UK government to relax media ownership laws

The UK government has announced that it wants to scrap the law banning large newspaper groups from buying Channel 5 and radio licenses.

However, though newspaper organisations would still be barred from owning a significant stake in the mass-market ITV, under the proposed laws, media mogul Rupert Murdoch, who owns News Corporation and Sky could mount a bid to take over Channel 5.

Culture Secretary, Tessa Jowell, announced the proposals as she unveiled the government's long-awaited Communications Bill in the Commons.

Ms. Jowell told MPs that the UK's media had been over-regulated and over-protected from competition and added that she wanted to liberalise the market, but also protect the diversity and plurality of the industry.

The draft bill proposes a new regulator, Ofcom, to replace existing bodies such as the Independent Television Commission (ITC) and telecom regulator, Oftel. Ofcom would act as a "one-stop" shop, dealing with all complaints.

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

The proposals also set out tougher regulations for the BBC, and specially designed safeguards for regional ITV programmes.

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

The Bill potentially clears the way for the two biggest ITV companies, Granada and Carlton, to merge, although they would still be subject to Competition Commission scrutiny.

However, there was concern in the Commons that the new laws would lead to a takeover of Channel 5 by Rupert Murdoch's News Corporation, which currently owns 32% of the British newspaper market. Under the existing rules, anyone who controls more than 20% of the national newspaper market is prevented from controlling a terrestrial television license.

In a briefing for reporters, ministers guarded against suggestions that Mr. Murdoch was being given any 'special favours', with Trade Secretary, Patricia Hewitt claiming that the proposals were "proprietor neutral". When asked about the possibility of the new plans becoming known as the 'Murdoch Clause', Culture Minister, Kim Howells, replied: "Not if I have anything to do with it."

Meanwhile a spokesman for Mr. Murdoch's company said that News International welcomed the overall deregulatory approach laid out in the announcement.

Channel 5 have declined comment on the proposals until station chiefs have examined their full implications.

(KMcA)