Protecting the Public Interest: Media Reform recommendations part 2

Co-ordinating Committee
18 December 2011

This is the second section of Media Reform's recommendations. The first section is on Ethics; the third is on Funding Models.

23. Strong cross-ownership rules and clear upper ceilings on the share across media markets are needed. Any supplier with a 15 per cent share in a designated media market should be subject to a public interest test in respect of any merger or acquisition in the same or another media market. A public interest test should be applied to existing market conditions as well as to any prospective change arising from merger or acquisition. The test should assess the holding against clear criteria concerning plurality of information, diversity of cultural expression, contribution to public good (democratic, social and cultural). Ownership concentration and cross-ownership above the 15 per cent threshold may be permitted subject to conditions. However, the maximum permitted holding in any of the following designated markets should be 30% (national news; regional news on all platforms and in each of the following platforms - radio, television, newspapers, online).

24. The power to initiate a public interest test should be assigned to Ofcom in line with Recommendation Rec(2000)23 of the Council of Europe. Ofcom should have concurrent powers to initiate the test rather than control resting exclusively with the Secretary of State because there may be, as the BSkyB bid so clearly revealed, a conflict of interest. Operating under new legislation Ofcom will be best placed to assess public interest considerations alongside competition issues. Ofcom can ensure the process is less susceptible to political interference while remaining properly subject to parliamentary and judicial oversight.

25. The BSkyB exception should be remedied so that the News Corp’s stake in BSkyB is reduced from 39 per cent to 15 per cent.

26. Market concentrations above the upper ceilings (15 per cent) would only be allowed where firms can demonstrate that they meet certain precise requirements and comply with conditions impose by Ofcom. The revised public interest test process would determine whether the merger or share was permissible or not. But it would also extend the power to impose remedies other than simple approval/disapproval that refer to ‘behavioural’ conditions on the conduct, performance, and governance of suppliers of media services. Such behavioural conditions would include measures concerned with protecting editorial standards and independence, the treatment of workers, and terms of supply to third parties. Requirements could also include interventions in ownership structures, for instance requiring that public trusts or co-operative ventures be established when firms would otherwise exceed market-share or cross-ownership thresholds. In addition to existing ones, public interest criteria should include:

  • 1) protection of the editorial independence of media workers
  • 2) investment in newsgathering
  • 3) the effect on the range and diversity of cultural expression.

27. In order to improve transparency, the public should have access to basic information on the ownership and management of media companies. Regulation should secure disclosure of information regarding stakeholders, corporate governance, statements of editorial policies, and interests in other media. How far this can go without endangering commercial confidence would need to be worked out, but movement towards greater financial transparency is clearly overdue.

28. Reflecting on the handling of the News Corp takeover of BSkyB, it is not enough just to consult when deals are virtually done; applying public interest to media ownership considerations requires public involvement and oversight at all times. Media ownership regulation needs effective and continuous public consultation built-in so that public interest issues can be addressed by all those affected, with Ofcom and other regulators held to account by the parliaments or assemblies concerned.

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