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Wednesday, 8 May, 2002, 05:03 GMT 06:03 UK
Media ownership laws to be relaxed
Rupert Murdoch, chairman of News International
New ownership laws could affect Rupert Murdoch
Rupert Murdoch could bid to take over Channel 5, under proposed new media laws.

The government has said it wants to scrap the law banning large newspaper groups from buying Channel 5 and radio licences.

But newspaper groups would still be barred from owning a significant stake in the mass-market ITV.

Outdated rules on media ownership have hampered growth and adaptation for too long

Kim Howells
Culture Minister
Culture Secretary Tessa Jowell announced the proposals as she unveiled the government's long-awaited Communications Bill in the Commons on Tuesday.

The Bill potentially clears the way for the two biggest ITV companies, Carlton and Granada, to merge.

It also sets out tougher regulations for the BBC, to create a level-playing field with commercial broadcasters.

It would also allow media moguls from outside the EU to buy some broadcasting companies.

Protecting diversity

"For far too long the UK's media have been over-regulated and over-protected from competition," Ms Jowell told MPs.

She said she wanted liberalise the market but at the same time protect the diversity and plurality of the UK's media.

Due to the complex nature of the government's proposals there would be further period of consultation with the media industry and full scrutiny by both houses of Parliament, she stressed.

Patricia Hewitt, Trade Secretary
Patricia Hewitt said the plans were "proprietor neutral"

The draft bill proposes a new "light touch" regulator Ofcom - to replace existing bodies such as the Independent Television Commission (ITC) and telecom regulator Oftel.

This would act as a "one-stop" shop for all complaints.

Under the proposals, companies outside the EU would be able to bid for ITV companies for the first time.

But regional ITV programmes would be protected by core safeguards designed to ensure there are a "range of voices" locally and nationally.

ITN concern

Carlton and Granada would no longer be prevented from merging by media law - but they would still be subject to Competition Commission scrutiny.

A less onerous regime is necessary if Britain's leading role in these industries is to be preserved

Tim Yeo
Tory culture spokesman
"We will through tough content regulation ensure that we preserve the distinctiveness of British broadcasting while opening up the possibility of investment from all over the world," Ms Jowell told MPs.

She said ownership rules of news provider ITN would also be changed, following recent concerns about the quality of its service.

Opposition reaction

Shadow Culture Secretary Tim Yeo broadly welcomed the liberalisation of the broadcasting market.

But he said "the acid test" of the government's proposals would be whether regulation would operate "with a light touch rather than a heavy hand".

Nick Harvey, for the Liberal Democrats, also welcomed the "general direction" of the draft Bill.

But he called for a stronger commitment to improving ITV's news service and protecting regional programming.

Meanwhile a spokesman for Mr Murdoch's company said: "News International welcomes the overall deregulatory approach laid out in the announcement today.

"We have yet to study the government's detailed proposals and the draft bill."

'No Murdoch clause'

Channel 5 declined to comment on the proposals until station chiefs had been able to look at their full implications.

But the organisations that will make up Ofcom said: "We welcome publication of the draft Communications Bill and the move towards a modern and flexible regulatory framework for the converging communications sector.

"The communications industry will benefit from a more flexible approach to regulation, minimising regulatory burdens and providing consistency across all communications networks."

But Julian Petley, who is chairman of the Campaign for Press and Broadcasting Freedom, expressed concern at the "rolling back of regulatory safeguards in the media".

"Now we will see power concentrated in the hands of unaccountable bureaucrats and media owners," he said.

In the Commons there was concern that the new laws would lead to a takeover of Channel 5 by Mr Murdoch's News Corporation, which owns 32% of the British newspaper market.

Under existing rules anyone who controls more than 20% of the national newspaper market is prevented from controlling a terrestrial television licence.

In a briefing for reporters, ministers were careful to guard against suggestions that they were giving Mr Murdoch any special favours.

Trade Secretary Patricia Hewitt said the proposals were "proprietor neutral".

And asked about the possibility the plans could become known as the "Murdoch clause", Culture Minister Kim Howells replied: "Not if I have anything to do with it."

The BBC's Rory Cellan Jones
"For Rupert Murdoch, another door is opening"
Culture Secretary Tessa Jowell
"The important thing is that we secure diversity"
Former Sunday Times Editor Andrew Neill
"He [Murdoch] would not get a good return for it"

Murdoch move?
Should media ownership laws be relaxed?

Charting its past, present and digital future
See also:

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