Government unveils a 'radical' plan to reform media laws

The Government spelled out what it termed its "radical plans to overhaul and simplify the legal framework for the media industry" yesterday.

The draft Communications Bill, which will now be subject to three months' consultation and scrutiny in Parliament, notably paved the way for non-European ownership of television stations; for a newspaper owner (such as Rupert Murdoch) to buy Channel 5; and for the BBC to be subject to scrutiny from a national regulator as well as from its own governors. It also stipulated that there must be an "adequate level of financial support for the ITV news contract".

The draft Bill allows the new media industry regulator, Ofcom, to regulate the price charged by Mr Murdoch's Sky Television to public service broadcasters for access to its system ­ something the terrestrial broadcasters have been demanding for some time.

But on two of the key issues, regulation of the BBC and changes in media ownership, the Government is keeping its powder dry. It will not pronounce in detail on the BBC until it undertakes a full review of the corporation. And the rules it suggests on media ownership are not actually part of the Bill, but separate proposals published alongside the draft legislation. However, media ownership rules will form part of the final Bill.

Jointly published by the Secretary of State for Trade and Industry, Patricia Hewitt, and the Secretary of State for Culture, Media and Sport, Tessa Jowell, the draft Bill aims to bring the regulatory framework up-to-date, "responding to the technological and market changes driving modern media".

Ms Jowell said: "For too long the UK's media have been over-regulated and over-protected from competition. Despite this, the last 10 years have seen a dramatic increase in the range of voices in the market place.

"The draft Bill we have published will liberalise the market, so removing unnecessary regulatory burdens and cutting red tape, but at the same time retain some key safeguards that will protect the diversity and plurality of our media."

The new regulator

The Office for Communications (Ofcom) will replace the existing five regulators (the ITC, Radio Authority, Oftel, Broadcasting Standards Commission, Radiocommunications Agency).

It will apply a consistent scheme for regulating the public service broadcasters, with greater regulation for the BBC and more self-regulation for the others while keeping the core responsibilities of the BBC governors, with additional oversight by Ofcom, but with back-stop powers resting with the Secretary of State for Culture, Media and Sport.

Ofcom will have powers alongside the Office of Fair Trading to apply competition rules in the communications sector. It will establish a board to ensure that the public's interest in the nature and quality of TV and radio programmes is strongly represented.

In addition, it will remove the requirement for licensing of telecommunications systems, so removing about 400 licences, and replace it with new regulations. It will also allow trading to ensure there is efficient use of the available radio spectrum.

Media ownership

In its final form, the Bill will reform the rules on media ownership. There will be significant deregulation to promote competition and investment, but a few core rules will be retained "to protect diversity and plurality".

The Government plans to remove most ownership rules within the TV, radio and newspaper markets where competition law tends to encourage dispersed ownership. But some will be retained as minimum guarantees of diversity.

Limits on cross-media ownership

Three key limits on cross-media ownership will be kept to "safeguard the vibrancy of debate at every level of society ­ national, regional and local".

Firstly, any newspaper group with more than 20 per cent of the national market will not be able to own a significant stake in ITV. This rule will be kept because most people get their news and information from national newspapers and from terrestrial television.

Secondly, a parallel regional rule will prevent anyone owning all the newspapers and the regional ITV licence in any region or major city.

Thirdly, there will be a scheme to ensure that at least three commercial local or regional media voices exist ­ in newspapers, television and radio ­ in addition to the BBC in almost every local community.

Content regulation

Where necessary, the Government plans to retain and strengthen regulation of content to ensure the quality, impartiality and diversity of broadcasting services.

Ofcom will have the power to investigate the news and current affairs programming of any local radio service if it has concerns about accuracy or impartiality.

In addition, it will have a new duty to protect and promote the local content of local radio services. It will be able to vary licences on change of control, to ensure the character of the service is maintained. For ITV, this will protect regional production and programming requirements. Ofcom will oversee the nominated news provider system for ITV, to ensure independent news on free-to-air public service television.

BBC

The new body will have powers over the BBC. The draft Bill is silent on what these new powers will be, as ministers are going to wait until they undertake a review of the BBC to spell them out.

But Kim Howells, the under-secretary for Culture, Media and Sport, said in January thatwhile the BBC governors will continue to uphold and "protect the BBC's political and editorial independence and call management to account" there will be new requirements monitored and enforced by Ofcom.

"In broad terms the same balance of self-regulation and external regulation will apply in the case of both the BBC and other broadcasters," he said. "The overall effect will be that the BBC will be subject to increased external regulation while other public service broadcasters will face reduced external regulation. Thus the BBC's position will be brought closer to that of other broadcasters."

Newspaper mergers:

There will be no requirement for the Secretary of State's prior consent to newspaper transfers, and the current criminal sanctions against purporting to transfer a title without consent or breaching a condition of consent will be removed.

Fines on broadcasters

The Bill allows Ofcom to impose fines on television broadcasters who contravene their licence provisions. Those fines will not exceed the greater of £250,000 or 5 per cent of qualifying revenue (£100,000 or 3 per cent for a first offence). In relation to radio licensing, the Bill raises the ceiling for financial penalties for contravention of licence conditions from £500,000 to £250,000.

Key features

* Establishment of The Office of Communications (Ofcom) to draw together the work of five different regulators into a single body.

* All rules preventing non-European ownership of British television and radio licences to be scrapped.

* Restrictions on ownership of more than one national television or radio network lifted.

* Joint ownership of television and radio stations to be allowed.

* A reform of regulations to make it easier for newspaper mergers.

* Large newspaper groups allowed to acquire Channel 5 or radio licences.

* Changes to allow single ownership of ITV.

* Plans to ensure that most communities have at least three local commercial radio operators.

* Giving commercial broadcasters greater freedom to set their own standards.

* Incorporate into UK law the new EC directives that overhaul the regulation of electronic communications.