The Government has dismissed the advertising industry's fears that
the creation of a single ITV company will drive up the cost of
In a consultation document on media ownership, ministers paved the way
for an eventual merger between Carlton and Granada by promising to scrap
the 15 per cent limit on the share of the ITV audience. It said the rule
preventing a single company owning the two London ITV licences should be
Acknowledging the ad industry's criticism of a White Paper published
last December, this week's document said some respondents had expressed
concern that consolidation in the ITV network could create a dominant
market position for ITV and force up the cost of TV advertising.
It added: "However, this is solely a market issue; the competition
authorities have to consider such matters and competition law should
provide sufficient protection."
The Government also brushed aside industry fears that its plans to
abolish the points system which restricts radio ownership would raise
the cost of advertising. It said that problems of concentration could be
handled by competition bodies and that the new regulator, Ofcom, should
ensure that there were at least three owners of Independent Local Radio
The document, issued by the culture secretary, Tessa Jowell, and the
trade and industry secretary, Patricia Hewitt, proposed ending the ban
on agencies holding TV and radio licences, although bids would be
The ministers dodged the issue of whether Rupert Murdoch should be
allowed to expand into terrestrial TV. They said competition law alone
would not safeguard the media's "vital role in a democratic society" but
outlined only a series of options on cross-media ownership.
The proposals will be in a draft Bill next year but legislation is
unlikely until 2003.