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«COMMERCIAL RADIO INQUIRY Report of the Australian Broadcasting Authority Hearing into Radio 2UE Sydney Pty Limited February 2000 Sydney ISBN 0 642 ...»

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After further allegations appeared in the media concerning financial arrangements between 2UE’s breakfast program presenter Alan Jones and commercial interests, the Authority announced that it would be widening the scope its inquiry to include 2UE broadcasters other than John Laws. The Authority issued notices under section 173 of the Act requiring various persons to produce relevant documents to the Authority.

As part of the inquiry process, the Authority decided that a Panel (comprised of members of the Authority) would conduct a public hearing into certain of the above-mentioned allegations as they related to Mr Laws, Mr Jones and 2UE. Pursuant to section 188 of the Act, a Notice of Public Hearing appeared in the Sydney Morning Herald on 7 September 1999.

The hearing commenced on 19 October 1999 and concluded on 3 December 1999. The full terms of reference for the hearing can be found in Schedule One.

TALKBACK RADIO IN AUSTRALIA

Characteristics Talkback radio1 in Australia generally consists of a mix of telephone calls from listeners, pre-arranged interviews (often with politicians and others involved directly in issues of current interest), editorials, station or program promotions, commentary, advertisements, regular spots (such as ‘The Whole Story’ on ‘The John Laws Morning Show’), newsbreaks and music.

The Macquarie Dictionary defines talkback radio as ‘a radio program in which members of the public participate by telephone’.

All of the mainland state capital cities in Australia have commercial AM radio stations using talkback as an important part of their format: for example, 2UE and 2GB in Sydney, 3AW in Melbourne, 4BC in Brisbane, 5AA and 5DN in Adelaide and 6PR in Perth.

While one of the primary purposes of talkback-oriented programs is to entertain, this does not preclude such programs from also being informative. The Authority has always taken the view that talkback programs can properly be regarded as current affairs, that is, programs focussing on social, economic or political issues of current relevance to the community.

The Authority has conducted a number of investigations into talkback programs and assessed these programs against those clauses of the Codes that deal with current affairs programs.2 The licensees of the programs under investigation have accepted this method of assessment, as has the Federation of Australian Radio Broadcasters.

The personalities and opinions of talkback presenters tend to dominate the programs they host. The success of talkback hosts largely depends on their ability to talk easily on a wide range of issues and topics (including those of a social, political and economic nature) and to elicit responses from callers and would-be callers. This can lead to difficulties in distinguishing between the various elements of a talk-oriented program, such as advertisements, commentary, and the reporting of factual material.

Power And Influence The fact that the programming of one of Sydney’s most consistently popular radio stations, 2UE,3 is substantially talkback-oriented, provides convincing evidence of the continuing popularity of talkback radio.4

The success of talkback radio format may be attributed to many factors, including:

♦ the opportunity provided by talkback radio for people directly and (usually) anonymously to express themselves to a large audience;

♦ the perception that talkback radio is spontaneous and unpredictable; and ♦ talkback radio’s ability to provide company and keep people in touch with the views of others.

Mr John Brennan, 2UE’s former Program Manager, stated that Mr Laws and Mr Jones were ‘the two most powerful men in the country, after the Prime Minister’.5 Former Prime Minister The Hon. Paul Keating has been quoted as saying ‘Forget the Press gallery in

For example:

ABA Investigation 265 (96/0149 – 2MW – Steve Schumanski);

ABA Investigation 553 (98/0207 – 2UE – Alan Jones);

ABA Investigation 559 (97/0677 – 2UE – John Laws);

ABA Investigation 561 (98/0268 – 2UE – Stan Zemanek);

ABA Investigation 567 (98/0300 – 2GB – Mike Gibson);

ABA Investigation 619 (98/0486 – 3AW – Steve Price); and ABA Investigation 651 (98/0923 – 5AA – Bob Francis).

Of the eight Sydney radio audience surveys conducted by ACNielsen from August 1998 to September 1999, 2UE proved to be the most listened-to Sydney commercial radio station in five of the eight surveys, the second most listened-to (behind 2DAY FM) in two of the surveys, and the third most listened-to (behind 2DAY and 2MMM) in the remaining survey.

Refer to section ‘Ratings‘ on page 9 and Schedule Seven Talkback – Emperors of the Air; Phillip Adams and Lee Burton; Allen & Unwin; 1997.

Canberra. If you educate John Laws, you educate Australia’.6 At a dinner celebrating Mr Laws’ 40th anniversary in Australian radio, Mr Keating also said that the voice of Mr Laws ‘carries more authority than I think any other in radio does’. In an on-air interview with 3AW’s Neil Mitchell on 3 December 1999, Prime Minister John Howard said ‘I think you get more out of this type of exchange (talkback radio) than just about any other kind of media contact between a member of parliament and a journalist’.7 ‘The John Laws Morning Show’ is syndicated through 2UE’s Sky Radio Division and, as at 28 June 1999, was being broadcast on 77 radio stations throughout Australia,8 to a potential listening audience of over 10 million people.





The opinions of such announcers carry considerable weight with many listeners, particularly regular ones. Advertisements read live-to-air by these announcers (especially if the advertisement includes an explicit personal endorsement from the announcer) are worth more to advertisers than pre-recorded advertisements, due to the perceived authority of the host when talking about the product being advertised.9 RADIO STATION 2UE Radio 2UE Sydney Pty Limited (‘2UE’) is the licensee of the commercial radio broadcasting service broadcasting under the licence with call sign 2UE (‘the licence’). A list of the current controllers of 2UE can be found in Schedule Six.

Ratings 2UE has maintained consistently high ratings in Sydney over a period of some years. For example, the ratings released in December 1999 indicated that 2UE was in third place overall (in the previous survey period it had been in second place overall).10 Mr Jones’ program has been rated number one in Sydney for 62 consecutive surveys over a period of eight years. The program regularly commands in excess of twenty per cent of the Sydney market.11 In rating surveys, Mr Laws has been rated number one in four different decades, in 25 different years and on three Sydney radio stations. Mr Laws has been rated in 162 surveys and has been placed first in 104 of them.12 Ratings figures released December 1999 showed Mr Laws remained third in mornings.13

For more detail on the ratings of 2UE, see Schedule Seven.

‘Talkback – Emperors of the Air’; Phillip Adams and Lee Burton; Allen & Unwin; 1997.

As reported by Gabrielle Chan in The Australian on 6 January 2000.

29 stations in NSW, 16 in Queensland, 10 in Western Australia, 9 in Victoria, 5 in South Australia, 5 in Tasmania, 2 in the Northern Territory and 1 in the ACT.

A comparison of the rates charged for these two different forms of advertising indicates the premium paid for live reads over pre-recorded commercials.

Sydney Morning Herald, December 8 1999, p. 10 Exhibit 69, p. 21 and Sydney Morning Herald, December 8 1999, p. 10 Exhibit 69, p. 23 Sydney Morning Herald, December 8 1999, p. 10

Codes Compliance History

Since October 1993, the Authority has commenced 11 investigations into possible breaches by 2UE of either the Act, a licence condition or a code of practice (one of these investigations is yet to be finalised). Of the ten completed investigations, two resulted in a finding that a code of practice had been breached: one breach related to complaints handling, the other to clause 2.2(a) of the Codes (accurate presentation of factual material in a current affairs program).14 Representatives of the Authority (including the Deputy Chairman) met with on-air presenters and staff of 2UE in July 1998. This meeting sought to address a number of issues which had arisen as a result of 2UE’s interpretation of the Codes of practice dealing with complaints handling procedures and, in particular, 2UE’s view as to what constituted a valid complaint.

In Attorney-General for the State of New South Wales v Radio 2UE Sydney Pty Limited & John Laws, both 2UE and John Laws were found guilty of a serious contempt of court. Mr Laws had made on-air comments regarding a trial that was still proceeding but which he mistakenly believed had ended as a result of a plea bargain. While the contempt of court issue was a matter outside the Authority’s jurisdiction, the Authority investigated the broadcast in order to determine whether there had been a breach of Code of Practice 2. At the conclusion of its investigation the Authority determined that the licensee of 2UE had breached Code 2.2(a) as it had not ensured that the factual material presented by Mr Laws during the broadcast was accurate. The veracity of the material had not been adequately checked and it should not have been broadcast without such checking having taken place.

2 Regulation of Commercial Radio Content THE BROADCASTING ACT 1942 Under the Broadcasting Act 1942, the content of commercial broadcasting services was regulated by mandatory standards.15 These were developed, in consultation with the industry and the public, by the Authority’s predecessors - the Australian Broadcasting Control Board (ABCB) and the Australian Broadcasting Tribunal (ABT). These standards applied to a section of the broadcasting industry as a whole (eg. commercial radio or commercial television) rather than to individual licensees.

A member of the public who was concerned about a possible breach of a standard could complain to the ABT about the matter.16 If the complainant required the ABT to initiate a public inquiry into whether the ABT should exercise one of its substantive powers (eg. by revoking a broadcast licence), then the ABT was obliged to do so.

Radio Program Standard (RPS) 5 dealt with news programs while RPS 8 dealt with current affairs programs. Radio Advertising Conditions (RAC’s) dealt with advertisements on commercial radio. These standards and conditions were treated in the same way and carried the same weight. A table comparing RPS and RAC with the current Codes can be found at Schedule 16.

THE BROADCASTING SERVICES ACT 1992 The Act, which came into force on 5 October 1992, established a new framework for the regulation of program content issues. With the commencement of the Act, the ABT was abolished and the Authority took over the role of broadcasting regulator.

Under the Act, the primary responsibility for ensuring that programs reflect community standards and for handling complaints about program content now rests with the broadcasters themselves.17 The former system of program standards determined by the ABT was replaced by a system of industry-developed codes of practice. Compulsory standards were, however, retained for Australian content on television and children’s television regulation.

Section 123 of the Act lists those matters to which codes must relate. This list broadly corresponds to the matters covered in the previous ABT standards and includes promoting accuracy and fairness in news and current affairs programs and such other matters relating to program content as are of concern to the community.

Standards were defined as rules relating to programs or advertisements and having the force of a licence condition.

But only if the complaint was ‘legitimate’ (ie, not frivolous, vexatious or an abuse of the complaints process) Subsection 123(1) of the Act states that it is the intention of Parliament that industry groups representing commercial broadcasting licensees (which includes commercial radio broadcasting licensees) ‘develop, in consultation with the Authority and taking account of any relevant research conducted by the Authority, codes of practice that are to be applicable to the broadcasting operations of each of those sections of the industry’.

Subsection 123(4) of the Act states that the Authority must include a code of practice in the

Register of Codes of Practice if it is satisfied that:

♦ the code of practice provides appropriate community safeguards for the matters covered by the code; and ♦ the code is endorsed by a majority of the providers of broadcasting services in that section of the industry; and ♦ members of the public have been given an adequate opportunity to comment on the code.

The Act gives the Authority responsibility for monitoring the broadcasting industry. This includes monitoring compliance with codes of practice and monitoring the effectiveness of these codes in reflecting prevailing community standards and concerns. The Authority investigates complaints from the public that relate to a potential breach of a licence condition or the Act, as well as unresolved complaints from the public that relate to a code or codes of practice.

With regard to a breaches of licence conditions or the Act, the Authority has various powers

including, in certain circumstances, the power to:

♦ issue a notice requiring the offending broadcaster to take action to ensure compliance; or ♦ refer the matter to the Director of Public Prosecutions; or ♦ suspend or cancel a licence; or ♦ impose an additional condition on the licence.

It should be noted that a breach of a code of practice is not a breach either of a licence condition or of the Act. In an appropriate case, the Authority has the power under section 43 of the Act to vary or revoke a condition of a broadcaster’s licence or impose an additional condition on the licence.

Schedule 2 of the Act sets out a number of mandatory licence conditions relating to content, including rules governing election advertising and the broadcasting of political matter. While the Authority cannot alter these mandatory conditions, it does have the power under the Act to impose additional conditions.



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