BECTU briefing Communications Bill: clause 269 - media ownership regulations

26 November 2002

BECTU briefing on the UK Communications Bill: media ownership regulations - clause 335: Disqualification Provisions (Non EU/EEA Ownership), clause 337: Relaxation Of Licence-Holding Restrictions (Cross-Media Ownership)

Non EU/EEA ownership

1. BECTU strongly opposes the proposal, in Clause 335, to remove the bar on non-EU/EEA ownership of ITV and Channel 5.
2. We believe this could hand ownership of significant parts of British broadcasting to global, especially American, corporate interests. We believe there is no significant support for this precipitate proposal within the industry. We further believe it will be productive of no significant economic benefits while leading to a clear cultural loss. It is also likely to inflate the already massive audiovisual trade deficit between the UK and US.
3. American ownership is not synonymous with increased American investment.
• We believe the motivation for a US company to take an ownership stake in UK broadcasting would be to increase their own profitability by exploiting more of their own programme stocks in the UK market rather than investing significantly in UK original production.
• Large US-based corporations would be able to bring very significant lobbying pressures on UK regulators to lean in the direction of allowing a more international product mix rather than strong regional and original UK production. They will operate according to corporate and cultural priorities determined outside the UK.
• There is no convincing evidence whatsoever of any necessity to import US management expertise in order to ensure the future of British broadcasting.
4. There is absolutely no reciprocity in the sense of an equivalent opportunity for UK companies to take ownership stakes in US broadcasters. In the context of the current GATS negotiations, this would be seen as a huge concession by the UK. In normal trade negotiations, the US would be expected to make an equivalent concession.
5. We recognise that Joint Committee chaired by Lord Puttnam recommended that there should be no lifting of the restrictions on non-EU/EEA ownership until OFCOM has reviewed the issue and has felt able to support such a move. We acknowledge this as a further indication of the widespread unease about this proposal However, at the present time we believe the arguments are already clearly weighted against the lifting of restrictions, even without an OFCOM review.
6. We further recognise the ITC's recommendations, in its Review of Programme Supply, for OFCOM to be able to set protective investment targets for UK programmes. We remain of the view that we should avoid creating the problem in the first place and should not lift the restrictions on non EU/EEA ownership.

Cross-media ownership

7. We oppose the lifting of ownership restrictions as between national newspapers and Channel 5, as would be allowed under Clause 337. This leaves the way open for Rupert Murdoch's News International, with existing interests in both national newspapers and BSkyB, to extend its reach into terrestrial television by owning Channel 5. We believe this would represent a highly undesirable concentration of media ownership - with huge opportunities for cross-promoting the channel in newspapers and on satellite TV to the detriment of ITV (which has stronger public service obligations but no equivalent cross-promotion opportunities).
8. We further agree with the Puttnam Committee proposal that a specific plurality test should be introduced into the rules governing media mergers. We believe any merger between the Murdoch interests and Channel 5 would clearly fail such a test.