The Radio Authority has blocked a local newspaper group from taking over a regional radio station in Telford, in a move that could that could deter major publishers from expanding into the sector.
The watchdog ruled that the Midland News Association, which owns several local newspapers in the area, should not be allowed to buy Telford 107.4 FM on the grounds that the acquisition could act against the public interest.
It had been widely expected that newspaper groups such as Daily Mail & General Trust and Northcliffe Newspapers would attempt to expand into local radio once the Communications Act, which comes into force next summer, abolishes the existing cross-media ownership regulations (see Parliament Finally Green Lights Communications Act).
However, today’s ruling indicates that the last minute plurality test amendment to the Bill could prove an obstacle to publishers looking to diversify into radio, because it means that all major media acquisitions will face tough investigation under the new super-regulator, Ofcom (see Ofcom Chairman Welcomes Puttnam’s Plurality Test).
The Radio Authority made its decision in-line with the provisions of the forthcoming Communications Act and said it had received a number of responses to its public interest test raising concerns over the proposed acquisition.
In stated: “Taking account of the market shares obtained by both Midland News Association and Telford FM and the coherent and credible objections raised by respondents to the consultation, we have determined that the arrangement could be expected to operate against the public interest.”
The watchdog accepted that under the provisions of the Communications Act 2003 the proposed acquisition would not be subject to ownership restrictions, or face an obligatory public interest test. However, it insisted the deal would face the scrutiny of Lord Puttnam’s plurality test, which is designed to limit the dominance of large media owners following the relaxation of the ownership regulations.
The authority said it had sought to interpret duties in a way that was consistent with the new Communications Act, but did not feel able to predict whether or not the deal would be allowed to go ahead in the newly de-regulated media marketplace.
Earlier this year the widely anticipated consolidation of the commercial radio industry suffered a set-back, with confirmation that the Competition Commission had blocked GWR’s bid to buy Chrysalis Radio’s Galaxy 101 and merge it with Vibe FM (see Watchdog Blocks GWR-Backed Acquisition Of Galaxy 101).
