The Macquarie Radio Network has welcomed the ABA’s announcement that 2GB had complied with its obligations over Telstra’s sponsorship of Alan Jones’ breakfast show. But the ABA has foreshadowed a possible review of the current codes to achieve a more “clear distinction between editorial comment and advertising material”.

The ABA’s investigation, launched in late 2002, has found 2GB complied with its obligations under the Broadcasting Services Act 1992, the Commercial Radio Standards and the Commercial Radio Codes of Practice.

Under an agreement between Macquarie and Telstra (the Telstra Agreement), Telstra sponsors Jones’ program. Jones is not a party to the Telstra Agreement.

The ABA has ruled that Telstra’s sponsorship of the show was made clear to listeners.

New Macquarie Radio Network General Manager, Louise Barrett, says 2GB welcomes the ABA’s findings and the conclusion of its investigation: “Telstra is a key sponsor of Alan Jones’ program and Macquarie values its involvement.

“We are always mindful of the ABA’s requirements and carefully consider all commercial sponsorship proposals. The ABA announcement has cleared us of any wrong doing and we can now move on.”

The full text of the finding is below:

The Australian Broadcasting Authority has completed its investigation into the Alan Jones Program broadcast on commercial radio service 2GB Sydney. The investigation concerned the sponsorship of the program under an agreement between Telstra Corporation and the parent company of the licensee, Macquarie Radio Network Pty Ltd.

The ABA found no breach of the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 – a rule specifically designed to make visible possible commercial influences on current affairs presenters. In this case there were no hidden sponsorship arrangements – the agreement was between Telstra and MRN, and Mr Jones was not required to make on-air disclosures of the sponsorship agreement when he mentioned Telstra. The agreement required live read advertisements by Mr Jones but imposed no editorial restrictions or obligations on him. Live read advertisements reviewed by the ABA were distinguishable from the rest of the program matter and complied with the Broadcasting Services (Commercial Radio Advertising) Standard 2000.

The ABA also reviewed editorial comment concerning Telstra broadcast by Mr Jones during 2002. The ABA found that some of these broadcasts were ‘political matter’ for the purposes of clause 4 of Schedule 2 to the Broadcasting Services Act 1992. However, the ABA was not persuaded that Telstra requested and authorised the broadcasting of that political matter within the meaning of that clause. Therefore, there was no breach of this licence condition.

The ABA looked at whether broadcasts by Mr Jones complied with the Commercial Radio Codes of Practice relating to the presentation of current affairs. On the available evidence, the ABA found no breach of the codes, however it considers that the existing regulatory measures aimed at promoting fairness in news and current affairs coverage merit review. In particular, extra safeguards may be required in the codes to cover a situation where a controversial issue of public importance is being dealt with and where a major advertiser or sponsor of the licensee has a particular interest in that issue. The ABA also intends to review the current rules aimed at achieving a clear distinction between editorial comment and advertising material to ensure that they are effective.’

The ABA’s report, Investigation relating to the sponsorship of the Alan Jones Program pursuant to an agreement between Telstra Corporation and Macquarie Radio Network Pty Ltd, is available on the ABA web site.

The investigation into the Alan Jones Program is the third major investigation completed by the ABA following a complaint by the Communications Law Centre in October 2002, concerning Sydney commercial radio services 2GB and 2UE. The ABA report of Investigation into matters relating to the control of the 2GB and 2CH licences and report of Investigation into Radio 2UE Sydney Pty Ltd – Sponsorship of Mr John Laws by Telstra Corporation Ltd and NRMA Insurance Ltd were released in May 2003 and December 2003 resepectively.

Backgrounder

In response to a complaint from the Communication Laws Centre (CLC), the ABA commenced an investigation on 7 November 2002 into a range of matters concerning the Alan Jones Program on Radio 2GB including consideration of an agreement between Telstra Corporation Limited (Telstra) and Macquarie Radio Network (MRN), the parent company of Harbour Radio Pty Ltd, the licensee of commercial radio station 2GB Sydney.

The CLC alleged that resulting from broadcasts on the Alan Jones Program, Harbour Radio had variously breached the Broadcasting Services(Commercial Radio Advertising) Standard 2000 (Advertising Standard) and clause 4, Schedule 2 to the Broadcasting Services Act 1992 (the Act), regulating the broadcast of political matter.

The CLC was also critical of what it saw as the narrow application of the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 (the Disclosure Standard). While Mr Jones was not a party to the Telstra/MRN agreement, he had established an equity sharing arrangement with the licensee, but did not appear to have a disclosure obligation under the standard.

Telstra/MRN agreement and the Disclosure Standard

Mr Jones’ interest in MRN

The nature of Mr Jones’ equity arrangement with the licensee was the subject of a report by the ABA released in May 2003. The agreement between Mr Jones’ company and MRN gives Mr Jones an entitlement to shares in MRN, the owner of 2GB (and 2CH), which will accrue over time. In consequence, Mr Jones is entitled to 20 per cent of the increase in value of MRN that that might occur as a result of his role as breakfast presenter on 2GB.

Telstra/MRN agreement

As identified in the CLC complaint, the agreement between MRN and Telstra is not a commercial agreement for the purposes of the Disclosure Standard, which applies to commercial agreements between presenters and sponsors. The ABA’s review of the agreement confirms that it was a sponsorship and advertising agreement between Telstra and MRN, the parent company of the licensee. The terms of the agreement did not impose editorial restrictions or obligations on Mr Jones.

Application of the Disclosure Standard

In the absence of a ‘commercial agreement’, there was no obligation under the Standard for Mr Jones to make on-air disclosures of the sponsorship agreement when mentioning Telstra or its products or services in commentary on 2GB, or for the licensee to include the Telstra/MRN agreement in its register of commercial agreements and to notify the agreement to the ABA.

Arguably, 2GB was required to comply with clause 8 of the Disclosure Standard (which concerns the disclosure of payment of production costs) but met this requirement by announcing that the Alan Jones Program is ‘brought to you by Telstra’ as required by the agreement between MRN and Telstra. Telstra’s sponsorship of the Alan Jones Program is also prominent on the 2GB website.

Other findings

Compliance with the Advertising Standard

CLC alleged that six Telstra advertisements read live by Mr Jones on 29 August and 8 October 2002 breached the Advertising Standard. The ABA formed the view that the live read advertisements (for five separate products and services) were distinguishable from the rest of the program matter. They contain words and phrases not normally used in general speech or commentary that would be likely to alert a reasonable listener to the fact that the words being spoken were part of an advertisement and not part of the general program material. Listeners are familiar with this type of live read.

Compliance with the political matter provisions of the Act

• A review of the broadcasts complained of by the CLC supports a finding that ‘political matter’ was broadcast for the purposes of clause 4 of Schedule 2 to the Act. However, the ABA was not persuaded that Telstra requested and authorised the broadcasting of that political matter within the meaning of that clause. Therefore, there was no breach of this licence condition.

Commercial Radio Codes of Practice

Sub-clause 2.2 (c) of the Codes requires a licensee to ensure when preparing and presenting a current affairs programs that:

… reasonable efforts are made or reasonable opportunities are given to present significant viewpoints when dealing with controversial issues of public importance, either within the same program or similar programs, while the issue has immediate relevance to the community.

On balance, based on the available evidence, the ABA finds no breach of sub-cl. 2.2 (c) of the Codes in relation to the issues of Telstra’s service standards and ‘watering Australia’ with funds from the sale of Telstra, although it is noted that the viewpoints presented were predominantly in favour of Telstra.

Sub-clause 2.2.d of the codes requires, amongst other things, that ‘ material is not presented in a misleading manner by … ‘withholding relevant available facts.’

The ABA reviewed a broadcast on the Alan Jones Program on 25 October 2002, where Mr Jones reacted strongly to criticism of his editorial independence. Mr Jones emphasised the strict legal position that he was not paid directly by Telstra, and made statements such as not being ‘on the Telstra payroll’ and never ‘having a cent from Telstra in my life’.

Although the ABA believes that it was desirable for listeners to have been advised of Mr Jones’ options in 2GB, the ABA formed the view that, in general, MrJones’ listeners would have had sufficient knowledge of Mr Jones and his equity interest in 2GB to make informed assessments about the claims he made about his relationship with Telstra and his editorial independence.

On balance, the ABA finds the program was not misleading and did not breach Clause 2.2 (d) of the Codes.

The Compliance Standard

The licensee of 2GB provided the ABA a copy of the Macquarie Staff Handbook and detailed the procedures in place to implement each element of the Broadcasting Services (Commercial Radio Compliance Program) Standard 2000. Accordingly the ABA is satisfied that the licensee has observed all requirements of this standard.

Consideration of possible amendments to standards or codes

The ABA does not consider that the issues raised in this investigation indicate that an amendment needs to be made to the Disclosure Standard. The requirement under part 3 of the Standard was specifically designed to provide transparency for listeners by way of on-air disclosure where presenters of current affairs programs have hidden sponsorship arrangements. This is not the situation in this case.

However, the ABA notes that prior to the commercial agreement Alan Jones made a number of on-air statements critical of Telstra, especially with respect to its fees and charges. The dates for these statements are, 17 April, 18 April, 22 April (twice), 23 April (twice), 26 April and 11 July 2002. From 17 July 2002 onwards, however, the material provided to the ABA records Mr Jones making predominantly positive commentary, supporting Telstra’s service standards, public image and credibility. It may be noted that Mr Jones’ views on the privatisation of Telstra also seem to have changed over time.

Arising from the circumstances of this investigation, the ABA considers that the Commercial Radio Codes of Practice, in particular sub-clause 2.2 (c), may need to be amended. The aim would be to provide extra safeguards with respect to accuracy and fairness in current affairs programs in situations where a controversial issue of public importance is being dealt with and where a major advertiser or sponsor of the licensee has a particular interest in that issue. Such an amendment might, for example, require that within that program reasonable efforts are made or reasonable opportunities are given to present significant viewpoints.

Are there any other gaps in regulation?

The purpose of the Disclosure Standard was to augment the Commercial Radio Codes of Practice, specifically by making possible commercial influences on current affairs presenters visible. As discussed above, it was not intended to deal with all aspects of the potential impact of commercial advertising and sponsorship arrangements on current affairs program content. Rather, the disclosure standard is part of a package of regulatory measures relevant to this question with the Codes of Practice, in particular, governing the conduct of licensees by seeking to ensure that standards of fairness and accuracy are promoted.

In addition to a review of sub-clause 2.2(c) of the code, the ABA considers that there may be merit in reviewing the existing regulatory measures aimed at promoting fairness in news and current affairs coverage. The purpose would be to consider existing measures aimed at achieving a clear distinction between editorial comment and advertising material (including live reads), and to assess whether and how commercial arrangements may impact on other program material. The ABA will raise these matters with Commercial Radio Australia and would welcome wider discussion of these issues.