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Technology is set to play a major role in the delivery of media content in Australia following the decision by the Federal Government to significantly change media laws.

Communications minister Senator Helen Coonan today released a new plan which allows TV and newspaper owners to merge when cross-media and foreign ownership restrictions are scrapped. Currently foreign media owners are not allowed to own Australian media.

The move could result in Channel Nine being sold to a foreign media owner in the future.

Communications minister Senator Helen Coonan said that the plan would be open for consultation for a month.

Under the media reform two new digital TV channels will be made available next year for what Senator Coonan described as “innovative” programming, provided they do not mirror “traditional television services”. She also said that consumers will be required to convert their televisions to digital by 2010 in Sydney and 2012 in regional areas.

Conversion requires a digital set-top box costing between, $80-$400. There was no indication that the Federal government would subsidise the set top boxes as proposed late last year.

Coonan has said that she would not issue a new fourth commercial licence and would remove restrictions stopping the ABC and SBS using their new digital system to multi-channel.

According to Tom Burton writing in the Sydney Morning Herald, multi-channeling enables the broadcasters to transmit up to five simultaneous channels – at present the ABC and SBS can only broadcast limited types of program on their multi-channel stations – ABC2 and SBS2.

According to Tom Burton writing in the Sydney Morning Herald, under the new ownership rules cities and regions will have to be a minimum number of commercial media groups – five in cities, four in the regional markets – rather than the current restriction which stops newspaper and television companies operating in the same market.

The same restriction will apply to radio. Proposals by foreign interests to directly invest in the media sector, irrespective of size, would be subject to prior approval by the Treasurer. There will be a bar on mergers if the proposed acquisition would leave less than five players across the spectrum of newspaper, radio and TV

There are currently 12 media operators in Sydney and five to seven in regional markets.

The changes could spark a rash of takeovers, although media companies have been declaring they are only interested in buying internet-based media products.

The media ownership changes would take place in 2007, although Senator Coonan left open the prospect they could be implement at the time of full conversion to digital – 2010-2012.

Foad Fadaghi, digital media analyst at researcher Frost & Sullivan told the SMH that  the suggested reforms for digital TV were an acknowledgement that media industry has moved on from its traditional print and television roots.

“I think these changes are quite sensible and in line with the realities of marketplace. It doesn’t make sense not to be more flexible in the rules in such a changing media climate,” he said.

Although digital television has not attracted a very substantial customer base in Australia, he said there has been steady uptake with prices of set top boxes falling, and a lot of televisions now incorporating digital reception built in.

“Its really a matter of time before it becomes takes off, but as with many technologies it often takes longer than most would imagine,” he said.

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