How viewers could miss out in the TV shake-up

Appeasement, said Winston Churchill, consists of being nice to a crocodile in the hope that he will eat you last. In the world of UK broadcasting, the leading crocodile is Rupert Murdoch, controller of 32 per cent of the nation's newspaper circulation and prime mover in the satellite channel BSkyB. When New Labour commenced its rise to power, one of the first things Mr Blair and his cronies did was to square Murdoch. Blair was duly dispatched to some tropical island to address the assembled executives of Murdoch's media empire. Shortly after his return, The Sun endorsed New Labour. The rest, as they say, is history.

But there is no such thing as a free lunch in this world, and for some years commentators have been wondering what Rupert Murdoch got in return for his endorsement of the Blair project. The new draft Communications Bill may provide the first glimmerings of an answer.

For some time it has been clear that Murdoch hankers after owning a UK terrestrial television network. Why so? Does he not already possess a perfectly serviceable satellite network? Well, yes, but there are, it appears, limits to the numbers of punters who can be persuaded to put dishes on their roofs or otherwise subscribe to Murdoch's output. Despite even the blandishments of wall-to-wall televised football, golf, rugby, cricket and synchronised swimming, it seems that the great British public is absurdly attached to good old-fashioned terrestrial TV - the kind you get via the aerial on your chimney. If Murdoch was ever to reach these recusants, then he would have to do so via the aforementioned aerial.

Why, then, didn't Murdoch simply buy a terrestrial company - say Granada or Carlton? Answer: because the legislative rules of the 1990 Broadcasting Act forbade it by imposing stringent restrictions on "cross-media ownership". These stipulated that if you owned a lot of newspapers then you couldn't own a TV station. Or, to put it in crude terms, Murdoch would have to choose between his beloved newspapers and, say, Granada - a choice that was never likely to appeal to him for the understandable reason that one should never give up a licence to print money in return for the mere possibility of earning some later.

So, what was to be done to assist Murdoch in achieving his terrestrial ambitions? The judgment was made that simply tearing up the rules and allowing him to buy Carlton or Granada - the two remaining survivors of the ITV wars - would have caused outrage. The new Communications Bill ingeniously sidesteps the problem, however. It retains restrictions on cross-media ownership of mainstream ITV companies, but relaxes them in relation to Channel 5 on the fatuous grounds that because its signal cannot reach more than 80 per cent of the population, it isn't "mainstream".

Stand by, therefore, for a rerun of what Rupert did to the British press when he bought the ailing Sun in the 1960s and used it as a battering ram to transform the newspaper landscape. We can expect that Murdoch will buy control of Channel 5 in due course. (The current owners will no doubt protest that they will never sell, but everything has its price in this world.) With relentless cross-promotion (via The Sun, Times and News of the World), access to Premiership soccer and fewer public-service obligations, a Murdoch-fuelled Channel 5 could easily overtake ITV within five years - thereby giving the crocodile what it craves and enabling New Labour to say that its hands are clean.

And what of ITV? Older readers will remember it as a system of umpteen regional companies such as Yorkshire, Tyne-Tees, Border and Anglia. It is now reduced to a rump of two ailing behemoths - Granada and Carlton. Both companies are terminally enfeebled by a combination of incompetence, advertising recession and their disastrous OnDigital joint venture. The normal laws of the free market would have dictated that one would have eaten the other by now. But, again, the ancient rules of the old Broadcasting Act precluded this logical outcome. The new bill sweeps these away, leaving the way clear for the law of the jungle to prevail. A merger may make sense commercially, but it remains to be seen whether viewers will benefit in any way.

The Communications Bill will alter the cultural landscape. Proponents of similar "reforming" legislation are always talking of increasing competition, broadening choice and benefiting the consumer, but the outcome is invariably less variety and an expansion of corporate power. Thatcher's Broadcasting Act wiped out good companies like Thames TV and, in the end, led to the destruction of ITV. Blair's new bill will have similar long-term effects - and leave us with the BBC as the only competition to Rupert Murdoch's multimedia empire. Next business: privatisation of the Beeb?