Media ownership blow to Murdoch

MINISTERS are set to retain strict limits on cross-media ownership, thwarting Rupert Murdoch's hopes of taking over ITV or Channel 5, in a draft communications Bill published today.

The Government has come under intense lobbying to lift the current restrictions, which stipulate that anyone who owns national newspapers with more than a 20% share in the market cannot control a terrestrial TV station.

Murdoch, who already owns The Times and the Sun as well as a 36% stake in BSkyB, will fall foul of the proposals which will prevent groups such as his owning a similar proportion of free-to-air TV or radio stations. But Culture Secretary Tessa Jowell, presenting the Bill to the Commons today, was expected to argue that the proposals have not been 'built around one man', and that the package was 'proprietor-neutral'.

The Government's communications White Paper, published months before the run-up to last year's General Election, postponed a decision on cross-media ownership. That led to accusations that ministers were trying not to offend Murdoch for fear of losing the support of his newspapers.

Only last week, the influential MPs' culture select committee recommended that all statutory rules on the ownership of newspaper, television and radio companies should be abandoned. The committee said: 'The case for particular restrictions on media, or cross-media ownership in any sector, is now outdated. We would be happy to rely on the developing competition regime and the vast amount of information and the many voices available through the internet.'

But Jowell has now said: 'We've undertaken a very extensive consultation with the industry and what we are aiming to achieve is a balance between deregulation and allowing competition as a presumption - but recognising that the media is unique. It's not like other commodities on which competition bears.'

The proposed law is expected to champion-greater competition in the media sector but retain the major constraints on cross-media ownership, in order to protect diversity. Ministers have decided that they will retain the regulations, seeing the industry as too important to leave the question of competition to the Office of Fair Trading. The Bill will also pave the way for single ownership of ITV by lifting restrictions preventing ownership of weekend and weekday licences.

The new proposals are the product of nearly two years of work by the Department of Trade and Industry and the Department of Culture, Media and Sport, and are one of the Government's most difficult pieces of legislation.

Jowell was expected to lay the Bill before the Commons this afternoon. The draft communications Bill covers a range of media issues, and will bring much of the BBC regulation under the supervision of Ofcom, the new meda watchdog. The Bill will also allow the two biggest ITV companies, Carlton and Granada, to merge.