Ofcom backs regular plurality reviews for powerful media firms

Proposals compiled in report for culture secretary Jeremy Hunt were prompted by News Corp’s failed BSkyB takeover bid

Potential concentrations of media power should be subject to regular, formal reviews, communications regulator Ofcom concluded on Tuesday in a document compiled for culture secretary Jeremy Hunt.

The reviews would be designed to ensure that no one media organisation – such as the BBC or News Corporation – gradually gains too powerful a position in British media because their market shares grow as rivals struggle.

However, because measuring media plurality is an inexact science, the regulator rejected the idea of proposing a specific cap on market shares. It said it was up to parliament to determine what cross-media ownership limits should exist.

Ofcom was asked to produce the recommendations after delivering a public interest report into News Corporation’s ill-fated attempt to takeover BSkyB in December 2010. The regulator concluded that the combination of News Corporation’s newspapers and BSkyB did raise plurality questions.

The regulator found that the existing conditions for testing media plurality were out of date because under current laws, the size of any one media group can only be examined when a media merger is referred to the regulator by the minister responsible for adjudicating on the bid.

Rejecting the idea of imposing an absolute limit on news market share across TV, newspapers and online, Ofcom said that while the concept is “simple to understand … it is also inflexible”. The idea was lobbied for by the Daily Mail-owner DMGT, which argued for a 30% “hard cap”.

The regulator said in a document published on Tuesday: “Ofcom does not believe a prohibition on market share is currently advisable. Instead, in the interests of flexibility, plurality concerns brought about by high-market share should be addressed through a periodic plurality review.”

However, Ofcom backed away from calling for a change in the terms of current cross-media ownership laws, which stop a company with more than 20% of national newspaper circulation from holding more than 20% in an ITV licence. The regulator argued that “the case for retaining or removing this rule in the context of a new proposed plurality regime is a matter for parliament”.

Ofcom also said the BBC should also be included in any plurality review, although the “BBC’s position itself should not trigger a review”. It noted the BBC’s annual spend on news and current affairs was £430m for 2011, more than all the other TV and radio broadcasters combined.

Governance body, the BBC Trust, should assess the corporation’s contribution to plurality, both in the UK market as well as plurality within the BBC, on an ongoing basis in tandem with the wider market review. Ofcom added that online media, specifically news websites, should be included in a plurality review.

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