New Proposals on Media Ownership

Profession:Herbert Smith

A Consultation Document published jointly by the Department for Culture, Media and Sport and the DTI on 26 November 2001, sets out a number of proposals and options for reform of the media ownership rules. The Consultation Document continues the debate on media ownership launched in the White Paper on Communications (December 2000), and sets out some more developed options for change on which further consultation is invited. The Government is concerned that the existing media ownership rules are outdated, inconsistent and not flexible enough to respond to the rapid change which is currently taking place in media markets. New rules should provide a framework that industry and consumers can rely on, while being flexible enough to respond to the challenges of technological and market development.

The aims of any reform to the existing rules are to:

retain diversity of content from a plurality of sources

promote competition

be deregulatory where possible

be flexible in allowing legislation to adapt to changing market conditions

provide as much predictability as possible for business

The White Paper also promised to consider a lighter touch approach to newspaper mergers, which are currently subject to a stricter regime than general mergers. The Consultation paper now invites views on two options for reform:

Reform of the current regime to give OFCOM the duty of assessing whether a particular newspaper transfer would compromise the accurate presentation of news and free expression of opinion. OFCOM would advise the Secretary of State on whether to prohibit the merger or subject it to conditions on 'freedom of expression' grounds. The independent competition authorities (OFT and Competition Commission) would separately assess the merger on competition grounds.

An alternative process could involve the repeal of the special newspaper provisions. An exceptional public interest gateway under the reformed general merger regime would be created so that the Secretary of State could call in any newspaper merger case which gave rise...

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