House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Fourth Report

COMMUNICATIONS

IX MEDIA OWNERSHIP

76. The Government draws an important distinction between "diversity", by which it means the availability of a wide range of media content, and "plurality", by which it means a wide range of sources of content. The former has traditionally been maintained through positive content regulation and the obligations of public service broadcasting in the UK. Plurality has been maintained through rules limiting media and cross-media ownership.

77. The Government accepts that these rules need over-hauling because of changes in the media markets over the last five years and the fact that the piecemeal development of rules in 1990 and 1996 did not look at the communications sector as a whole. The previous Committee was in favour of leaving these matters to the competition authorities on the whole in the light of the huge range of sources of news and views available through the Internet.

78. The Government issued a detailed consultation document on media ownership issues in November 2001 and the results of the consultation in March 2002. The consultation document contained a mixture of proposals and questions. The key proposals were:

revocation of the prohibition on local authorities and advertising agencies owning media companies;

retention of the ban on non-EC and non-European Economic Area ownership of broadcasters;

revocation of rules preventing the single ownership of the two London ITV licences (allowing the merger of Granada and Carlton subject to competition law considerations)

revocation of the limit of 15 per cent of any company's share of the television audience;

retention of the nominated news provider system for ITV but provision for its revocation on the advice of OFCOM;

raising of the limit of share of ownership of the nominated news provider for ITV

ITV

79. The Government is undecided over whether to prevent the common ownership of ITV and Channel 5 or leave the matter to the competition authorities. The Government has decided to raise the ceiling for share of ownership of ITV's nominated news provider but has not settled on a figure.

Radio

80. It seems likely that the pretty absurd, and now archaic, points system for radio ownership will be abolished and that the potential accumulation of radio interests will be left to the competition authorities. The Government had views but no definite proposals regarding: the accumulation of radio or digital radio interests in local areas; on the ownership of more than one national radio licence; or the onward sale of local radio licences.

Cross-media ownership

81. The Government sets out a very comprehensive range of options on cross-media ownership, from retention of existing rules to a reliance on individual media rules and competition law. The proposal of SMG which we heard in evidence, where limits on ownership would be based on as assessment of media revenue, was rejected on the basis that revenue was not a good proxy for influence in public debate.[68] To augment its proposals in the face of this criticism, SMG has since added a list of "prime media assets" (to be determined by Government) to its scheme. Ownership of these assets would also be limited to a certain number.

82. News International and Scottish Media Group (SMG) argued that limits on media ownership on the grounds of quantity or nationality were unnecessary because it was the local market that determined the content of local individual media outlets. Any attempt to "foist" an agenda on consumers would be countered by the purchase of an alternative product. SMG's proposal, outlined above, was developed in response to the Government's position.[69] News International also questioned the legality of the restrictions under the Human Rights Act and suggested that attempts to peg ownership levels or limit cross-media ownership prevented the free flow of investment and talent that a competitive media sector needed to flourish.[70]

83. Dr Irwin Stelzer, News Corporation, told us that he was concerned about the vertical integration especially where there was a horizontal monopoly at some level. He referred to BT and to the Office of Fair Trading's current investigation of Sky's pricing policy with respect to ITV Digital and ITV Sport's carriage on digital satellite. Dr Stelzer commented that: "I am not discouraged by the fact that the Office of Fair Trading is doing rather a comprehensive review of Sky's practices ... That is what competition policy does, that is why it is a good thing."[71]

84. We believe that the case for particular restrictions on media, or cross-media, ownership in any sector is now out-dated. These restrictions should therefore be removed.

68 Consultation on media ownership rules, DCMS, November 2001 Back

69 Ev 183 Back

70 Ev 207 Back

71 Q 568 Back