A better process, but what about the product

The new method of making appointments to the ABC board is certainly more open and transparent.  However this process, in itself, does not guarantee good decisions.

When he appointed her to the ABC board was the Communications Minister aware of Dr Julianne Schultz’s role in an attempt to tie the ABC into a strategic alliance with Telstra – arguably Australia’s largest, most powerful and most aggressive communications organisation?

Dr Schultz is a distinguished academic and is very highly regarded as the founding editor of the Griffith Review. She is also a former senior executive with the ABC.  However in this role her advocacy of the Telstra deal has been criticised by a fellow academic, by unions representing ABC staff and by Friends of the ABC.

As Acting Director of Corporate Relations at the ABC Schultz was a key player in an attempt, lead by then Managing Director Brian Johns, to tie the ABC into a complex and far-reaching commercial deal with Telstra.

Fortunately the proposal was leaked before a contract between Telstra and the ABC could be signed.  The Senate established an inquiry at which Schultz, as the main witness for the ABC, pursued the management position forcefully.
 
In a study of the of evidence presented to the inquiry, published in the academic journal Human Relations, Dr André Spicer argued that the ABC/Telstra deal was an attempt  “to shift the broadcaster’s website from being a technology used to achieve public service goals to being a revenue generator.”

A key part of the deal was for the ABC to provide news for display on Telstra’s website, where it would be surrounded with advertising.  In return the ABC would receive a substantial fee.

But the deal went well beyond simply supplying a news feed.  It also potentially gave Telstra even more influence over the ABC than a commercial advertiser would have over a commercial broadcaster. The proposed agreement allowed Telstra to ‘consult’ with the ABC about future content, co-productions and e-commerce ventures. In effect, Telstra could have input to the ABC editorial process (although the ABC would not have been legally bound to accept Telstra’s suggestions).

The agreement envisaged the ABC promoting Telstra’s Easymail service and that wherever possible the ABC would use Telstra’s broadband service as a back channel. The ABC and Telstra would be obliged to treat each other on a ‘most favoured nation’ basis.

This caused distinguished investigative journalist and former ABC board member Quentin Dempster to describe the ABC/Telstra relationship as a ‘strategic alliance’.  He told the inquiry that this alliance involved the ABC “in a fully commercial business plan with another operator and a delivery system. This arrangement will cause us all sorts of trouble with Optus, with any other player.  I am basing this on my bitter experience being on the board of the ABC as we did a deal with Fairfax and Cox Communications for pay TV.”

In evidence before the inquiry Schultz was unapologetic about the commercial thrust of the Telstra deal.  She told the hearing that it might be necessary to pursue an increasingly commercial approach that “would involve a fundamental change in direction to move into a very commercial space where very large amounts of money are being spent at this stage for very little return but for great speculative gain.”

Fortunately the deal was never signed.  The new ABC Managing Director Jonathan Shier killed it, not because it was too commercial, but because he thought the ABC was selling its content too cheaply.

Julianne Schultz is a very intelligent person.  As she joins the ABC board we must hope that she has learned from her earlier experience of the ABC.

Darce Cassidy April 2009