40-4 1-42-43.

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA.

SECOND REPORT

OF THE

CANBERRA, 28TH JUNE, 1943.

Presented pursuant to Statute ; ordered to be printed, 30th June, 1943.

,CW of Paper.-•I'svparHtKm, x;ot given ; (ilu copies ; approximate ro?r of printing and publishing. £14-3

Printed and Published for the GOVERNMENT of the COMMONWEALTH of AUSTRALIA byL. F, JOHNSTOH, Commonwealth Government Printer, Canberra.

(Printed in Australia.)

F.3999.-—No, 100. [Group H.]—PEICE 9D.

MEMBERS OF THE PARLIAMENTARY STANDING- COMMITTEE ON BROADCASTING.(Appointed 3rd September, .1942.)

Chairman . . . . Arthur Augustus Calwell, M.H.R.Vice Chairman .. . . The Honorable Sir Charles William Clanan Marr. K.C.V.O., D.S.O., M.C., M.H.R.

Senate. House of Representatives.

Herbert Claude Barnard, M.H.R.Senator Stanley Kerin Amour.Senator Walter Jackson Cooper, M.B.E.Senator the Honorable Herbert Hays.

Herbert Victor Johnson, M.H.R.Archibald Grenfell Price, C.M.G., D.Litt.. M.H.R.*WilIiam James Frederick Riordan, M.ILR.

• Ceased being a member or the Standing Committee alter appointment as Chairman of Committees on 22nd June, 1943.

CONTENTS OF SECOND REPORT.PAGE.

Newcastle broadcasting facilities . . .. .. .. . . .. .. . . .. 4Ordering and prohibiting of broadcasts . . .. .. .. . . .. .. .. 5National programme administration costs . . . . . . .. . . , . .. .. 7The Charlton case .. .. .. .. .. . . .. .. .. .. 7Australian music composers . . . . . . . . . . . . . . . . . . 9Programme networks and multiple ownership of stations . . . . .. .. . . .. 9Studios and administrative offices for national programme service .. .. .. .. ,, 11

SECOND REPORT OF THE PARLIAMENTARY STANDINGCOMMITTEE ON BROADCASTING.

In accordance with section 85 of the Australian Broadcasting Act 1942, we present to Parliamentour second report on matters which have been referred to us by the Minister.

ABBREVIATIONS.A.B.C.—means the Australian Broadcasting Com-

mission.The Gibson Committee—means the Joint Parlia-

mentary Committee on Broadcasting under thechairmanship of Senator the Honorable W. G.Gibson, whose report was presented to Parliamentin March, 1942.

SUMMARY OF CONCLUSION'S.The following is a summary of our conclusions:—

(1) An additional national, and at least one addi-tional commercial, station should be pro-vided at Newcastle when circumstancespermit. The national station should beused mainly for local programmes, and thestatus of the A.B.C. representative at New-castle should be appropriately raised. Toassist him in connexion with programmeproposals, the formation of a local citizensadvisory committee under the auspices ofthe A.B.O. would be helpful. (Para. 12).

(2) Newcastle, with its population of 193,000within 25 miles, is three times larger thanany other extra capital city. For thepurpose of church broadcasts, the New-castle district should be regarded as a Statewithin a State, thus facilitating a modifica-tion of the A.B.O.'s centralization policyto permit of the restoration of local churchservice broadcasts. Pending the establish-ment of the additional station, the existingrelay station should be used for this pur-pose. (Para. 13.)

(3) The A.B.O. could well adopt the principle ofspecial treatment for non-capital citieswhich reach a population of 100,000.(Para. 12.)

(4) As the A.B.C. is an independent body, withan obligation to maintain an impartialattitude to politics, any difference ofopinion between the Commission and theSecretary of the Department of Informa-tion as to the party political significanceof any broadcast ordered by that Depart-ment under National Security Regulationsshould be referred to the ParliamentaryStanding Committee. (Para. 35.)

(5) When the radio news session includes a Par-liamentary Party political statement, theCommission should take the initiative ofprocuring an expression of the opposingviewpoint from the appropriate Parliamen-tary spokesman, for the purpose of inelud-it in a news session as soon as possibleafter the first statement received radiopublicity. (Para. 40.)

(6) The powers of managerial and functionalexecutives of the A.B.O. should be compre-hensively defined, but before their dele-gated powers are finally decided upon theOommision's centralization policy shouldbe re-considered. (Para, 47.)

F.3999.—2

(7) Station 3OV (Oharlton) should be permittedto transfer its activities to Maryborough, buta proposal to give the station clear channelworking should not be proceeded with, asthis would be unfair to the neighbouringBallarat and Bendigo stations, both ofwhich have to share their channels withother stations and were in the broadcast-ing business before 3OV. It would also beunfair to permit the station's power to beincreased to 2000 watts, even if this weretechnically practicable, as the Ballarat andBendigo stations both operate on the samepower as 3OV (500 watts). (Paras. 70-72.)

(8) All stations which conduct " H i t Parades"and similar sessions should revise theirpolicy with the object of including a greaterproportion of Australian compositions, inview of their obligation under section88 (1) of the Broadcasting Act to giveencouragement to the development of localtalent. (Para. 77.)

(9) Networks should be required to functionunder written agreements with stations,advertisers, programme producers andothers associated with their activities.There should be Ministerial approval ofthe general terms of such agreements,which should cover a period not exceedingtwo years and should be contingent on thestations concerned securing renewal oftheir licences year by year under section46 of the Broadcasting Act. If the generalterms of the agreements contemplate apolicy of granting discounts and other con-cessions to advertisers, the Postmaster-General might call upon the networkorganization concerned to show cause whythis policy should be allowed. The net-works should also be required to keep properaccounts and to supply annual statementsto the Minister. (Para. 92.) To facili-tate supervision of future developmentsadditional data should be given in the pro-fit and loss accounts of commercial stations,and certain statistics should be published inthe Postmaster-General's annual report.(Paras. 94 and 95.)

(10) No extension of multiple ownership of stationsshould be .sanctioned. (Para. 99.)

(11) In order to expedite construction of its newstudios and administrative offices after thewar, the AJB.O. should give further con-sideration to the completion of workingdrawings and specifications now, and allthe authorities concerned should take stepsto ensure that the transfer of the Com-mission's Head Office to Canberra iseffected with the least possible delay afterthe cessation of hostilities, (Paras. 108-9.)

NEWCASTLE BROADCASTING- FACILITIES.Of all the witnesses we have heard, none impressed

us more than those who urged restoration of localreligious broadcasts at Newcastle.

2. For eleven years these broadcasts from the localregional station (2NO) were a regular feature, butthe facilities were withdrawn under the policy winchthe A.B.C. introduced from the beginning of 1942, andunder which religious services within New SouthWales and within each of the other States are broad-cast direct or relayed from the capital city stations.

3. The plea for the restoration of the facilitiescomes not only from the clergy of all the FreeChurches, but also from a representative deputation ofcitizens, and is supported by a petition signed bybetween 4,000 and 5,000 residents, whose number, it isstated, could have been doubled if more time had beenallowed for circulation of the petition.

4. I t has been pointed out that people in hospital.the aged, and people who cannot attend, church servicestemporarily, feel strengthened" by a broadcast fromthe church with which they are familiar and withwhich they have had some association. I t is con-tended that the broadcasts from Newcastle churcheswere traditionally valued in districts as far north asQueensland, and that the people in. the outback areasparticularly, who regard Newcastle as their capital,derived special benefit from the local sessions to whichthey had so long been accustomed.

5. On the other hand, Bishop Batty, of the Churchof England, Newcastle, prefers the Commission's pre-sent policy.

6. The A.B.C. has explained to us that its decisionis part of the Commission's rationalization policy inconnexion with programmes from regional stations. Inits review of arrangements for the broadcasting ofchurch services in 1941« it readied the conclusion thatit was unfair for towns like Albury, ilorsliarn, &c.; tohave special programme facilities because there hap-pened to be a broadcasting transmitter in the locality,while cities like Ballarat, Bendigo, &c, were excludedbecause a national station did not exist in the neigh-bourhood. For this reason the A.B.C. decided that inthe interests of listeners it would be preferable to makeavailable to the widest, possible audience the bestservice of each, type that could be obtained, no matterwhere it originated. The Commission considered thatthe authority most qualified to determine which ser-vices should be broadcast (after the respective alloca-tions as to numbers of services on a census basis hadbeen made) was the head of the particular denomina-tion in each State, or in the Commonwealth in the caseof interstate services.

7. We realize that the Commission's attitude isconsistent with a policy which places all extra-capitalcities on the same basis, but from our examination ofcomparative conditions in relation to Newcastle'sbroadcasting facilities, we feel that the city has claimsto special consideration.

8. During a visit to the city we heard evidence fromrepresentatives of the Civic authorities, the NewcastleTrades Hall Council, the Newcastle Federal ElectorateCouncil of the Australian Labour Party, the Chamberof Commerce, the Returned Soldiers' League, andothers. From the points of view of population, thespecial nature of the industries, the skilled local talentavailable, and the bad reception of programmes fromSydney, it was held that Newcastle should receive thesame consideration as a capital city, with, the right topresent special features in its programmes and todirect the attention of listeners to important aspects ofthe life of the city and district. It was claimed that itstechnical college is particularly well equipped, that

well-qualined scientists and other experts are avail-able to give talks on technical subjects and that itsmusical talent is well above the average. A. proposalto establish a university college in the city is underconsideration.

9. We were impressed with these representations.As is well known, Newcastle is a large and growingcity, the home of many of Australia's' most importantindustries, and the centre for a prosperous and vigorousdistrict. Its population of 246,000 within a radiusof 50 miles, and. 198,000 within. 25 miles, comparesfavorably with that of certain, capital city areas mAustralia. Yet Newcastle has only one nationalstation (which only caters for local interests to a veryminor extent), and one commercial station, comparedwith two national and two commercial stations atHobart, and one national and two commercials atLauneeston, and two nationals and five commercials atPerth.

10. Apart from the capital cities, no other city inthe Commonwealth is anything like the size of New-castle. The next largest is Bailarat, whose 66,000people within 25 miles are only one-third of the popu-lation of Newcastle within the same distance. Bothare approximately the same aerial distance from then'respective capitals, but, while BaiJarat experiencesreasonably satisfactory reception from the Melbournenational stations, reception of the Sydney programmesat Newcastle (except those relayed) is very unsatisfac-tory on account of a combination of disabilities 'arisingfrom the topography of the country, the location of thedistrict in relation to the tropical zone, and highernoise level due to industrialization.

11. The need for additional stations has been accen-tuated since the revocation of the licence of 2HD abouttwo years ago under National Security Regulations. Asignificant fact brought to our notice was the difficultyexperienced in arranging tune for the CommonwealthTreasurer when opening a loan, campaign m New-castle. There are on record in the Post Office as manyas 31 applications from various individuals andorganizations for commercial station licences at iMew-eastle, dating as far back as 1928. Probably manyof these applicants are no longer interested. At allevents, only four have made representations to us, not-withstanding the publicity given to our visit by thelocal press and by the newspaper reports of the evidencetendered. These four, in chronological order of appli-cation to the Post Office, are the Trades Hall Council,Newcastle (1934), the Church of England, Newcastle(1937), the Returned Sailors and Soldiers' League,Sydney (1941). and the Newcastle Federal ElectorateCouncil of the Australian Labour Party (1942).

12. In our opinion, for the purpose, of broadcastingfacilities, the exceptional circumstances at Newcastlejustify the city being placed in the same category ascapital cities with comparable population (Perth andHobart), and an additional national station and atleast one additional commercial station should be pro-vided at the earliest possible date. The additionalnational station should be used mainly for local pro-grammes and the status of the A.B.O. Newcastle repre-sentative should be appropriately raised. To assisthim in connexion with programme proposals, the forma-tion of a local citizens advisory committee under theauspices of the A.B.O. would be helpful. We recom-mend accordingly, subject to any rationalizing ofbroadcasting decided upon, and suggest that in theyears to come the A.B.O. could well adopt the principleof special treatment for non-capital cities which reacha population of 100,000.

13. tinder the principle suggested we consider thatfor the purpose of church broadcasts, the Newcastledistrict should be regarded as a State within a State,

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OEDEEING AND PEOHIBIT-ING OFBROADCASTS,

.1.7. in our i'irsi iieporr. to Parliament, we drewattention to certain differences between the AustralianBroadcasting Act 1042 and the National Security(Information) Regulations,

18. Tile Broadcasting Act is administered by thePostmaster-General and the National Security (Infor-mation) Eegulations are administered by the Ministerfor Information. The same Minister holds bothportfolios.

19. Under the Broadcasting Act, power to orderbroadcasts of public interest is vested in the Postmaster-General and his direction must be in writing. Underthe National Security Eegulations the Secretary of the,Department of Information is given greater power.He may give orders for broadcasts orally and maydelegate Ms power to others.

20. We reported that in the circumstances explainedto us by the Secretary of the Department of Informa-tion, the differentiation in the powers is justified in

cases of emergency, but that we were making furtherinvestigations in regard to certain aspects. We nowreport the result ol: those investigations.

21. Under the Broadcasting Act, the Postmaster-General has power to prohibit, as well as to order,broadcasts. Under the National Security Eegulationsa general power to order broadcasts is conferred, butthe regulations are silent in regard to any generalpower to prohibit (except in cases of special emergencyraider an order from the Minister for Defence, for theperiod covered by the order).

22. Under the .Broadcasting Act tiie Commission isrequired to include, in its annual report to Parliament,details of cases in which the Minister (the Postmaster-General) has exercised his power under that Act toorder or prohibit broadcasts, as well as any cases inwhich he has ordered or prohibited broadcasts otherwisethan in pursuance of the provisions of the Act. Theobject of this requirement (which was included in theAct on the recommendation of the Gibson Committee)is to subject a contemplated instruction to a moresevere test of propriety or expediency than it mightbe called upon to stand if it were not to be made publicat a later date, and. also to give Parliament an oppor-tunity of judging whether the nature or extent of theMinisterial intervention was appropriate or desirable.An example of such an instruction would be one direct-ing the Commission to broadcast something of a partypolitical character which the Commission would notnormally authorize without arranging for otherparties to broadcast their views on the subject.

2o. The National Security Eegulations do not con-tain similar provision, that is to say, it is not obligatoryfor the Commission to report to Parliament details oforders given under those regulations by or on behalfof the Minister for Information. Nevertheless, undersection 42 of the Broadcasting Act, the Commissionis obliged to report on its operations during the year,and in complying with that requirement it could, if itdeemed fit, report details of orders received under theNational Security Regulations.

24. With the foregoing in mind, we have consideredcertain incidents brought to our notice by the Com-mission.

25. In December, 1942, the Minister for AircraftProduction asked the Commission whether arrange-ments could be made for a selected speaker to broadcast" the case against the merging of the A.M.F. with theA.I.F., and the proposed amendment of the DefenceAct to provide for the conscripting of men for militaryservice in areas of the South-West Pacific outside Aus-tralia". The Commission declined the request on theground that up to then it had not allowed any presenta-tion of views on the subject, but promised that in theevent of arrangements being made later for the broad-easting of varying viewpoints, the application wouldreceive further consideration.

26. On 10th February, 1943, the Secretary of theDepartment of Information arranged a broadcast bythe Minister for the Army, over national and commer-cial stations, entitled " The Australian Army ". TheCommission was not supplied with, the script before-hand, and it considers that the broadcast was a " partypolitical talk on a bill which was actually being debatedin Parliament at the time, and was the subject of sharpcontroversy both inside and outside Parliament ".- TheCommission's view is " if that sort of broadcast can beforced on it by the Secretary of the Department ofInformation, there is no limit to the propaganda thatcould be broadcast by a Government without any powerin the Commission to prevent it ".

27. On 22nd _ February, 1943, the Leader of theOpposition, at his request, was allowed by the Commis-sion to broadcast on the same subject, but whereas the

6

talk by the Minister for the Army was given over bothnational and commercial stations, the OppositionLeader's was restricted to the national service.

28. Another incident related to an objection by theCommission to statements in a script submitted by theSecretary of the United Trades and Labour Council ofSouth Australia for broadcasting in the series of weeklytrade union talks arranged by the Menzies Governmentand continued by the Fadden and Curtin Governments,

29. As the issue is a very important one, on whichthere is conflict of opinion between the Commissionand the Secretary of the Department of Informationon the question whether the proposed broadcast dealswith party politics, we quote some extracts from thescript:—

"The essential basis of our planned democracy must beproduction for use and not for profit. War-time controls inindustry and agriculture must be maintained to avoid thescramble for profits. India, both in the centre and in theprovinces, must be given full responsibility now. The post-war world will have the choice of two paths, one leading toa new order on the Socialist basis, the other leading to theend of our civilization. The only real solution to the pro-blems mentioned can be found in Labour objective; in thesocialization of industry, production, distribution and ex-change; in the social ownership and the cultivation of theland, the social ownership of the mines, railways, ships andfactories, and all the other means of production ".

30. The Secretary of the Department of Informationexpressed himself as being unable to view the script assomething of a party political character, and to meetthe Commission's objection he suggested an introduc-tory announcement to the effect that the broadcastwould be expressing the author's point of view and thatthe talk had been arranged by the Department ofInformation.

31. The Commission, however, felt that the an-nouncement would not overcome the difficulty andthat it would be necessary to get a panel of speakersto put counter points of view. To illustrate the reasonfor its attitude, the Commission visualized an imagi-nary situation in which a spokesman of some otherorganization might broadcast some such statement as—

" We regret to hear of this talk on post-warreconstruction. It will be a sorry business ifwe get any more socialization. It is bad enoughnow, but after the war there ought to be completefreedom."

The Commission considers that it would be justifiedin refusing to accept such a statement, even with apreliminary announcement to the effect that it wasthe view of the author of the broadcast.

32. Discussions ensued between the Commission andthe Secretary of the Department of Information onthe question of altering the script. The Commissionadopted the attitude that it regarded these talks, notas union talks to unionists, but as Government talksto the people as a whole on their responsibilitiesduring wartime. The Commission felt it could nottake upon itself the obligation of indicating whatthe speaker might say; only when the script was re-written by the author could the Oornmissioii attemptto say whether it would be acceptable or not. Thetalk was abandoned.

33. Eventually, in connexion with this series of talksby trade union officials, the Commission suggested thatthe session be dropped for a while, as the talks hadbeen .proceeding for twenty months, which was longerthan would normally be authorized for any sessionwithout change, lest it lost its audience. This sug-gestion was not acceptable to the (Secretary of theDepartment of Information, who replied that althoughthe talks were sometimes beloiw standard, steps hadbeen taken to effect improvements, that the session wasmost important to the war effort, and that it should

he regarded as corning under National Security Regu-lation 6, which requires the Commission to arrangebroadcasts when so requested by the Department ofInformation. He suggested that the talks be con-tinued for another three months, and the Commissionaccepted that as an instruction to continue them.

34. In his book, How Britain is Governed, RamsayMuir points' out that " a new and immeasurablepower to influence opinion has come into being withthe invention of broadcasting. Every day and everynight, in a million homes and more, people are listen-ing at their own firesides to facts and opinions whichmust profoundly modify their thinking. . . . I tis an extraordinarily powerful means of mouldingand directing public opinion, and the more subtlyit is employed the more powerful it becomes."

35. As the A.B.O. is an independent body, with anobligation to maintain an impartial attitude to politics,we suggest that where there -is a difference of opinionbetween the Commission and the Department of Infor-mation as to a proposed broadcast having politicalparty significance, the matter should be referred tothe Standing Committee on Broadcasting.

36. Our discussions on this question have alsoelicited the possibility that while a Minister mightnot succeed in getting broadcasting facilities for aparty political statement, he might circumvent thatdifficulty by making a statement to the Press, relyingon this statement being included in the Commission'snews broadcasts. In that case he would get as effectiveradio publicity for his. views as if he were granteda direct broadcast. In fact, it is likely that on mostoccasions he would get a wider audience for a state-ment in a news broadcast, particularly if the Presshappens to be partial to the Minister's, viewpoint,in which event it would be inclined to feature itmore conspicuously as "headline" news than would

. otherwise be the ease.37. The same opportunity is open to a Minister

who issues a statement to the Commission's newsrepresentatives:. This also could be included in thenews bulletins, although the Commission might (unlessotherwise directed by the Department of Information)refuse a Minister's request to give a broadcast inwhich the same statement appeared, or, alternatively,permit the broadcast and arrange for another broadcastby some representative person holding different views.

38. To meet this anomaly, the Commission at firstsuggested that it had the choice of two alternatives:—

(a) To exclude from its news bulletins partypolitical statements appearing in the Press.This would be a drastic remedy, becausethe publication of an important statementby a public man brings the question intothe arena of public interest and so warrantsits broadcast as news.

(}>) If members or other representative iputlicmen released to the Press a counter pointof view, the broadcasting of the publicstatement would tend to restore the balance.To guard against the possibility that thePress might refuse to publish such acounter statement in full, or even at all,it could simultaneously be released to thelocal representative of the Commission.

39. On further consideration, the Commission ex-pressed .preference for an attitude of dealing witheach case on its merits.

40. We recommend that when the radio news sessionincludes a Parliamentary party political statement,the 'Commission should take the initiative of procuringan expression of the opposing viewpoint from theappropriate Parliamentary spokesman, with the objectof including it in a news .session as soon as possibleafter the first statement received radio publicity.

A ATIONAL PROGRAMME ADMINISTRATIONCOSTS.

41. During 1941-42 the A.B.O.'s revenue, in roundfigures, decreased by £29,330 to £700,840, and theexpenditure decreased by £4,200 to £700,760. _ Themain reductions of expenditure were £8,730 in " otherexpenses", £3,620 in rental of telephone lines, and£1,530 in broadcasting right;. Artists' fees and pro-gramme expenses increased by £4,580 to £484,170,and expenditure for staff salaries and allowances roseby £3,820 to £70,040. There was an increase of £1,835in copyright fees. The result of the year's operationswas a deficit of £120 as against a surplus of £25,000for the previous year. This was due mainly to thereduction in the Commission's share of the listener'slicence fee from 12s. to 10s. During 1942-43, asrecommended by the Gibson Committee, the Commis-sion will have received an additional Is. per licence,representing an estimated increase of £82,000 inrevenue, compared with its receipts for 1941-42.

42. Among the recommendations of the Gibson Oom-mittee was one that an inquiry be held by an appro-priate authority to report on the costs of personneland administration of the A.B.C In making thisrecommendation, the Committee explained that it castno reflection on the Commission, but certain com-plaint;: had been received, particularly in regard tocentralization of activities, and it was felt that thesuggested inquiry would be advantageous to all con-cerned.

43. At a preliminary discussion with the Chairmanof the Commission we acceded to his request thatthe newly-appointed Commission be given time toexamine the situation. At a later conference withus, the view was expressed on behalf of the Com-mission that an investigation was not necessary; thatthe Commission had released a large number of itsexperienced officials for service in connexion with thewar; that some senior officers had considerable recrea-tion leave due to them which it was not practicableto grant in the absence of relieving staff; and thatthe consultations and other work which would in-evitably be associated with the suggested investigationwould impose a severe strain on responsible officialswho were already carrying on under great disabilities,not only because of the loss of the services: of theofficers who had been released to meet war require-ments, but also on account of the scattered and in-adequate accommodation in the various buildings inwhich the Commission had been obliged to conductits activities pending the erection of modern studiosand administrative offices.

44. Subsequently, we inspected the offices in whichthe main staff of the Commission is housed, and fromwhat we saw, as well as from information supplied inregard to the conditions in the other premises rentedfor the remaining sections of the staff, we are satis-fied that the national service is being operated at aconsiderable disadvantage in comparison with otherorganizations, and that the handicaps to which theCommission is subjected by inadequate, unsatisfactoryand scattered .premises should be removed as early aspossible in the post-war period.

45. The main criticism of the Commission's organi-zation relates to excessive centralization of its pro-grammes, on which we received further complaints fromNewcastle. One of the witnesses whose evidence gaverise to the Gibson Committee's recommendation is aformer State manager, who questioned the necessityfor certain extensions of staff and alleged that theorganization was such that there had been friction dueto methods of procedure under which minor executivescould issue instructions to officials of higher status.

±6. In the course of our discussions, the reliabilityof that manager's evidence was challenged by the Com-mission, whose spokesman, nevertheless, admitted thatthe Commission had refrained from defining the powersof its executives. The policy has been, m the wordsof the Commission's representative—" to give thevarious executive officers an opportunity to shake downand adjust matters between themselves", although " afurther step towards the definition of powers Lasrecently been taken".

47. In the early stages of the Commission's activi-ties from 1932 onwards, it was natural that theorganization would be tentative, but after its ten years'experience we consider, in the interests of harmoniousrelationships between managerial and functional execu-tives, that all the steps necessary to permit of theirpowers being comprehensively defined should now betaken. In recommending the adoption of this course,we suggest that before the delegated .powers are finallydecided upon, the Commission should take the oppor-tunity of reconsidering the desirability of modifyingits centralization policy.

48. When the powers of the executives have beendefined, we propose to discuss their significance withthe Commission before reaching a conclusion on thequestion whether it is desirable and expedient underexisting conditions to proceed with the investigationsuggested by the Gibson Committee.

THE OHARLTON CASE.49. During our investigation of the general ques-

tions of .power and frequency allocations, the experienceof the Charlton Station (3OV) was brought forwardas an. illustration of the grounds on which there hadbeen dissatisfaction with the policy pursued by thePost Office. There was an appeal for our interventionand with the Minister's consent we have examined theposition in consultation with the parties concerned.

50. The station is owned by the proprietor of theBendigo Advertiser newspaper. Its radio channel isshared by another commercial station at Murwillumbah(New South Wales). The licensee desires—

(a) an alteration of the radio channel to preventinterference from Murwillumbah;

(b) permission to transfer the station fromCharlton to Maryborough; and

(c) an increase in power from 500 to 2,000 watts.

RADIO CHANNEL.

51. Our discussions with Post Office officials showthat a way can be found to provide a clear channeltemporarily for the Charlton station for a number ofyears, but they are not eager to adopt it, mainlybecause they feel that in the years to come there willbe agitation for permanent retention of the channel.

52. The proposal is that the Murwillumbah stationbe allowed to temporarily use one of the channelsreserved for the national service, provided that stationcan obtain the necessary equipment. This would enableCharlton to operate on its present channel exclusively.It would not be possible to allocate the nationalchannel to Charlton, instead of Murwillumbah, becausethere is not sufficient separation from a neighbouringstation, whose operations would result in what is called"' side channel " interference.

53. The idea of allowing a commercial station touse a channel reserved for the national service wouldnot be an innovation. Three commercial stations arealready occupying such channels, and in two othercases channels are being shared by national and com-mercial stations.

54. Although the Post Office officials are not en-thusiastic about the proposal, they concede that when

the time would arrive for requiring the station tosurrender the channel, it might be possible to arrangemore favorable channel-sharing conditions for Charltonthan are experienced at present.

55. This possibility arises from two factors. First,by the time all the national stations are cor ; ieted itwill be practicable to make use of ten ; titionalchannels allotted, for broadcasting at an internationalconference held m 1938. i t lias not so far t'-.iii pos-sible to u.;<: ihese in Australia because, genera .•'y speak-ing, present listeners' sets have not been constructed forthe reception of programmes via those channels. I t isestimated that m normal tunes it woukl take severalyears to replace the receivers, and the present war-timerestrictions on the manufacture of new receivers willfurther delay the use of the channels.

56. The second factor is the effect of the probableintroduction of broadcasting in what are called theultra high frequency bands, after the war. This willpermit of the adoption of the process known as fre-quency modulation and will release a number ofvaluable channels at present occupied by city stations,some of* which will be quite suitable for rural services.

57. The question of arranging for the Charltonstation to have the temporary use of a clear channeldepends upon the decision reached on the request forpermission to change the location of the station.

TRANSFER TO MARYBOEOUGH.

58. The Charlton station has not paid any dividends.In recent years it has sustained considerable losses, andthe licensee's desire for the transfer to Maryborough isactuated by the belief that the station will be able topay its way there. Tins belief is not shared by thePost Office officials, who are of the opinion that en-croachment on the revenue of two neighbouring stationsat Bendigo and Ballarat will result in the operations ofthe three stations becoming unprofitable. They alsoconsider that a stat.1011 at Maryborough is not neces-ssry, as the area is served by other stations.

59. Listeners at Maryborough receive service mainlyfrom the Melbourne national stations and from, threecommercial stations, namely:—

Ballarat, 37 miles distant, the Courier newspaperstation, owned bv Ballarat Broadcasters Pty.Ltd.

Bendigo, also 87 miles distant, owned by Amalga-mated Wireless (A/asia.) Ltd,

Lubeek, 67 miles distant, owned by the Heraldnewspaper, Melbourne.

60. We are of the opinion that if the Charlton projectwere a new venture making an initial effort to establishitself in the broadcasting business in an area, servedby stations whose stability would be jeopardized by itsintrusion, there would not normally be any reasonablegrounds to dissent from a decision to withhold sanctionof the encroachment. We feel confident that, if thesituation were reversed, the Charlton licensee wouldbe the first to protest against a newcomer being allowedto enter a sphere in which there were limitations andin which he would have a prior claim by reason of hisenterprise in being first in the field.

61. But as 3CV has been in the broadcasting businessfor a number of years we consider that there shouldbe sympathetic consideration of any reasonable proposi-tion designed to enable it to operate without loss,provided that the facilities it seeks can be grantedwithout injustice to others. With this principle inmind, we have studied the evidence and opinions forand against the desired transfer.

62. Station 30V originally commenced operations atBirchip in 1935. Three years later it was transferredto Charlton. One of the considerations whichinfluenced the Post Office to agree to that transfer was

the prospect tiiat the station would derive addition;revenue at Oharlton. .But the expectations have n<bi-en realized. With a town population of 1,601Oiiariton advertisers only contribute an insignificaisum to the station's income at the present time.

63. Listeners to the Oharlton station are also serveby tue Lubeek station which has a power of 2,00watts, four times that of Charlton. Lubeek is adve:tised as the most powerful commercial station in Viitoria, and tins factor, combined with the programiradvantages associated with membership of the MajcNetwork, which the Oiiariton station does not shar<enables the Lubeek station to influence advertisers iits favour to a degree which the Oharlton station :not in a position to emulate. This exploitation <power for advertising purposes was referred to in or..first Report to Parliament.

64. Maryborough, with a town population of 7,50iis prepared to make a free grant of land available fc3CV. The local business houses have guaranteeoperating costs, and the civic authorities are willinto provide facilities to assist in ensuring the succe;of the station. After canvassing only one-third of tl:potential advertising public, 80V has secured a largnumber of contracts for local revenue, subject to ttcondition that the transfer to Maryborough will Iallowed to proceed. These contracts involve a sui220 times greater than the amount subscribed bCharlton advertisers. In addition, the station li£assured us that it would continue to receive the reventfrom the national advertising which it has secured froiagencies independent of the network controllers. Tinrevenue also amounts to a substantial sum.

65. Although the civic and other authorities, as weas the business people of Maryborough, in a petitioforwarded to us, have enthusiastically welcomed tl:proposal to transfer the station to that town and h&\promised financial support, the Ballarat and Bendigstations are opposed to the move. They both fesinroads on their revenue.

66. We have examined the latest balance-sheets anprofit and loss accounts of the Ballarat and Bendigstations, and in our opinion neither station lias airthing to fear from the desired operations of 30V tMaryborough. The contingent contracts which 30"has arranged in that town comprise revenue which hinot hitherto been secured by the other stations, neithtof which receives any advertising revenue from Mar;borough worth mentioning.

67. Whilst there is something to be said for tlopinion that from the point of view of Maryborouglisteners there is no pressing necessity for the establislnient of a station at Maryborough, it should not 1overlooked that 30V has been enterprising enough 1discover sources of revenue which it can exploit withoiinjustice to the other stations concerned. Such beirthe case, we think it inequitable that a station shou]be obliged to continue carrying on at a substantial lo,in a location where local advertisers are not prepareto support it.

68. So far as national advertising is concerned,could not be said that the transfer of the Oliarltcstation to Maryborough would result in diminution <the Ballarat and Bendigo stations' earnings, becati;30V already receives its own national advertisiirevenue in its Oharlton location and would continue 'receive it at Maryborough. Moreover, the Ballanstation is a member of the Macquarie Network, whicspecializes in that field of advertising and would n<allow 30V to share in its sources of revenue becau,of the duplication of coverage. The Bendigo statio:although not a member of either the Major or tlMacquarie Network, shares in the Networks' income -some extent, but its main source of national advertisir

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POWSE. grammes of a higher standard than those which12. We accept the Post Office view that it is not individual stations are in a position to arrange with

technically practicable to allow 3CV's power to be ^ e resources at their disposal.increased to 2,000 watts. Even if the increase were 81. The operations of networks in the United Statespracticable, it would be unfair to permit it because of America were adversely criticized in a report sub-tlie Ballarat arid Bendigo stations both operate on the mitted in 1940 by a committee of the Federal Oom-Sttine .power as 30V (500 watts). munieations Commission after two years' investigation.

That committee reached the conclusion that the two. . . major networks '•'directed by a few men, hold a

AUSTRALIAN MOtilO OOMPObiiRb. powerful influence over the'public domain of the78. In our Firit Report, reference was made to air and ^measurably control radio communication to

thf fact that an Australian composer, in Australia, fll« people. . . . if freedom of communication ishis n^t much chance of getting his work on the on« of the precious possessions of the American people,market iri!e« ir -k broadcast many times to enable such a condition is not thought by the committee tothe public to appraise its worth. o e ™ the public interest and -presents inherent danger

to the welfare of a country where democratic processes_ : 7 f ^ i-&l»;eientative ot t n e ^ t r a i a s i a n 1 enorming p r e y a i l „ ^ ^ ^ ^ CGmmittee ^commended re-Kigut Association subsequently mtormed us, m etiect, vkion Q£ rfie s y g t e m {w ^ Qf e l i m i n a t i n ethat there is uttle prospect oi popu.ariziug an Aus- a} )uge3 w h i l e r e t a i n i ] l s t h e at!vantages of chain servicedtralian compasition unless it 13 included in what are - - _ °called " Hit Parades " or similar sessions. b2- Ihe Gibson Committee, with the American ex-

. ' __ , .. , , . , . - , - , , perienee in mind, expressed its views as follows.:—7o. We made a cliecii ot times which were mciuaeu -

i" ~i?ch se«=ions in the commercial service during the ." We, f^1 tliat, whilst there is nothing inherently wrons'7i £ T "' -i (>'•-• r - ^ f n , n J thn+ +]>e n l ™ K o p w l t " taii nei-work system, i ts fu ture development mis>lit well

montti ot January, 19-io, ana found tha. i-he numbei ,,e w a t e h a d c a r e { u ] ^ b y t l l e p r o p O s e d Parliamentary Standingof Australian compositions was so srnan as to be Committee. The main danger to be avoided in such aneo-ligible in proportion to those of overseas composers. system is monopoly control, either by business or press

„ ' ,. ., , i • i -, • interests., as this would inevitably give great advantages='6. A significant feature^ ot the selected items is t o , l l e sti-ongest networks over competitors whose stations

that they are not necessarily chosen on a basis ot are not as strong financially because oi location and otherapproved popularity. For instance, an. important city reasons. The evils of the American system must not be

11 . f • K - " T , » '.-i • f ;. i n t roduced h e r e . "station which broadcasts one ot tnese sessions touitimes a week does not base its selections on actual 83. There are two of these organizations in Aus-sales of gramophone discs or sheet music. I t constitutes tralia with interstate affiliations. They are known asitself the sole judge of what is a " hit " tune. The the Major Network and the Macquarie Network. Thestudio manager says, " If any member of our pro- former has 15 members and the latter 21, making agramme staff thinks that a number has hit potential!- total of 36 out of 99 commercial stations. Pro-ties, it is included in this session". grammes are either relayed direct from the originating

10

station or they are recorded and subsequently broadcastindependently, according to the availability of land-lines. There are certain differences in the policiesof the two organizations.

84. The Major Network has no agreements or con-ditions of membership. I t has no supreme head.There are two head offices, one in Sydney (associatedwith station BOH) and the other in Melbourne (asso-ciated with station 3DB). Decisions affecting theNetwork's operations as a whole are made after con-sultation between these two stations. The networkis described as " a loose affiliation of friendly stationsfrom which any member may retire at any time".It does not favour the admission of stations outsidecapital cities to membership. Meetings are held everysix months to discuss the Network's future operations.Discounts up to 10 per cent, are given to advertisersas an inducement to patronize it. The Network, assuch, has no revenue. Each member station submitsits own account on the basis of its rate card, irrespec-tive of the audience it claims. Costs of operatingthe Network offices in Sydney and Melbourne are borneby member stations in proportion to the businessreceived from the two centres. Costs of programmesconstructed by, or purchased by, the Network are borneby members in proportion to their revenues. A re-sponsible spokesman has said that if legislation werepassed to check the network system, much the sameresult would probably be achieved by the use of records.He considers that the financial status of countrystations which may be in difficulties in consequenceof war-time restrictions on advertising would not beimproved by admitting them to membership. Hesuggests that city stations, with powerful financialbacking at their call, should be encouraged to take oversuch country station?. He recognizes that this wouldnecessitate a relaxation of the limits of ownershipor control which at present have to be maintained.

85. The Macquarie Network (unlike the Major Wet-work) has a supreme head, Macquarie BroadcastingServices Pty. Ltd., Sydney, under a general manager.Meetings are held annually to determine policy.Membership of the network is not restricted to stationsin capital cities, but stations are not admitted if theirterritory is already covered by another station alreadyin the network. Member stations pay into the networka 10 per cent, commission on all sales. They alsomake a contribution to network publicity and pro-grammes, based on a formula according to time sold.They receive payment at rates fixed by each station,having regard to the audience it claims and the timeoccupied by the network programmes. Their contractswith the network may be cancelled at three months'notice. We endeavoured to ascertain whether countrystations have found it financially advantageous tobelong to it. The replies to our inquiries were gener-ally in the affirmative, although one or two wereevasive. No station replied in the negative.

86. There has been conflicting evidence as to net-work activities in indirectly fostering industry in largerStates at the expense of smaller States. In WesternAustralia, for instance, it is alleged in some quarters,and denied in others, that small manufacturers are ata disadvantage in that their more powerful easternState competitors are able to include Western Aus-tralian network stations in their advertising campaignsat virtually no cost, by reason of the discounts theyreceive in buying time on a network. I t is said thatthis disadvantage is not so apparent at the presenttime, due to war conditions, but that it will againbecome very real when the smaller State manufac-turers wish to resume competition in the civilianmarket after the war. I t is claimed that opinion totile contrary is influenced by interests associated with

network activities. A witness has suggested that thereshould be a flat advertising rate throughout the Com-monwealth and that there should not be any conces-sion to advertisers in the way of discounts or free'"scatters" (an expression used to describe briefadvertising announcements scattered throughoutprogrammes).

87. Under existing conditions, production of Aus-tralian programmes is centered mainly in the largercapital cities. In view of the support which has beenevidenced in various quarters in favour of the decen-tralization of industry in relation to post-war recon-struction, we discussed with responsible executives thenetworks' attitude to the question of encouraging theproduction of programmes in other centres, particularlyin provincial areas.

88. We are informed that the considerations govern-ing the selection of an originating point for a radioprogramme are:—

(a) The availability of actors, singers, musiciansand other entertainers in that particulararea;

(b) The availability of producers, writers, techni-cians, music arrangers, &c.

(e) The location of adequate studios, landlinefacilities or recording equipment;

(d) The location of the advertising agency orhead-quarters of the sponsoring firm, or thelocation of an enterprising radio stationwhich desires to go into production on itsown initiative.

89. These factors have tended to retard decentraliza-tion of programme production. Just prior to the war.the question of originating broadcasts at importantcountry centres was investigated by one of the net-works. An experimental broadcast was actually madefrom a country centre in Victoria, but the war madeit necessary for further development of this policy tobe shelved temporarily. The other network has alsobeen active in the search for talent in the' smallerStates and has met with some success in Adelaide andHobart,

90. Although there is no legislation dealing withnetworks, as such, a safeguard against the principalabuses discovered in America is provided in Section53 of the Australian Broadcasting Act, which prescribescertain limitations of ownership or control of stations.

91. There are potential developments, however,which we consider it would be wise to supervise in thegeneral public interest. For example, at the presenttime the networks do not possess a monopoly ofnational advertising. Stations can, and do, secure suchadvertising through agencies independent of the net-works. But, seeing that discounts are offered as aninducement to patronize network programmes, it isconceivable that the granting of this and possibly otherconcessions might gradually extend to execution ofcontracts between networks and national advertiserswhereby the latter would place all their business withthe networks. Such a development would probably bedisadvantageous to at least some country stations andtheir listeners, particularly stations excluded from net-work membership. Confronted with total loss or sub-stantial reduction of national advertising revenue, theymight be obliged to close down or submit to an invita-tion to come, as has been said in a responsiblequarter, '•'under the wing" of influential city stations,owned by press interests, willing to accept control ofthem within the limits of Section 53, or even beyondthose limits if amending legislation to that end wereintroduced.

II

92. We recommend that—(a) Networks should be required to function

under written agreements with stations,advertisers, programme producers, andothers associated with their activities.

(b) There should be Ministerial approval of thegeneral terms of such agreements, whichshould cover a period not exceeding twoyears and should be contingent on thestations concerned securing renewal, of theirlicences year by year, as provided for insection 46 of the Broadcasting Act.

(c) if the general terms of the agreements con-template a policy of granting discounts orother concessions, the Minister might callupon the network organization concernedto show cause why this policy should beallowed.

(d) The networks should also be required to keepproper accounts and supply annual state-ments to the Minister.

93. In regard to recommendation (b) in the pre-ceding paragraph, we do not suggest that networksshould be required to obtain approval of contractswith individual advertisers, &c, unless they involvedeparture from the principles set out in the approvedgeneral terms.

94. To facilitate a watch on future developments itwould be useful to know the total expenses incurredand revenue received by commercial stations fornational advertising (a) m respect of the Major andMacquarie Network programmes and (b) in con-nexion with contracts through independent agencies.This could be provided for by including these itemsin the form of profit and loss account which is atpresent prescribed in the regulations (Statutory RulesNo. 297 of 1942) and which the stations are requiredto supply in completed detail annually to the Ministerunder Section 67 of the Broadcasting Act. We recom-mend that provision be made for this information to be.included in future, commencing with the year 1943-44;and that the aggregate amounts in relation to the com-bined totals of* other items of revenue and expenditurein respect of all commercial stations, be mentioned inthe Postmaster-General's annual report to Parliament.

95. Another potential development which needssupervising, in view of American experience, is thepossibility of chain broadcasting occupying an un-reasonable amount of stations' time, to the exclusionof sessions of particular interest to local listeners. Wesuggest that appropriate statistical returns should beperiodically supplied to the Postmaster-General toenable a check to be kept on any such tendency, as wellas on any move in the direction of perpetually mono-polizing the most valuable periods of the evening fornetwork broadcasts, especially if it should be foundthat the programmes are not maintained at the standardwhich would be expected of organizations with sub-stantial resources. A siiinmary of these statistics mightalso be published in the Postmaster-General's annualreport, together with relevant commentary, particularlyas to whether the Minister found it necessary to directvariations in programmes with a view to making themsatisfactory to him, under the power conferred bysection 60(2), in the exercise of which he has theassistance of the State Advisory Committees appointedunder section 87.

MULTIPLE 0WN96. No person or company may own or control, either

directly or indirectly, more than—(a-) one metropolitan station in any State;(b) four metropolitan stations in Australia;(c) four stations in any one State; or(d) eight stations in Australia,

These limitations, which were previously in the formof regulations issued in 1935, were incorporated in theBroadcasting Act on the recommendation of the GibsonCommittee, which also suggested that the StandingCommittee should consider whether the law should bealtered to provide for the issue of a fewer number oflicences to the same person or body.

97. Since that suggestion was made war-timerestrictions have been imposed on the manufacture ofequipment to such an extent that it would now be quiteimpracticable for a prospective licensee to secure newapparatus to operate a station. For this reason, andalso because existing licensees could not be compelledto sell their assets to new licensees, we feel that con-sideration of the Gibson Committee's suggestion shouldbe deferred until it becomes possible to relax presentrestrictions on production of equipment for domesticbroadcasting.

98. During discussions on networks there was evi-dence that capital city press interests would be pre-pared to extend their activities to additional countrystations if the limitations as to ownership or controlin section 53 were modified.

99. In our opinion such a move should be dis-couraged, particularly in view of what happened inAmerica. For the preservation of democratic prin-ciples, it is essential that there should be restraint onefforts to obtain an undue measure of control of the air;otherwise those who succeeded in securing it would havean undemocratic advantage in aligning public opinionin directions they favour. This advantage could beused in many subtle ways not discernible to listeners.In radio commentary, for example, public opinionmight be influenced merely by the exclusion of, orignoring of, news and views unfavorable to the interestsof the controllers. Speaking of the dangers of controlby a majority or a minority interest, even for a limitedperiod, a highly experienced and competent Australianauthority has expressed the opinion that " it is possiblefor a short period of radio misuse by a single authoritycompletely to stultify the normal democratic processesof popular judgment ". We consider that it would beunwise to hold out any hope of an extension of multipleownership being sanctioned.

100. Incidentally, it would appear that some of thedifficulties which stations had been experiencing as theresult of war-time restrictions on advertising have beenovercome, partially at any rate, by the receipt of addi-tional revenue from Government advertising. TheFederation of Commercial Stations complained thatGovernment Departments paid the press for advertisingmatter which, the broadcasting stations were expectedto accept free of charge; and it was decided to increasethe amount of " paid-for " radio advertising time. Thestations received from this source £21,000 in 1941,£30.000 in 1942, and £13,000 from January to March,1943.

STUDIOS AND ADMINISTRATIVE OFFICESFOR THE NATIONAL PROGRAMME SERVICE.

101. In connexion with our terms of reference con-cerning the provision of studios and administrativeoffices for the national service, we suggested to the Com-mission, in September, 1942, that it should considerthe advisability of initiating certain action (includingthe selection of a site for its head-quarters at Canberra)with the object of being in a position to commenceits building programme immediately after the war.

102. In making that suggestion we were influencedby three considerations—first, the desirability ofarranging for the Commission's head office to be estab-lished in the Australian Capital Territory with theleast possible delay after the cessation of hostilities;second, the contribution to post-war reconstruction.

12

which the Commission could justifiably make in re-habilitation of ex-service personnel in the buildingindustry in every capital city as well as in Canberra;and third, the probability that, with so many otherworks claiming the attention of architects and admin-istrators in the early stages of transition from war topeace, there will be prolonged delay in the executionof projects which have not been advanced beforehandto the stage of completion of essential working draw-ings and specifications in readiness for immediate com-mencement of construction.

103. The Commission considered it advisable todefer attention to the building plans, but accepted thesuggestion that steps should be taken to secure a sitefor its Canberra building. Its negotiations with theDepartment of the Interior to that end are stillproceeding.

104. The fact that such a comparatively long timeis entailed in reaching finality in regard to the Can-berra site confirms our belief that there is likely to besubstantial delay in commencing construction of thebuildings in the various capital cities unless detailedplans are ready for immediate implementation at theend of the war.

105. The Commission's reluctance to proceed furtherwith the preparation of building plans is founded onthe possibility that improvements of studio design mayhave been evolved during the war, and that it wouldbe better to suspend designing until it is known whetherany such improvements will eventuate.

106. If the services of architects and draftsmen canbe made available without detriment to the war effort,even intermittently, an alternative attitude would be toproceed with the planning in accordance with thetechnique already evolved, leaving for "last minute"alteration, if necessary, the sections of the building tobe allocated for studio purposes.

107. .Support for this alternative may be found inthe claim that the studio design adopted, and thetechnical equipment installed, in the recently completed

building for the Macquarie Broadcasting Network inSydney, is equal to the world's best; and that the wholeof the interior, studios and offices incorporate the latestexperience of overseas practice. It is said to embodythe closest approach to acoustic perfection within therange of technical knowledge.

108. We suggest that the Commission give considera-tion to the question of adopting the alternative, at leastas regards its Canberra and Sydney projects; also that,in consultation with the Department of the Interior, itshould reach finality in advance of the termination ofthe war, as to the provision of sites and the erectionof residences for the members of the Commission'sstaff who are to be located at Canberra, so that comple-tion of their construction may synchronize with theerection of the official building in the Federal Capital.

109. Fifteen months have passed since the GibsonCommittee recommended that the central administra-tion of the Commission should be located at Canberraas soon as practicable. That recommendation wasincorporated in section 7 of the Broadcasting Act,which came into operation twelve months ago. Westrongly urge that all the authorities concerned shouldtake the necessary preliminary steps to ensure that therecommendation is carried out with the least possibledelay after the cessation of hostilities.

ARTHUR A. CALWELL, Chairman.

O. W. O. MARR, Vice-Chairman.

S. K. AMOUR.

WALTER J. COOPER.

HERBERT HAYS.

H. O. BARNARD.

VICTOR JOHNSON,

A. GRENFELL PRICE.

28th June, 1943.

Printed and Published far the GOVEBNMKKT of the COMMONTOAHH of ATJSTBAIIA byL. F. JOHHSTON, Commonwealth Government Printer, Canberra.