Cross Media Ownership Green Paper

The National Heritage Secretary has today announced new rules to regulate media ownership into the next century.

No company will be allowed to own more than 10% of the total UK media market and 20% of the regional markets in Scotland, Wales, Northern Ireland and the regions of England. All but the largest national newspaper groups (News International and Mirror Group) will be allowed to own up to 2 TV companies.

The Green Paper says that “if UK media companies are to flourish and to provide British audiences with an increasing range of high quality services, it is also important that media ownership regulation reflects the dynamics of the media market”. Dorrell’s plans for reform come in two different stages. There are longer term proposals which will require full public consultation and a package of interim measures to be introduced immediately through secondary legislation.

Long Term Proposals;

• Abolishing the existing structure of detailed rule.
• Measuring media markets by revenue or audience share, and weighting sectoral markets according to their relative influence.
• Setting ownership thresholds at: 10% of the total UK media market, 20% of regional media markets, 20% in each sectoral market (i.e. TV, Radio)
• Requiring existing or new concentrations above these levels to be subject to approval by an independent media regulator who would be charged with determining whether they were in the public interest
• Leaving the regulation of concentrations below the thresholds to competition law alone.

More immediate legislation will liberalise media ownership regulation while safeguarding the public interest in plurality of media ownership, according to Mr Dorrell. This will allow cross control between national newspaper companies with less than 20% share of total national newspaper circulation and television companies, up to a limit of 15% of the total television audience, and subject to a limit of 2 terrestrial television licenses. These new rules will also apply reciprocally for TV companies acquiring newspapers on the same basis.

Proposals for cross control between TV and newspaper companies will be required to satisfy two important safeguards: the ITC will have the power to restrict transactions they deem to be contrary to the public interest, against criteria set out in the legislation; No cross control will be allowed between newspaper and TV companies where the newspaper companies’ regional titles account for more than 30% of regional newspaper circulation in the relevant TV region.

The primary legislation would also:

• introduce parallel arrangements for cross control between newspapers below the 20% threshold and radio companies, subject to Radio Authority consent, and local threshold of 30% newspaper circulation
• abolish the restrictions on ownership between terrestrial, satellite and cable television services, subject to the 15% limit on total television audience, but restrict terrestrial television ownership for those satellite and cable television companies in which a national newspaper above the 20% national circulation threshold already has more than a 20% stake;
• lift the 50% limit on the combined Channel 3 holdings in ITN;
• remove the numerical limit on the number of local radio licenses which can be held, subject to a limit of 1 national licence
• clarify the definition of ‘control’, to ease enforcement of media ownership rules.

The secondary legislation would:

• increase the number of radio licenses which may be held from 20-35, prior to the abolition of the limit in the primary legislation;
• relax the limits on holdings of category A and B licenses;
• (after consultation with the ITC and BBC) raise the equity ceiling between independent producers and broadcasters from 15%-25% and liberalise the definition of an independent producer, so that EU independent producers can own non-EU broadcasting companies
• double the circulation threshold for newspaper referrals to the Monopolies and Mergers commission from 25,000 to 50,000.

Commenting on the proposals Mr Dorrell said: “Our proposals ensure that at the national, regional and local level, no organisation will be able to dominate the supply of news, information and entertainment services to the British public.

“These proposals are the first step in the development of a more coherent and comprehensive long term strategy to equip the UK media industry to take full advantage of the opportunities. I have already established a specialised Broadcasting Sponsorship unit within the Department of National Heritage, designed to work closely with the media industry”. He urged the industry and the wider community to contribute to this debate.