MEDIA FORUM: Is the Government listening on media ownership? Alasdair Reid gets a feel of the media industry reaction to the newly published government consultation document on media ownership

Plurality. Not an easy word to say at the best of times - but it

has certainly become flavour of the month, especially in political

circles.

And why not? It's a feelgood word. It has a healthy, wholesome glow

about it. A generosity of spirit. And yet it sounds impressively

rigorous and philosophical.

You'll find it sprinkled liberally throughout the Government's

consultation document on media ownership rules, published last week. The

foreword, signed by the culture secretary, Tessa Jowell, and the

secretary for trade and industry Patricia Hewitt, lays out the ground

rules for their best of all possible media worlds. "The Government's

task," they state, "is to create a framework for media ownership which

protects (a) plurality of voices and encourages a diversity of content

while, at the same time, promoting the most competitive market for media

businesses and attracting new investment."

This is a stage in a long process that will lead eventually to a

Communications Bill sometime in the spring of 2002. Much of the

consultation paper was already touched upon in last year's

Communications White Paper, but it helps to confirm government thinking

on a few substantive points.

For instance, legislative barriers to the mergers of the last two

remaining ITV companies will be removed. The rule demanding that there

be two sellers of ITV airtime in London would go, as would the rule

preventing commercial TV companies from commanding more than 15 per cent

of the total audience.

But it did state that there should be a minimum of four free-to-air

terrestrial broadcasters. Surely Bob Wootton, the director of media and

advertising affairs at ISBA, is not against a bit of plurality and

diversity?

Well, yes. Up to a point. "This is a very worrying consultation document

indeed," he states. "It is at pains to establish plurality and diversity

but only as an editorial concept. Thus, outdoor isn't mentioned because

it doesn't carry editorial. The paper distances itself entirely from

market issues - they will all be passed to the competition authorities.

As such, from our point of view, it is critically flawed. It will let

all sorts of things slip through. We would have to say that the

Competition Commission hasn't served our interests too well so there is

not a wellspring of optimism there - and history tells us that when we

are in doubt we may be right to be sceptical."

Wootton is disappointed that the views of advertisers appear to have

been ignored here. "It's worrying that the subtleties of some of these

points appear to have been missed. We welcome the provision that there

shouldn't be fewer than four terrestrial television stations.

But we have always argued that the rule should be applied to the

commercial sector - and they have included in their reckoning the BBC.

It also has to be said that it fails to advance arguments about

cross-media ownership very far."

Several cross-media ownership options have been outlined - but many

observers believe that the Government would again be entirely happy to

see this issue hived off to the competition authorities.

Jim Marshall, the chief executive of MediaVest and the chairman of the

Media Policy Group of the IPA, says that in some ways the paper is quite

enlightened - for instance, in recognising that there should be

different rules for different media. But he says: "One of the most

interesting little titbits is its confirmation of the proposal to do

away with the rule that there can't be just one ITV company in the

London market. The implications are phenomenal, in terms of competition

and the structure of ITV. If we presume that there won't be a single

owner for the whole of the network for the foreseeable future, the

London situation could seriously unbalance the market. There would be a

huge potential to maximise revenues if one company did manage to take

control of London. Funds would flow in to London."

Do they just refer everything to the Office of Fair Trading and the

Competition Commission? The problem here is the lack of clarity. We

could get situations such as the proposed merger of Carlton and United

News & Media, where you had to wait months and then it was blocked. So

it could actually make takeovers more problematic.

The most worrying thing, Marshall says, is that there has been little

heed given to the concerns of advertisers. In some instances the

interests of advertisers coincide with those of media owners but in

others they don't. Where there is no competition in the market it could

bring problems for advertisers which could have an impact on the

broadcasting infrastructure.

Marshall thinks that it is too simplistic to just say: "Let's leave it

all to competition law."

Jerry Hill, the chief executive of Initiative Media, has an interesting

perspective on all of this. Not so long ago, when he was boss of the

TSMS sales house, he was a passionate advocate of consolidation within

ITV. Is he still of that mind? It's not an easy question, he

responds.

For instance, the issue may soon become academic if ITV's audience share

continues to erode. But, for the foreseeable future, it will always be

difficult to calculate the extent to which a single ITV could distort

the television airtime market.

He states: "To take a view on this you have to predict the chain

reaction spawned by legislative change and anticipate the implications,

not just of ITV consolidation but of other possible outcomes. That might

include calculating which companies seek to extend their interests into

the UK or extend their interests into TV from other media. You'd also

have to take into account how the smaller organisations would either

rationalise or seek alliances in response to compete. It is this that

will determine the impact on prices in the longer term."

And what about radio? Many analysts believe radio should take great

heart from the document, particularly its view that the complicated

points system (used to determine the maximum size of commercial radio

companies) should be done away with.

Paul Brown, the chief executive of the Commercial Radio Companies

Association, states: "This is actually the first time that we've seen

evidence that our viewpoint has been listened to. As for cross-media

ownership and companies that want to own television, radio and press, I

can't see any problem in that issue being left to the Competition

Commission. I accept that there are issues of plurality where local

radio is concerned, but I think broadly it should be possible for the

commercial sector to at least be able to match what the BBC does."