MEDIA FORUM: Bill splits advertiser opinion on regulation issues - As the dust settles after the Communications Bill, some in the industry feel ignored, while others remain optimistic, Alasdair Reid writes

Did you get what you were hoping for from the Communications Bill? If you're a media owner the next few months will be interesting, to say the least. Almost everyone is now a potential buyer or seller in the mergers and acquisition stakes - and the doors are now open to non-European Union players. In other words, the Yanks are coming.

But advertisers and media agencies will perhaps view this liberalisation with mixed feelings. Advertisers heartily approve of free markets and recognise that consolidation is inevitable - after all, most advertisers (and agencies too, for that matter) are part of conglomerates consolidated on a global basis. So they realise that legislation must acknowledge this reality. But they also want the media sales market to remain as fragmented as possible.

Does the Bill even try to square this circle? And does it address concerns about the role of the BBC? Many in the advertising market had been hoping that new legislation would "put the BBC back in its box

(in other words force it to run public service broadcasting content and compete less aggressively for peaktime ratings) by bringing it under the jurisdiction of a new industry-wide regulator.

And, indeed, the Bill will usher in Ofcom, the grand edifice that will replace half a dozen existing media regulators. But will it address advertisers' concerns? Jim Marshall, the chairman of the IPA's Media Policy Group, isn't too optimistic. He says: "I think a lot of people are still a bit confused about many aspects of it but, yes, we're massively disappointed that there appears to be no reference to, or acknowledgement of, advertisers' views. That's a glaring omission."

Marshall admits he was surprised at the extent of the liberalisation proposed - but he doesn't actually believe it will help the process of consolidation at ITV. "It could complicate it instead,

he argues. "It would still be referred (to competition authorities) on an advertising basis. The BBC continues to be an interesting issue and I think they've ducked it at the last minute because it's still not clear what Ofcom's role will be. There must be a structure of clear accountability and a system of penalties. In radio there's still too much emphasis on the interests of the public and of media owners rather than advertisers - and there are now some interesting opportunities for radio companies. I could even envisage them buying television companies. But anyone wanting to move forward in television will now have to talk to Lord Hollick, which he will doubtless enjoy."

John Blakemore, the advertising director of Glaxo SmithKline, also suspects that advertiser concerns have yet again been overlooked: "My initial reaction was that they haven't listened to a word advertisers have said. You'd have thought that there would be a recognition somewhere that, aside from the BBC, we fund the whole thing. Aside from that, I guess there was some surprise that everything's been opened up for non-European interests.

We were also hoping that there would be a clearer intent to regulate across the whole market, including the BBC. We had hoped there would be a clearer definition of public service broadcasting and the BBC's role as the cornerstone of that."

Would advertisers welcome the arrival of the Americans? Won't that blow a few more cobwebs out of the media industries here? "There's an initial emotional reaction - of course there is. Not long ago it would have been unthinkable. But then you think: 'What does it actually matter?' The business is about great programming and driving audiences and if they can do that successfully, what does it matter who's doing it? So US ownership would be neither a good thing nor a bad thing. We are owner-neutral,

Blakemore says.

Advertisers are also, as usual, concerned about what happens in the airtime market if ITV is sold as one. They also argue that the solutions being put forward - such as putting some ITV inventory through a nominally independent sales house - are risible.

Simon Marquis, the chief executive of Zenith Media, would agree with that - but he also welcomes many aspects of liberalisation: "These things are never strictly black or white. At one level, what ITV needs desperately is a strong and clear strategy for the brand as it moves forward. It has been hampered not just by the ITV Digital business and a whole serious of public relations setbacks but also by endless speculation about merger talks. It has tarnished a proud brand. The Communications Bill raises the prospect of a stronger ITV, which has to be a good thing. But that has to be qualified by our insistence as paying customers that our concerns about monopolies are taken seriously and acted upon."

There could, however, be a refreshing aspect to all of this. "As we move forward, the issue is still there of the extent of the BBC's commercialism and what its public service broadcasting remit actually means. But liberalisation has to be welcomed - and I think it has gone further than anyone expected. It will mean that the more aggressive media companies will be able to put together different configurations of media and that could be a very good thing because it could inject investment and new management vigour,

Marquis states.

Bob Wootton, the director of media and advertising affairs at ISBA, says the mood there has been increasingly upbeat as its members have digested the minutiae of the text. Or texts, actually - there's a policy document to be taken into account too, he points out.

"As regards the scope of Ofcom with respect to the BBC, this requires further clarification so it's too early to draw any negative conclusions there. Secondly, the Bill proposes a move to greater self-regulation in broadcasting, which is something that we have long advocated. The challenge is for the industry to come up with the relevant structures and it's now up to the industry as a whole to do its job and to shine," he comments.

And he concludes: "It opens up the (issue of) Channel 5 ownership, which could be beneficial for Channel 5 but if Channel 5 and ITV were owned by the same people that could raise competition concerns. The fact that the Office of Fair Trading and Ofcom will apparently have concurrent powers with regard to competition issues will need further clarification - and again we are hoping to make sure that any fears we have in this area will prove groundless. But our sense now is that these various papers contain a lot more regard for our interests than anything we have seen in the past."

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