TV market to be opened up ahead of digital revolution:the queen's speech

MATHEW HORSMAN

Media Editor

The Government yesterday confirmed it would introduce a radical new Broadcasting Bill to "extend choice and competition" in the UK media industry.

The effect will be to relax rules governing cross-ownership among newspaper, television and radio companies and to pave the way for the introduction of digital terrestrial television within two years.

The Bill, based in part on two White Papers published earlier this year, will be tabled at the end of the month.

A last-ditch lobbying campaign is expected from media companies aimed at overturning some key proposals in the Government's original plans.

The White Paper on Media Ownership, published in May, proposed new rules that would allow greater cross-holdings among newspapers, television and radio companies. It would free newspaper groups, with the exception of the two biggest, Rupert Murdoch's News International and the Mirror Group, to control broadcasters for the first time.

The White Paper on Digital Terrestrial Broadcasting, released in August, proposed complicated rules for the introduction of new digital TV services, bringing as many as 20 new "over-the-air" channels to UK homes, but only if televisions are fitted with special decoders.

Existing terrestrial broadcasters - the BBC, ITV, and Channel 4, along with the planned Channel 5 - would be guaranteed a place in the digital future.

Digital plans have already been criticised by many commercial media companies and by the BBC, which have argued in submissions to Virginia Bottomley, the Secretary of State for National Heritage, that her proposals are unworkable.

Specifically, they believe the Government's preference to award licences for "multiplexes" of up to three digital channels to commercial middlemen would put broadcasters at a disadvantage.

They also call on the Government to set a firm schedule for the transition from traditional analog television to digital, claiming that the investment necessary to launch the new services will only be forthcoming if the timetable is known in advance.

For its part, the BBC has also asked that a multiplex be set aside solely for the use of the public service broadcaster.

Views on the Government's plans to reform cross-media ownership rules received a mixed response when they were unveiled last May.

Companies such as Associated Newspapers, publishers of the Daily Mail and the Evening Standard, welcomed the Government's decision to allow newspaper groups to control television broadcasters, subject to a ceiling of 15 per cent of the total television market.

But both Mr Murdoch's News International and the Mirror Group were highly critical of the limits placed on companies which already control at least 20 per cent of the national newspaper market.

Several ITV companies, including MAI, the conglomerate which controls Anglia Television and Meridian, also complained about the Government's refusal to lift the limit of two ITV licences that can be held by a single company.

The City still expects the limits to be lifted, perhaps by the time the draft legislation is tabled, in two weeks' time.

The shares of some ITV companies have risen sharply on expectations that large broadcasters will be able to own more than two licences.

Small media companies are concerned that they will be swamped by broadcasting giants when digital TV arrives.

A spokesman for the Department of National Heritage said yesterday that the Government had reflected on the advice provided by the industry, but gave no indication as to whether the proposals would be changed.