commercial channels do not need to be bound to meet those same needs. The commercial networks can chase ratings and advertising dollars while the ABC and SBS can ensure coverage of areas that are neglected by the commercial networks.

The commercial networks should not, however, receive a free kick. Reform needs to focus on the commercial networks and their spectrum licences. At a minimum, the spectrum licences should be reformed so that spectrum can be sub-let and the licences have a well-defined finite life.

The big winners from these reforms will be the government-owned networks. In particular, the ABC will have a clear role to use its multiple channels to serve community needs. It will not have to be a me-too copy of the commercial networks. However, this may require a change to the funding model.

The BBC, for example, receives dedicated revenue through television licensing. The ABC also needs secure base funding. So a third step in reform is to change the funding model. This doesn’t mean a return of television licensing. Australia abolished this in the 1970s. But providing the ABC with a stable funding model is necessary if it is to take on key community service obligations.

Without reform, however, the future of ABC television looks bleak.

Given the increase in FTA channels from digitisation, the range of other media available through the internet, and the obligations on commercial FTA channels, the ABC television network currently lacks a rationale. And it is a burden on scarce taxpayer funds. So change is inevitable.

This may mean scrapping ABC FTA television, although that would be a courageous political move. More likely, without reform, the ABC will evolve into a structure like the US Public Broadcasting Service (PBS). It will receive some government funding but will also rely on viewer subscriptions and sponsorship. Put simply, if viewers like the ABC then they will have to directly support it.

Reforming FTA television also requires political courage. The commercial FTA networks like limited competition and are happy to waste spectrum on infomercials rather than face more competitive content. Reform will require strong negotiation from our political leaders. But the end result will be better choice for viewers and a clear role for the ABC.

Stephen King is Professor, Department of Economics, at Monash University.

This article was first published at The Conversation.