The Government’s draft Communications Bill, announced in Parliament yesterday, proposes scrapping most of the ownership rules within the TV, radio and newspaper markets clearing the way for further consolidation within the UK media sector and opening it to foreign investment.
The Bill plans to remove barriers preventing large newspaper owners such as Rupert Murdoch’s News International, which controls over 20% of the national market, from owing a terrestrial TV channel. A proposal that will clear the way for Murdoch to realise his long-held ambition of owning Channel 5.
However, the Government also plans to allow non-European companies to own UK TV and radio licences for the first time. A move which, according to Trade And Industry Secretary Patricia Hewitt, is intended to boost inward investment and competition within the UK TV and radio markets.”
The media ownership laws that have so far prevented Carlton and Granada from merging into a single ITV company will also be scrapped if the Bill goes ahead. The move will enable Carlton and Granada to continue with merger talks that are thought to have begun following the closure of ITV Digital.
The Government also plans to abolish the rules preventing newspaper owners from controlling radio stations. Under the Bill, the regulations preventing consolidation among local radio licences would be simplified and the ban preventing the ownership of more than one national commercial radio licence removed.
However, Culture Secretary Tessa Jowell said that the Government remains committed to the principle of tough, effective regulation and would keep three “key limits” on cross-media ownership.
Firstly, newspaper groups with more than 20% of the market would not be able to own a significant stake in ITV. A regulation that is based on the fact that most people get their news and information from national newspapers and terrestrial television.
Secondly, a parallel regional rule preventing anyone owning all the newspapers and the regional TV licences in any region or major city will remain.
Thirdly, there would be a scheme to ensure that at least three commercial local or regional media voices exist in addition to the BBC in almost every local community.
The draft Bill, which will be subject to a three month review period, will also replace the existing five regulatory bodies with one single regulator OFCOM. The BBC will come under the control of this super-regulator but will keep its existing board of governors in a move designed to give the BBC a heavier rather than a lighter regulatory burden.
Summarising the Bill, Hewitt said: “The draft Communications bill is about competition where possible and regulation where necessary. It amounts to a massive simplification of the regulatory network.”
DCMS: 020 7211 6200 www.culture.gov.uk DTI: 020 7215 5000
