BSkyB bid dropped – now we must push for media ownership reform

by Anthony Painter

It would be lovely to think that the BSkyB bid has been dropped because of Parliamentary unity and clarity of voice. Unfortunately, this is not really the case. The reality is that two other factors are likely to have led to this decision.

The increasing political and media attention on the scandal in the US and the impact of this focus on News Corporation’s financial standing is undoubtedly a major factor. Questions posed yesterday by Senator Jay Rockefeller who has insisted that allegations that victims of 9/11 had their phones hacked should be investigated have forced the Murdochs into a rear-guard action. BSkyB is no longer the focus- News Corporation itself is the concern and the corporate share buy-back yesterday indicates the emerging crisis for the company.

The second issue is the ticking time-bomb of the Ofcom ‘fit and proper’ test. If they fail that, then not only would the bid have been stopped in its tracks, if may have had to divest itself of its existing highly lucrative 39% shareholding.

There is an important caveat to this. Rupert Murdoch is nothing if not tenacious. His thinking will be that this is the end of the battle but not the war: stabilise the situation in the US and come back later. So be it. However, next time the rules of the game must be different. This is not about one individual or a family or a single company. It is about understanding how we’ve been shown the consequences of allowing large concentrations of power to swell- corruption. Now we must say: never again.

It would be astounding in reality if News Corporation was able to launch another bid in the foreseeable future whatever Rupert Murdoch may be hoping. Nonetheless, if it does it should be on different terms. The Communications Act 2003 is now looking like a highly flawed piece of legislation: most particularly, its public interest test is too narrow. It is not good enough to wait for the public inquiry to report- we need to draft some amendments to our media ownership laws immediately. The following would seem to be sensible:

–      Ofcom should be asked by the secretary of state to continue with its ‘fit and proper’ assessment of News Corporation executives with the evolving criminal investigations taken into consideration.

–      ‘Fit and proper’ itself must be reviewed to ensure that it encompasses executives presiding over the types of malign and illegal behaviour we have seen within News International over the past few years.

–      Cross-media ownership should be more heavily restrained. 20% ownership is the current limit. It should be reviewed with a view to lowering it and it must be revisited should a media company exceed the new limit even after a takeover has occurred.

–      Content provision and carriage should be separated. In other words, no company should be both a content provider and media infrastructure service provider.

–      The BSkyB plan could ultimately evolve its digital television into a walled and bounded internet platform- this is anti-competitive and should not be allowed. If a company provides access to any of the internet, it should be obliged to provide access to all of it on an equal footing (ie same ease of access and download speeds etc.)

These changes will ensure that corporate media power will be heavily constrained. It will not hamper free, fair and determined journalism which is a public good. It will create an open, diverse, and dynamic information market.

We can’t drag our feet in diluting concentrations of media power. We now have the opportunity to act with clear heads.

News International is the power lever; BSkyB is the cash machine. At least the bid has been stopped in its tracks. We are at the end of the beginning of this scandal. Now we can push for an open, competitive, plural, transparent, and dynamic media and an enriched public and commercial space. Time to get on with it before it’s too late again.

Anthony Painter is an author and critic.

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5 Responses to “BSkyB bid dropped – now we must push for media ownership reform”

  1. Don Gately says:

    I fail to see how you could really toughen up the “fit and proper person” test without bumping up into EU legislation. There are limits to to the cap on media ownership as well if that is deemed to be anti-competitive.

    What is needed ultimately is a review of EU competition legislation and the single market reforms which not only limit regulation but the general ability of the state to make decisions on how it engages with the private sector. Demanding that so we can have more political leadership on ownership would see labour finding itself in some very unusual company

    And also, if you’re going to stop those in charge of media infrastructure from providing content you’re going to have to tear the BBC apart. Not a smart suggestion.

    and anyway – nothing will be politically practical now with the public inquiry into the media. Labour can’t call for an inquiry and then turn round to demand immediate changes before it reports. A process is in place and labour have to be committed to it.

    Can we have less of the exhortation to storm the barricades and a little more rational thought. Act in haste, repent in leisure and all that.

  2. Don, you’re imagining impediments that aren’t there. What European block is there on the things I’ve proposed? EU competition law governs anti-competitive legislation. It doesn’t prevent pro-competitive legislation!

    The BBC objection is always the second one that people reach for. Again, you don’t specify how what I’ve proposed will have a significant impact on the BBC. It doesn’t own the airwaves- it’s given access to them by Parliament in return for which it is heavily regulated.

    On the public inquiry, as Brown pointed out yesterday, it will only brush these issues. Public discussion and debate doesn’t stop because there’s a public inquiry!

    I agree with your desire for ‘rational’ debate. That means dealing with the reality not inventing obstacles to us being able to act in the public interest.

  3. chris says:

    I just wrote to my (unfortunately Tory) MP :-
    “in the wake of the News International scandal, I’d like you to consider supporting calls to limit the holdings of individuals and Corporations in News Media formats. In the interests of democracy we must do our utmost to promote freedom and diversity in News supply. No-one should be allowed to build up such levels of control over what is in the public domain again.”

  4. Don Gately says:

    “What European block is there on the things I’ve proposed? EU competition law governs anti-competitive legislation. It doesn’t prevent pro-competitive legislation!”

    there are limits to how you can structure a fit and proper person test as it limits the ability of a person to engage in business. The bulk of any such test across the different industries relate to criminal offences such as fraud or embezelment which ban someone as a director. Having someone not be able to own a media business because they employed incompetent managers who employed dodgy staff would cause a challenge because of the restraint it causes.

    If a murdoch gets a conviction that’s a different matter – and already covered by law. You need to show a direct reason that’s provable in court why a murdoch (or director of equivalent status) is directly responsible for the criminal behaviour. Which although it occured across the NI group was not nearly the bulk of their activity.

    Much of NI’s output may be morally objectionable but that’s, sadly, no reason for a restraint of trade in the current legal framework

    “Again, you don’t specify how what I’ve proposed will have a significant impact on the BBC.”

    as for the BBC – they own and maintain much of the broadcasting infrastructure. They are a part owner in freeview and have invested significantly in order to promote platforms such as DAB. And that’s before you even get to the internet – should the BBC be allowed to monopolise iPlayer for example.

    “as Brown pointed out yesterday, it will only brush these issues. Public discussion and debate doesn’t stop because there’s a public inquiry!”

    don’t quote brown before talking about rational debate. Brown’s speech yesterday was saddening and he’s clearly hurt. I don’t think he did labour or himself any favours as he rewrote the past, looking for someone else to blame. Again.

    and yes, debate continues but you aren’t asking for a debate. You want to “push” for radical change now. But if you do just want debate then fine, glad you’ve changed your position

  5. Nice try @Don Gately but you’ve fallen well short in your attempt to kill the debate about diluting media power to say the least….

    1. Fit and proper relates to the 1990 Broadcasting Act. It’s not derived from European law. There should be ongoing Ofcom assessment in line with the evolving criminal proceedings. But that was in the article above so I refer you to that.
    2. There is nothing is the review of ‘fit and proper’ that I proposed that in any way violates European law. If it does say how. You haven’t.
    3. BBC- ‘promotion of DAB’. What are you saying here- that because BBC markets its DAB services it owns the airwaves? I don’t really know where to start with that as an argument….
    4. BBC freeview. Are you really saying that the provider JV of Freeview in which the BBC has a 20% stake last time I looked is a barrier to separating carriage and content? Its stake guarantees it access; it doesn’t give it control over the market. (as with the other providers…)
    5. Iplayer. It’s accessed through the open Internet. It doesn’t prevent the provision of other players of which there are many- every major channel has one.
    6. Your comments about Gordon Brown are subjective and personal. I’ve made no such comments about Rupert Murdoch and associates in the above piece.
    7. And this is the key point, you’ve basically set off on a course to erect all sorts of obstacles to acting on concentrated media law in an effort to say we can’t act because of x,y,z. What I’ve provided are some issues/principles to be addressed/ inform action. In other words I’ve looked to promote debate while you’ve sought- on false pretences- to kill it. Why?

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