Cabinet gives green light to TV mergers

Murdoch: in the dark over free-to-air TV expansion

Tony Blair has cleared the way for an eventual merger between Carlton Communications and Granada, but has kept Rupert Murdoch in the dark over whether he will be rebuffed in his attempts to expand into free-to-air TV.

Cabinet ministers have decided to press ahead with their plans, first flagged up in the Communications White Paper in December 2000, to scrap the rules limiting one TV company to 15 per cent of the television audience.

The move will provide fresh impetus to merger talks now expected to restart following the collapse of ITV Digital.

It will mean, when legislation is approved by Parliament next year, that Carlton and Granada will only have to comply with competition law if they decide on  a merger.

The Government will announce its decisions on how far it is prepared to go in relaxing media and cross-media ownership rules next week, when it publishes the long-awaited draft communications bill, paving the way for legislation in the autumn.

Both Murdoch’s News Corporation and BSkyB have lobbied for the Government to go further by abandoning the rule preventing a national newspaper with 20 per cent of the market from buying more than 20 per cent of ITV, Channel 5 or a national or local radio service.

The Newspaper Society and other national newspaper groups have also pressed for a similar relaxation since the Government invited them to respond to a consultation paper before Christmas.

BSkyB has told ministers they would be accused of double standards if they relaxed the rules for ITV but not for Sky.

"If ITV were allowed to consolidate, it would have a total audience share of just under 30 per cent and it could be owned by any of the proprietors of The Daily Telegraph, The Independent, Financial Times, Daily Express, Daily Mail or the Daily Mirror," BSkyB told the Government in its response.

"In contrast, if the cross-media ownership rules are retained, then Sky could not combine with, say, Channel 5 to achieve an audience share of just under 12 per cent. At best, this is illogical; at worst, it is discriminatory."

Publishers and broadcasters will have a further opportunity to press for changes if the Government’s decision goes against them.

There will be another three months’ consultation for the industry to respond while a joint committee of MPs and peers examines the draft bill.

If the Government still refuses to budge, they can still lobby MPs and peers to press for amendments when the main communications bill is published in the autumn.

by David Rose

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