Ofcom Chairman Welcomes Puttnam’s Plurality Test

The eleventh hour amendment, put forward by Lord Puttnam to limit the dominance of large media owners following the relaxation of the ownership regulations (see Puttnam Plan Could End Media Ownership Deadlock), will see Ofcom compile a report on the public interest ramifications of any large cross-media deals.

The new super-regulator will pass on its findings to the Competition Commission and the Department of Trade and Industry, which will be able to block any deal that operates, or may be expected to operate, against the public interest.

Delivering the Guardian Media Group lecture at this year’s annual Radio Festival in Birmingham, Lord Currie said: ”The plurality test is entirely acceptable to Ofcom and we think we can make it work. There is virtue in protecting the diversity of the broadcasting landscape.”

The former professor of economics at the London Business School also emphasised the need for radio groups to view the Communications Bill in the full context of the Competition Act and the Enterprise Act and called for ”strategic thinking” to make mergers and acquisitions successful in the newly deregulated media landscape.

He said: ”Even where Communications Bill legislation permits a particular ownership arrangement, it is by no means certain that this will be sanctioned by the competition authorities. And that decision, ultimately, will not be one which Ofcom is empowered to take.”

Currie emphasised that the Competition CommissionÂ’s recent decision to block GWRÂ’s acquisition of Bristol-based Vibe 101 (see GWR Achieves Objectives In ‘Difficult’ Conditions), would force radio groups to put competition law firmly in their sights when thinking about potential takeovers.

He said: ”The central message to the radio industry is that its key players really need to think these mergers through. They need to get inside each deal and think how they can guard against specific competition concerns.”

However, Currie dismissed accusations that the ruling, which prompted GWR to dispose of its stake in Vibe Radio Services, would stifle the widely anticipated consolidation of the commercial radio sector. He said: ”There are no overly large players in the radio industry and I certainly see scope for convergence over the next few years.”

Currie went on to praise the recent development of the radio industry and the growth of listening via new formats such as digital audio, digital terrestrial and mobile phones. He emphasised that Ofcom would strive to be a regulator for the twenty-first century, saying: ”In all that we do, we intend to be at the forefront of the understanding of new communications technologies.”

He also reminded the BBC that it would, for the first time, face the sort of sanctions, which have applied to commercial broadcasters for decades. He said: ”We fully expect that the BBC will keep its house in order. But be in no doubt: if Ofcom needs to take firm regulatory action, it will have no hesitation in so doing.”

Earlier this month Ofcom chief executive, Stephen Carter, criticised the GovernmentÂ’s plans to amend the Communications Bill to which give the new super-regulator a greater emphasis on protecting the rights of citizens (see Carter Blasts Risky Amendments To Communications Bill).