Inquiry to examine whether broadcasters’ operations ‘consistent with the principles of competitive neutrality’ • Sign up to receive the top stories in Australia every day at noon

The public broadcasters will be asked to justify to a government inquiry why they should continue providing free online news and catch-up TV when they are competing with commercial media players.



The government’s competitive neutrality inquiry is examining the expansion of the ABC’s online news service, ABC iview, SBS On Demand and other services, in the light of complaints from Foxtel, News Corp Australia and Fairfax Media about taxpayer-funded media crowding them out.



The communications minister, Mitch Fifield, has appointed economist Robert Kerr, commercial TV lobbyist Julie Flynn and former ABC TV executive and producer Sandra Levy to examine whether ABC and SBS are “operating in a manner consistent with the principles of competitive neutrality”, which require that public entities should not enjoy a competitive advantage.



An issues paper published on Friday revealed that the strong performance of catch-up TV and its impact on the streaming services Foxtel and Stan would be put under the microscope.



“With a substantial back catalogue of popular and niche entertainment and informative content, SBS On Demand competes directly with subscription on-demand services such as Stan, Foxtel and Netflix for content and viewers,” the paper said.



ABC and SBS now have big audiences for their digital products, it said, and ABC news had reached No. 3 in the online news rankings behind news.com.au and nine.com.au.

The paper noted that in 2013 the charters of both the ABC and SBS were amended to explicitly allow both organisations to provide digital media services, because originally the charters specified TV and radio only.

“In this context, commercial media companies have raised concerns about the impact on competition of the activities of the national broadcasters,” the issues paper said. “These concerns have been expressed in a range of forums and centre around the broad principles of competitive neutrality as they apply to the national broadcasters.”

Google tells Australian regulator it is not contributing to 'the death of journalism' Read more

The paper quoted critics including the Fairfax chief executive, Greg Hywood, and the commercial free-to-air TV lobby complaining about competition from the ABC and SBS.

It cited a Free TV submission to the government saying: “Over recent years there has been a marked rise in the extent to which the ABC and SBS directly compete with commercial free-to-air TV to acquire content with commercial appeal. This trend is accelerating as SBS, in particular, has launched or expanded its Viceland and Food Network channels.”

A statement from Hywood to a parliamentary inquiry was also quoted in the paper: “We are not anti-ABC. The ABC is part of the Australian community. It has been for many years and does very good work. They are a partner with many stories. It is just aspects of the new world of media where we have to be careful that the decisions that government institutions make do not impinge upon the diversity and the commercial environment that I think we all value.”

Questions to be asked by the panel include whether the broadcasters take “undue advantage of their government ownership, to the detriment of competitive outcomes” and about the different regulations governing public and commercial broadcasters.

Another question the panel is seeking to answer in its report later this year reads: “Are you aware of any specific instances where the ABC or SBS may have received any other competitive advantage, due to their public ownership, to the detriment of a private competitor?”

An ABC spokeswoman said: “The ABC will continue to cooperate with the inquiry and will provide a submission by the required due date.”