Govt assures industry over ITV consolidation

The Government has dismissed the advertising industry's fears that

the creation of a single ITV company will drive up the cost of

advertising.



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

abolished.



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

services.



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

supervised.



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.



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