UK to look at media ownership after hacking scandal

Reuters News
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Posted: Sep 14, 2011 2:05 PM
UK to look at media ownership after hacking scandal

By Kate Holton

CAMBRIDGE, England (Reuters) - Britain, embarrassed earlier this year by its apparent inability to block Rupert Murdoch from expanding his empire, is to examine new ways to measure the influence of media owners and whether limits should be set.

Murdoch's News Corp withdrew a bid to buy the rest of pay-TV group BSkyB it did not already own in July, after months of protests by rivals and politicians who said the deal would give too much control to one company.

But it was only the fallout from the phone hacking scandal that forced the media magnate to pull the bid, with media secretary Jeremy Hunt all but set to approve what would have been one of the most controversial deals in years after it was cleared by regulators.

Hunt now plans to use a new Communications Act to set out how regulators should measure consumer contact with media across a range of platforms such as online, TV, radio and newspapers.

"I have today asked (regulator) Ofcom to examine what the options are for measuring media plurality across platforms and recommend the best approach," he will tell an industry gathering on Wednesday evening, according to the transcript.

"In particular I have asked them to look at whether or not it is practical or advisable to set absolute limits on news market share."

The announcement is the second move to stem from the phone hacking scandal in one day, after the Australian government said it would launch a review of its media regulations following the events in Britain, where journalists hacked in to the phones of celebrities and murder victims to write stories.

However any changes could also be good news for James Murdoch, the son of Rupert and chairman of BSkyB, as he has consistently called for the state broadcaster, the BBC, to be cut back as it also has a huge presence on TV, radio and online.

The only cross-media restriction currently in place prevents any newspaper owner who accounts for more than 20 percent of total circulation -- such as News Corp -- from owning more than 20 percent of ITV, the country's biggest free-to-air commercial broadcaster.

At the time of the proposed deal, News Corp owned around a third of the national newspaper market and buying BSkyB would have given it control of one of the most powerful voices in television and radio news.

Regulator Ofcom was tasked to investigate the deal and the impact it would have on the number of voices in the media, and had to use a range of methods as different measurements are used to measure audience levels on each platform.

The deal was quickly approved by Brussels, which looked at the impact in terms of competition, and eventually by British media regulator Ofcom after it imposed some conditions to maintain the number of voices in the sector.

"As a citizen, I want plurality of news provision so I can be confident that no one person or organization exerts too much control over where I get my news from," Hunt will say.

"We need to ensure that there is the opportunity for multiple voices. And we must take care that power is never over-concentrated in a few hands."

Other areas raised by the takeover was the involvement of politicians in such a difficult case and the fact that Ofcom could only investigate changes to media plurality once a transaction had been proposed and could not take changes due to organic growth or from technology in to account.

Hunt suggested that both of those issues could change.

The government hopes to have a new Communications Act in place by the end of this parliament in 2015.

(Reporting by Kate Holton; Editing by Mike Nesbit)